A brief trade war breather helps indices higher

A momentary respite in the flow of trade tariff news has given stock markets in Europe the chance to focus back on the basics: company earnings.

A momentary respite in the flow of trade tariff news has given stock markets in Europe the chance to focus back on the basics: company earnings. Most European indices are trading higher, even the FTSE, despite a mixed bag of earnings with strong results from Hargreaves Lansdown and declines in profit from Standard Life Aberdeen, car dealer Pendragon and Domino’s Pizza.

German industrial data cap euro’s upside move

The euro managed to hold its ground this morning after German trade and industrial production data for June showed an unexpected decline. German economic numbers have not been strong this week, with factory orders showing a sharp decline in June after a rise in May, particularly for the country’s key car manufacturing industry. Given that Germany’s industrial output in the last quarter rose only 0.4% this will do little to support the euro going forward in terms of economic strength in Europe; it will be more a case of the pound struggling because of Brexit that will keep the European currency afloat. The euro traded almost flat against the pound, up 0.07%, but was slightly stronger against the dollar, up 0.17%.

For the time being UK economic data is still working slightly against the pound. UK retail sales numbers showed that there has been a wider decline in consumer spending which could not be offset by the much higher food and drink spend caused by Britain’s hot spell this summer. Sterling held its ground against the greenback to trade up 0.13%.

Oil higher as US sanctions against Iran kick in

Oil prices are on a upward trajectory this morning as US sanctions against Iran have kicked in. The Middle Eastern oil producer exported almost 3 million barrels of crude oil per day in the last month and some of it is likely to keep flowing out of the country despite the US decision because India, China and many countries in Europe oppose the US ban and are likely to continue buying Iranian oil. For the time being, oil prices perked up to trade just above $74.10 for Brent crude and at $69.22 for West Texas Intermediate.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.