June 19, 2018
China's markets fall more than 2% after Trump threatens new tariffs; the rest of Asia recedes
On Tuesday, June 19, Chinese markets led the losses in Asia after the U.S. president launched a new ad in the U.S.-China trade dispute. Trump said Monday he had asked the U.S. Trade Representative to identify $200 billion worth of Chinese products that will be subject to additional 10 percent tariffs. These tariffs will come into effect 'if China does not change its practices'. China, in turn, said it would take countermeasures if the United States went ahead with the additional tariffs it had threatened.
China's markets fell after that news. Other Asian markets were mixed. The Nikkei 225 fell by 1.34 per cent and the South Korean Kospi fell by 0.79 per cent. Australian equities, however, were left out of these concerns by 0.2 per cent.
The Japanese currency is holding steady. The resumption of trade negotiations between the US and China boosted demand for the Japanese yen. The dollar fell against the Japanese yen on Tuesday after the U.S. president threatened to apply more tariffs to China.
High trade tensions between the United States and China have made investors nervous about the trade dispute between the world's two largest economies and are having an impact on the global economy.
U.S. index futures fell, with the Dow Jones Industrials below 252 points. The S&P 500's e-mini futures declined by 0.94 percent.
Foreign governments withdrew their purchases of US long-term debt as trade tensions increased around the world. Declines are relatively small so far for notes and bonds, but indicate a potentially worrying trend.
Oil prices fell in the early hours of Tuesday's Asian session, due to expectations that the OPEC producers' cartel and its main ally Russia will gradually increase production, following the retention of supplies since 2017.
Gold rose on Tuesday's Asian trading day, while the dollar fell and Asian equities fell.
European markets are expected to open Tuesday's session lower.
The FAANG+ are fighting hard on Monday
Nasdaq attempts to cut short term bearish crosses on short term averages.
The FAANG+ are fighting hard on Monday 18 June to lift the Nasdaq, but the collapse of Intel along with the damage to China related values is making it very difficult for them.
Negative session at the beginning of this week in the European market. The same session, on Monday 18 June, saw the digestion of the end of the quarterly maturity of derivatives, which took place on Friday, and the need to face a completely different market from the one that existed before the weekend.
Different because, over the weekend, China has counter-attacked the tariffs imposed by the United States. The trade war is hardening, which is gradually affecting the markets and their valuations.
The ECB reduced the growth prospects for the coming years, but they did not dare to present any strong measures, in particular with regard to trade tension.
Declines are widespread across Europe in risky assets and, little by little, some demand for assets that represent security is emerging. The price increases in public debt, silver and gold are appearing but not strongly.
Last week was the big week for central banks and this week investors will be looking forward to the same, as a meeting of central banks begins in Portugal. Any intervention, speech or comment can move the market.
Munich District Attorney's Office arrests Audi CEO Rupert Stadler
He is accused of fraud and false advertising after the search of his apartment by the police over the weekend.
The authorities accuse Stadler of not having prevented the delivery of the brand's vehicles throughout Europe since 2015 with devices that reduced or camouflaged pollutant emissions in a new Dieselgate scandal.
The prosecutor's office estimates that 60,000 units contained these fraudulent devices.
Volksawagen's titles increase losses after this news broke and fall sharply into the DAX.
OPEC Economic Council meets in Vienna with representatives of oil-producing countries
They are beginning to prepare for Friday's summit, at which they are expected to announce an increase in production.
The increase would be 600,000 barrels per day, less than the amount being considered, which is causing a significant rebound in oil prices.
Goldan Sachs predicts in a report that OPEC and Russia will increase production this Friday by one million barrels per day.
However, the fall in production of other participants such as Iran or Venezuela, following the application of US sanctions, will leave that increase only at 450,000 barrels per day.
In addition, the bank's analysts believe that there is still some uncertainty on the demand side. They see a global growth for this year of 1.75 million barrels per day.
It anticipates a possible tightening of the market, mainly due to the pressure of increased production in the United States.
They maintain that the Brent will reach $82.5 a barrel.
Within the United States there is a decrease of three installations, according to Baker & Huges, which means that the figure is lower than last year.
Automotive and parts continue to fear the trade war
The Euro remains weak and the automotive and parts supersector is one of the worst.
We can see the fear of a trade war that could do a lot of damage, not only on the American side but also because of the possibility that Europe will take advantage of the situation to mess with China and that China will respond.
Merkel talks about Germany's migration policy
She says that both the CDU and the CSU have the common goal of improving the organisation of immigration to Germany and significantly reducing the number of people entering the country.
Both parties also support the plan to present a master plan on immigration. She says they will not let those who have already registered in other countries into the country. She acknowledges that there has been a very serious debate but that they want to act together with the CSU.
The result of the negotiations has been a strong and clear mandate from both parties and she believes that unjustifiably pushing people back to the borders of Germany could lead to undesirable domino effects.
Merkel believes that the European Union's asylum policy is not only about what Germany is asking for, but also about what other countries find important.
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