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MARKETS-WORLD WRAP (UPDATE)
Stock markets downbeat after Trump Brexit, China comments
LONDON, Nov 27, 2018 (BSS/AFP) – Stock markets largely headed south once more
Tuesday with traders on edge after US President Donald Trump warned he would
ramp up his trade war with China should he fail to reach a deal with Chinese
leader Xi Jinping at upcoming talks.
The pound meanwhile suffered after Trump warned Prime Minister Theresa
May’s EU divorce agreement could hamper the chances of a trade deal between
Washington and London.
Oil prices steadied after recent extreme volatility, while bitcoin
stabilised around $3,650.
Monday witnessed a global markets rally, fuelled by rising oil prices,
Italy’s softer tone in its budget standoff with Brussels and May’s Brexit
agreement with the European Union.
“A strong, sharp move higher in global equities faded almost as quickly as
it occurred… in what is a clear sign of the growing sensitivity to this
(trade) matter heading into the G20 meetings later this week in Buenos
Aires,” noted David Cheetham, chief market analyst at traders XTB.
“Comments from US President Trump… that downplayed the chances of a US-UK
trade deal after Brexit have no doubt not helped the pound’s plight,”
Cheetham said, adding that further pressure was coming from May’s struggle to
have the Brexit deal approved by the UK parliament.
Elsewhere, traders are looking to see if China and the US will be able to
work out an agreement that brings them back from the brink of a tariffs row
that threatens to dent global growth.
In a paper published Tuesday, European Central Bank researchers said that
while rising protectionism’s impact on stocks and bonds has been “contained”,
a global trade war risks “strong financial market corrections”.
While the Trump-Xi meeting is the main event this week, investors are also
keeping an eye on speeches from top Federal Reserve officials including boss
Jerome Powell, which could signal a softer pace of interest rate hikes.
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MARKETS-WORLD WRAP (UPDATE) 2 LAST
Rising US borrowing costs — fuelled by surging US growth — have been a
major cause of concern for investors but recent comments from the central
banker appear to show a more dovish outlook for 2019 as the global economy
slows.
As business got under way in Europe the pound dropped against the dollar
and euro following Trump’s comments about May’s draft Brexit deal.
“Sounds like a great deal for the EU,” he said at the White House Monday.
“You know, right now, if you look at the deal, they may not be able to trade
with us, and that wouldn’t be a good thing,” he added.
On oil markets, both main contracts remained under pressure despite
Monday’s sharp rebound, with market-watchers waiting for next month’s
gathering of OPEC and non-OPEC members hoping they will announce a cut in
output.
The commodity has been hammered since early October by a series of issues
including the uncertain global outlook, the trade war, rising supplies,
slowing demand and weakness in China.
As trade tensions begin to bite on the global economy, analysts are
predicting slower growth into next year, meaning there would be less demand
for oil.
“It has been our long-held view that slower global economic activity would
be a factor weighing on oil demand in 2019 and that the market would move
into surplus,” London-based research consultancy Capital Economics said.
– Key figures around 1145 GMT –
London – FTSE 100: DOWN 0.3 percent at 7,015.59 points
Frankfurt – DAX 30: DOWN 0.3 percent at 11,323.25
Paris – CAC 40: DOWN 0.3 percent at 4,981.59
Milan – FTSE MIB: DOWN 0.2 percent at 19,197.09
EURO STOXX 50: DOWN 0.2 percent at 3,167.32
Tokyo – Nikkei 225: UP 0.6 percent at 21,952.40 (close)
Hong Kong – Hang Seng: DOWN 0.2 percent at 26,331.96 (close)
Shanghai – Composite: FLAT at 2,574.68 (close)
New York – Dow Jones: UP 1.5 percent at 24,640.24 (close)
Pound/dollar: DOWN at $1.2758 from $1.2806 at 2130 GMT
Euro/pound: UP at 88.70 pence from 88.41 pence
Euro/dollar: DOWN at $1.1320 from $1.1326
Dollar/yen: FLAT at 113.58 yen
Oil – Brent Crude: UP 21 cents at $60.69 per barrel
Oil – West Texas Intermediate: UP one cent at $51.64
BSS/AFP/SR/1940 HRS