Mixed message
Some positive noises from the US about progress in the US-China trade talks pushed Asian markets higher overnight but the optimism affected only some European markets. Britain’s unresolved Brexit path continues to hang over London share trading while German markets struggle with signals that the domestic economy is slowing down.
So far, US futures point to a higher open as the markets there build on the upward momentum seen late Friday.
Pound gets a breather
The weekend has brought some relief for the embattled pound, mostly thanks to the break in news flow from Westminster, and the currency notched up against the dollar to $1.2921. However, another week, and another set of uncertainties on the Brexit front will guarantee some degree of volatility.
Fresh talk of a number of anti-Brexit Labour MPs resigning in order to push Jeremy Corbyn towards a different solution from what is now on the table could be helpful to the pound as the market views a no-deal Brexit as the worst potential outcome for the UK economy.
The euro is nearly flat against sterling, with trading being dominated by comments from French President Macron in favour of the EU accommodating PM Theresa May’s requests for changes on the Irish backstop issue.
Car makers and US tariffs
The US Commerce Department pulled a major move over the weekend that could hit hard the already beleaguered German and Japanese car makers who are already in a tight spot because of slowing demand from China and, to a lesser extent, from other countries. The DoC submitted a report on the effects of these tariffs on US car markets to President Trump who has long argued in favour of protecting US car producers.
Some of the proposed tariffs are as high as 25% which would effectively cripple foreign car imports into the US. Daimler (DE:DAIGn), Renault (PA:RENA), Audi (DE:NSUG) and to a lesser extent BMW’s share prices (DE:BMWG) gave ground this morning, trading down to as much as 1.1% lower.
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."