A brief trade war breather helps indices higher
Fiona Cincotta August 7, 2018 9:34 AM
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.
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