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Financial Markets Summary 15 June 2018

European cash equity markets declined in response with the UK’s FTSE 100 the worst performing regional index as miners slumped (FTSE -1.3%, DAX-0.5 %, CAC -0.1%, FTSEMIB -0.9%). US bourses fell at the open and while they have moved off their worst levels, remain lower at the closing bell (DJIA -0.4%, S&P -0.1%, NASDAQ -0.2%).
(Reports by Sigma Squawk)

European Closing Report

The prospect of a global trade war received another unwelcome boost this afternoon after Washington unveiled another round import tariffs on Chinese goods. Within the hour, China stated that they would respond immediately with measures of the same scale. 

European cash equity markets declined in response with the UK’s FTSE 100 the worst performing regional index as miners slumped (FTSE -1.3%, DAX-0.5 %, CAC -0.1%, FTSEMIB -0.9%). We also saw a lower open on Wall Street where energy stocks are leading declines amid a sharp drop in oil prices this afternoon – US crude futures are currently trading down just over three-percent. 

Elsewhere, US government bond yields have nudged lower and this has kept the Dollar Index in the red although losses have been contained by some stronger-than-expected macro data in the form of Empire manufacturing and Michigan Sentiment. Industrial production was soft however, as were Canadian manufacturing sales. 

Elsewhere in FX, the Euro has seen some minor upside after yesterday’s ECB inspired rout. Gold has also moved to the downside in recent trade with losses of almost two-percent at the lows. We did also hear from New York Fed President Dudley who said rates will need to rise a little above the neutral. Still to come today, the US Baker Hughes rig count at 18:00 BST

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US Closing Report

The prospect of a global trade war received another unwelcome boost today after both Washington and Bejing announced import tariffs on the others goods. US bourses fell at the open and while they have moved off their worst levels, remain lower at the closing bell (DJIA -0.4%, S&P -0.1%, NASDAQ -0.2%). 

Energy stocks have shown notable underperformance amid a slump in oil prices – US crude futures settled at $65.06 (-$1.80). In the bond markets, US yields have nudged lower with the 10-year down a basis point to 2.92%. 

The Dollar Index is also nursing a minor decline. We did hear from Dallas Fed President Kaplan who said he favours three rate increases this year although is open to four.

Risk warning!                                                                                                                                                        ---------------------------------------------------
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