Markets cautious as traders keep close tabs on global developments
Japanese Prime Minister Shinzo Abe (middle), European Commission President Jean-Claude Juncker (left) and European Council President Donald Tusk smile after their joint press conference at Abe’s official residence in Tokyo yesterday. PHOTO | AFP
What you need to know:
Around 1045 GMT, European stock markets were fairly stable, as were oil prices and the dollar.
Londres, United Kingdom. Financial markets steadied Tuesday as traders tracked the latest developments surrounding global trade, including a significant deal signed between the EU and Japan.
Around 1045 GMT, European stock markets were fairly stable, as were oil prices and the dollar.
Stock markets however mostly slid across Asia, led by share price falls for the energy sector one day after oil prices plunged on excess supply concerns.
Brent crude hit another three-month low Tuesday, at $71.35 per barrel, before recovering.
“Investors have... remained focused on the possibility of a trade war and the upcoming earnings season,” said Craig Erlam, senior market analyst at Oanda trading group.
The EU and Japan signed a sweeping free trade deal Tuesday that officials called a “clear message” against protectionism, as Washington imposes controversial tariffs and threatens a trade war.
The huge deal was signed as US President Donald Trump unsettles allies and provokes rivals with his aggressive “America First” trade policy.
Both the EU and Japan have been hit with new US tariffs despite their longstanding alliances with Washington.
Fears about a China-US trade war meanwhile continue to nag investors, with both sides filing counter-complaints at the World Trade Organization after recently imposing and threatening further tariffs on billions of dollars worth of goods.
On Monday, the International Monetary Fund warned about the effects of a stand-off between the world’s two economic superpowers.
Markets’ attention is also on the start of the corporate earnings season, with hopes that strong results will deflect from the trade war, while Federal Reserve chief Jerome Powell is to give two days of congressional testimony from Tuesday.
“Today’s start for European equities has been relatively mixed, as investors look ahead to the latest comments from... Powell,” said Michael Hewson, chief market analyst at CMC Markets UK.
