European shares give up gains and move lower

Major indices end the session down

The European major stock indices have given up their gains and moved lower.
The provisional closes are showing:
  • German DAX, -0.6%
  • France’s CAC, -0.6%
  • UK’s FTSE, -0.9%
  • Spains Ibex, -1.7%
  • Italy’s FTSE MIB, -1.11%
  • Portugal’s PSI 20, -0.63%
In the European debt market, the benchmark 10 year yields are also ending the session down on the day.
Major indices end the session down

Huawei founder expects no relief from US sanctions

Huawei founder, Ren Zhengfei, spoke to the Associated Press

Huawei

He also adds that he doesn’t want relief from US sanctions if it would require China to make concessions in a tariffs war, even if that means his daughter – who is under house arrest in Canada – faces a more prolonged legal battle.

With regards to yesterday’s announcement by the US on adding more of Huawei’s subsidiaries to the entity list, he says that:

“Whether the entity list is extended or not, that will not have a substantial impact on Huawei’s business. We can do well without relying on American companies.”

If there’s any takeaway from the message here is that China isn’t going to let up on fighting back against the US even if the sanctions and tariffs continue.
It goes without saying that the next plausible form of retaliation by China would be to limit US business opportunities in the country.
Anyway, the full interview above can be found here.

Eurostoxx futures +0.1% in early European trading

Flattish sentiment observed in early trades

  • German DAX futures +0.1%
  • French CAC 40 futures +0.1%
  • UK FTSE futures +0.1%
  • Spanish IBEX futures flat
This largely mirrors sentiment seen in US futures, with E-minis up by around 0.1% to 0.2% currently as we begin the session. That said, Treasury yields are a little softer on the day and that’s weighing a little on yen pairs and the dollar so far.
Look towards the bond market again in the coming hours for more clues on where markets will settle later in the day. However, with little fresh developments on the trade front ahead of Jackson Hole, I reckon we may see some choppy action in the mean time.

Nikkei 225 closes higher by 0.55% at 20,677.22

Asian equities mildly higher after a better performance by Wall St overnight

Nikkei 20-08

Japanese stocks are among the better performers amid more flat risk sentiment on the day. Chinese equities are not really roaring despite talk of more policy support with the Shanghai Composite nearly unchanged on the session currently.

Looking ahead, European stocks should mirror sentiment seen in US futures – flat levels – so expect the focus to stay on the bond market if anything else. Treasury yields are holding mildly lower and that is keeping USD/JPY closer to 106.50 at the moment.

US State dept: Effort to assist Iranian tanker could be viewed as support to terrorist organization

Might be some oil impact from this:

A US State department official says any effort to assist Iranian tanker could be viewed as material support to a US-designated foreign terrorist organization

In reference to

  • US has conveyed its strong position to the Greek government about Iranian tanker it says is transporting illicit oil to Syria

Risk that Fed Chair Powell could disappoint markets this week at Jackson Hole.

That’s the view from TD with attention turning to the KC Federal Reserve symposium

  • We see risks the Fed Chair could disappoint markets looking for a green light on an extended easing campaign. 
  • Rates may take the brunt of the hit, but we doubt the USD will be able to shrug off any repricing in policy expectations – even if these ultimately prove short-lived.