Shares fall as trade fears intensify
The European shares are closing lower on the day, and near session lows.
The provisional closes are showing:
- German DAX, -0.9%
- France’s CAC, -1.0%
- UK’s FTSE, -0.3%
- Spains Ibex, -0.6%
- Italy’s FTSE MIB, -1.65%
- Portugal’s PSI 20, -1.33%
For the week, the major indices are still mostly higher:
- German DAX, +0.4%
- France’s CAC, +0.68%
- UK’s FTSE, -0.1%
- Spains Ibex, unchanged
- Italy’s FTSE MIB, +1.0%
In other markets as London/European traders look to exit
- spot gold is up $28.50 or 1.91% at $1526.80
- WTI crude oil futures are down $1.70 or -3.07% at $53.65
In the US stock market prices are sharply lower:
- S&P index -50 points or -1.71% at 2873
- NASDAQ index down -160 points or -2.0% at 7832
- Dow industrial average -428 points or -1.63% at 25826
In the US debt market yields are sharply lower:
European benchmark 10 year yields are also mostly lower (but not as low as US yields).
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.
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.
Asian equities mildly higher after a better performance by Wall St overnight
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.
The more upbeat tone extends to Europe in early trades
- German DAX futures +0.6%
- French CAC 40 futures +0.4%
- UK FTSE futures +0.5%
This largely reflects the mood seen in Asian stocks and US equity futures, which are roughly up 0.6% as we begin the session.
The franc is a tad weaker as such but so far there hasn’t been much response among other major currencies – notably the yen – despite higher bond/Treasury yields as well. USD/JPY holds flat at 106.38 currently, little changed over the past few hours.
Looking ahead, I reckon we’ll have to see if the positive risk mood here can last the course or extend more. Otherwise, trading should be rather choppy and a bit disinterested as the ebb and flow continues to dictate market sentiment for now.
Asian equities lifted by the better risk sentiment
For Japanese stocks, the trade and Tankan reports take some shine off the more positive day but risk sentiment in markets is still pointing towards being more optimistic so far.
Other Asian equities are faring better with the Hang Seng up by 2.1% while the Shanghai Composite is up by 1.8%. Sentiment there is also helped by more policy support from Chinatowards small and medium business owners.
European stocks are also set to open more firm amid higher bond yields so that sets the tone as we begin the session, though currencies are still little changed for the most part.