German political strife and Canada tariffs hit equities

As the weeks gets under way stock markets across Europe are heading lower as Germany’s coalition government is hanging in a precarious balance over bitter frictions over immigration issues. 

The FTSE 100 started the day down 0.7% Italy’s MIB index opened down 1.3% and the CAC 1.2% lower after Germany’s interior minister offered his resignation arguing that a EU immigration deal reached late last week would not stem the influx of immigrants into Germany, as it was presented domestically. 

The move threatens the position of German Chancellor Angela Merkel and her brittle government coalition.

Canada imposes tariffs on US goods

The friction in Europe’s largest economy is intensifying as the markets are already getting increasingly worried about the fallout of the US trade dispute with America’s major trade partners. 

From Sunday Canada started imposing trade tariffs on $12.6 billion worth of American goods including iron, orange juice and whiskey in response to the US tariffs on Canadian steel and aluminium which were introduced on 22 June. 

America’s northern neighbour joins the ranks of the EU and Mexico, both of which have also hit back against US import tariffs with tariffs of their own, with Mexico penalising imports of US pork, steel, cheese and apples and the EU levying duties on whiskey, motorcycles and orange juice. 

Amid the trade whirlwind investors are now increasingly looking for stocks that will be the least effected by the tariff tit-for-tat although it is difficult to say what these stocks may be given that Donald Trump has already said he intends to respond with another set of trade tariffs in response to his trade partners’ reaction.

Tesco link up with Carrefour

Only weeks after retailer Sainsbury's announced its £10bn merger with low cost chain Asda Tesco singed a deal for a long-term, strategic alliance with France’s supermarket chain Carrefour. 

Tesco said that the agreement, which will cover relationships with global suppliers and the joint purchasing of own brand products, would lower the companies’ costs and make them both more competitive in their respective markets. The market was not particularly convinced by this decision marking Tesco shares down 0.43%.