European gauges were pulled down by declining profits from big financial names including Nordea, Munich Re and Raiffeisenbank, where profit declines were into double digits, although Sweden’s Handelsbanken (LON:0R7R) surprised on the upside with a forecast-beating profit rise.
The Sino-US trade spat is slowly working its way through the system and is eroding trade not only with the US but also European countries. Germany reported Wednesday that manufacturing orders dropped again in December, particularly from outside the Eurozone, while Daimler, which sells most of its Mercedes-Benz cars to China, showed a decline in profits.
The markets across Asia remain quieter than usual with Chinese markets closed for the rest of the week for the Lunar New Year.
State of the Union address
President Trump’s State of the Union address was more conciliatory than expected, as the administration is now trying to reach some sort of middle ground with the now Democrat-led Congress, but with the absence of any major economic statements US markets slumped slightly after the speech. US stock futures are still trending down this morning signaling a lower start on Wall Street later in the day.
Housebuilder surprises with positive results
In sharp contrast with the news flow over the last few months over the Brexit-induced state of the UK housing market, house builder Barratt Developments (LON:BDEV) reported a 19% increase in pretax profits and said that the housing market remains strong.
On the Brexit front, the Prime Minister is due to meet with Northern Ireland’s political parties in a move designed to ensure the DUP’s support for her proposal. But despite her best intentions she is likely to run into resistance from Brussels, were politicians are repeatedly saying they are not keen to renegotiate the current proposal.
As the likelihood of a hard Brexit increases by the day, the finger pointing blame game has started, which will do little to help markets, particularly currencies. Still, the pound is holding its ground in early trade and has gained against the dollar and the euro.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.
Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions."