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EUROPE-STOCKS-MARKETS
Global stocks rise as Trump punctures pound
LONDON, July 14, 2018 (BSS/AFP) – Global stock markets rose on Friday with
investors mildly hopeful that China and the US can still settle their war
over tariffs.
On currency markets, the pound slumped after US President Donald Trump
attacked UK Prime Minister Theresa May’s Brexit strategy, but recovered after
he seemed to backtrack later in the day.
Equities have had a rollercoaster week, with strong US jobs figures
providing support before Trump’s threatened tariffs on another $200 billion
of Chinese imports causing a large sell-off.
“Equities are steadily gaining,” noted Chris Beauchamp, chief market
analyst at traders IG. “Of course, the path higher has been made much easier
by the absence of any trade war comments, tweets or observations.”
– Can they work it out? –
Beijing’s measured response to Trump’s tariffs threat and indications from
both sides that they are willing to talk has instilled trading floors with a
little optimism heading into the weekend.
“Trade war concerns was a key talking point again and a major concern
amongst economists, politicians and central bankers. However, market
participants have on the whole been evidently less concerned about it all,”
said Fawad Razaqzada at Forex.com.
US Treasury Secretary Steven Mnuchin on Thursday told lawmakers the White
House was “available” for discussions with China.
That came after China’s Vice Minister of Commerce Wang Shouwen said the
economic superpowers “should sit down and try to find a solution to this
trade problem”.
But in a development Friday that could unsettle hopes of progress, data
showed that China’s trade surplus with the United States hit a record last
month.
The imbalance is at the heart of Trump’s anger at what he describes as
Beijing’s unfair trade practices that are hurting American companies and
destroying jobs.
– ‘Dumped and trumped’ –
On currency markets Friday, sterling was hammered early in the session by
fresh concerns about May’s political future.
In an interview released Friday to coincide with Trump’s visit to Britain,
the president said the British prime minister’s plans for close future ties
with the EU would “probably kill” her hopes for a trade deal with the United
States.
Lukman Otunuga, Research Analyst at FXTM, said the pound had been “dumped
and trumped” at the end of what was already “a terrible trading week for the
British pound thanks to political instability at home and Brexit-related
uncertainty”.
Trump later seemed to want to take the edge off his earlier remarks, saying
“whatever you do is okay with us, just make sure we can trade together,
that’s all that matters”.
That helped sterling to recover to trade little changed on the day, and in
turn weighed on London stocks, which are often boosted by a soft British
currency.
However, the pound now stands more than seven percent lower against the
dollar than three months ago, and about two percent down against the euro
over the same period.
BSS/AFP/HR/1010