European markets higher on acquisition and tender news

The focus on European markets shifted this morning to major acquisitions, share buy backs from Swiss drug maker Novartis and in the case of BAE Systems, large tender news, for the moment leaving behind concerns over global trade disputes which have weighed them down over the past weeks. 

The FTSE 100 traded up 1% while the DAX and the CAC were up almost 1.3%, further helped by a boost in the euro.

Stock markets in Asia started the day close to a nine-month low but with prices this weak some bargain hunting triggered a rally and they closed higher in Tokyo, Shanghai and Hong Kong.

Brexit fears and trade concerns stem consumer confidence

Brexit concerns and fears of a fully-fledged global trade war are taking their toll on consumer sentiment in the UK and domestic consumers and businesses are becoming increasingly more pessimistic about the prospects for the UK economy. 

A survey by market researchers GfK showed an unexpected decline in June to -9 from -7 the month before, whereas it was widely expected that this indicator would hold steady.

A business confidence indicator compiled by Lloyds Bank showed a similar unexpected decline in June to the lowest level this year. The two items of data will contribute to the Bank of England’s next set of deliberations on interest rates and may nudge the Bank away from a planned interest rate hike in August.

Euro boosted by late night EU deal

The common currency was on the rise Friday morning after late night discussions between EU heads yielded a broad agreement on some of the key divisive issues including immigration and refugees. 

The deal which now means that Italy will carry a heavier load in terms of refugees has taken pressure off German Chancellor Angela Merkel and her coalition which was on the verge of imploding over Germany’s role in the refugee crisis. The euro picked up against the pound to trade 0.27% higher and rallied even stronger against the dollar to trade up 0.55%.