Markets are reservedly jubilant this morning after China’s Vice PM Liu He said the US-China trade war escalation was against global interests and US Pres Trump concurred, saying “I think they want to do something.” The odd man out – the Hang Seng – closed down a half percent as protests escalate in Hong Kong and local tycoons begin moving their assets and homes abroad.
European indices traded in red in premarket trading this morning as the G7 conference in France ends without a joint communique but “some consensus” on global issues, based on their individual declarations. Equities had tempered their plunge yesterday, closing just above the zero mark, and the Euro lost 40 pips as Germany’s GDP this morning contracts 0.1% in Q2 on weakening exports – the 2nd negative result in less than a year.
Yesterday, the IFO’s sentiment markers for Germany also came in red, falling 1-2 points respectively. Ironically, the French economy seems to be improving as both consumer and business sentiment markers this morning exceeded expectations for August. The pound is showing some optimism as negotiators head to Brussels to discuss alternatives to Britain’s EU withdrawal agreement.
US indices regained just over a percent yesterday, the dollar index adding 40 cents as economic data came in satisfactory. July’s durable goods orders expanded by 2.1% and the Dallas Fed’s manufacturing business index rose from minus 6.3 points in July to a positive 2.7 in August.
Oil traded $2 higher on the barrel yesterday on hopes for a Chinese breakthrough. Overnight, the commodity gave back half its gains, as Teheran hardened its stance regarding talks with the US on sanctions relief. Immediately after Trump responded to overtures made at the G7 conference, Iran’s president said there would be no talks before all sanctions are lifted. Bitcoin trading continues trending in a $500 width range above $10k as its weekly MACD histogram presents a bearish crossover.
Johnson & Johnson shares are up 2% after being fined a mere ½ a billion dollars for their part in about 400,000 opioid-related deaths in the US between 1999 and 2017. The original demand was for a $17bn fine, but the company has said it would appeal the decision.
OxyContin, Teva, Endo and Allergan have agreed to pay a total of 370 million dollars in settlements to stay out of court. Trials in Ohio are set to begin, and if J&J’s fine is extrapolated to the rest of the US, accumulative fines could reach $36 bn.
|08:30 AM GMT – UK||BBA Mortgage Approvals (Jul). BRC Shop Price Index|
|(Jul) at 23:00|
|12:00 PM GMT – EU||BoE’s Monetary Policy Committee member Silvana Tenreyro , and ECB Vice Pres. Luis De Guindos speeches|
|12:55 PM GMT – US||Redbook Index (Aug 23). S&P/Case-Shiller Home Price Indices (Jun) at 13:00. Consumer Confidence and Richmond Fed Manufacturing Index (Aug) at 14:00.|
|20:30 PM GMT – OIL||API Weekly Crude Oil Stock (Aug 23)|
|01:30 AM GMT (+1) – Australia||Construction Work Done (Q2)|
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