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| Markets buoyed by Trump trade deal ahead of US GDP - business live | Markets buoyed by Trump trade deal ahead of US GDP - business live |
| (35 minutes later) | |
| It’s a positive start in Europe, but by no means a really convincing one. Connor Campbell, financial analyst at Spreadex, said: | |
| Investors continued to greet the US-Mexico trade deal with wary positivity, the European markets just about nudging higher after the bell. | |
| The FTSE, which got that belated bounce on Tuesday as it played catch-up following bank holiday Monday, opened up a few points, a smidge above 7630. There was even less of interest in the Eurozone, with the DAX and CAC at 12550 and 5500 respectively, with investors put off from doing anything else due to concerns surrounding the Italian economy. | |
| Despite more front page worries about the cost and chaos of a ‘no deal’ Brexit, the pound managed to avoid furthering Tuesday’s losses as Wednesday got underway. Against the dollar it was unchanged at $1.287, while against the euro it actually rose 0.2%, lifting off of its recent near one year lows. | |
| There’s really not a lot to work with this Wednesday morning, beyond the various ongoing macro-tensions, leaving investors sitting on their hands until this afternoon’s US Q2 GDP reading. | |
| The positive developments on the trade front following the US-Mexico deal have helped push European markets higher at the open. But the gains are limited by worries about Italy’s economy, following recent comments that the country might breach eurozone caps on public spending. | The positive developments on the trade front following the US-Mexico deal have helped push European markets higher at the open. But the gains are limited by worries about Italy’s economy, following recent comments that the country might breach eurozone caps on public spending. |
| The FTSE 100 has opened up 0.15% while Germany’s Dax has added 0.16% and France’s Cac has climbed 0.17%. But Italy’s FTSE MIB is down 0.03%. Jasper Lawler, head of research at London Capital Group, said: | The FTSE 100 has opened up 0.15% while Germany’s Dax has added 0.16% and France’s Cac has climbed 0.17%. But Italy’s FTSE MIB is down 0.03%. Jasper Lawler, head of research at London Capital Group, said: |
| No records are expected to be broken in European share markets just yet. Some of the optimism about the deal struck between the US and Mexico has turned to concerns over Italian debt levels. Mexico reaching an amicable solution with the US, especially in the automotive industry, increases the likelihood Europe will end with a similar result. The positive industry news bodes well for recently pressured auto shares including Volkswagen and Citroen Peugeot. | No records are expected to be broken in European share markets just yet. Some of the optimism about the deal struck between the US and Mexico has turned to concerns over Italian debt levels. Mexico reaching an amicable solution with the US, especially in the automotive industry, increases the likelihood Europe will end with a similar result. The positive industry news bodes well for recently pressured auto shares including Volkswagen and Citroen Peugeot. |
| Concerns about European bank exposure in Italy is a worry, hot off the heels of similar concerns over Turkey. The comments from the deputy prime minister about Italy breaching the 3% cap on public deficits is confirmation that Italy’s new populist government is even less fiscally responsible than its predecessors. Italy’s political upset combined with its high debt load are a significant risk factor for European equities though the second half of 2018. | Concerns about European bank exposure in Italy is a worry, hot off the heels of similar concerns over Turkey. The comments from the deputy prime minister about Italy breaching the 3% cap on public deficits is confirmation that Italy’s new populist government is even less fiscally responsible than its predecessors. Italy’s political upset combined with its high debt load are a significant risk factor for European equities though the second half of 2018. |
| France’s economy grew at 0.2% quarter on quarter in the second three months of the year, in line with initial estimates. The annualised growth rate was 1.7%, as expected. | France’s economy grew at 0.2% quarter on quarter in the second three months of the year, in line with initial estimates. The annualised growth rate was 1.7%, as expected. |
| The French statistics agency INSEE said: | The French statistics agency INSEE said: |
| Imports bounced back this quarter (+1.0% after −0.4%) as did exports to a lesser extent (+0.2% after −0.4%). All in all, foreign trade balance contributed negatively to GDP growth, −0.3 points, after a neutral contribution in Q1. | Imports bounced back this quarter (+1.0% after −0.4%) as did exports to a lesser extent (+0.2% after −0.4%). All in all, foreign trade balance contributed negatively to GDP growth, −0.3 points, after a neutral contribution in Q1. |
| Here are IG’s opening calls for Europe: | Here are IG’s opening calls for Europe: |
| European Opening Calls:#FTSE 7642 +0.33%#DAX 12557 +0.23%#CAC 5501 +0.29%#MIB 20642 +0.11%#IBEX 9626 +0.21% | European Opening Calls:#FTSE 7642 +0.33%#DAX 12557 +0.23%#CAC 5501 +0.29%#MIB 20642 +0.11%#IBEX 9626 +0.21% |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Stock markets continue to be lifted by the more positive outlook for the US trade situation, following the deal between President Trump’s administration and the Mexican government to replace the North American Free Trade Agreement. There are hopes too that Canada, the other NAFTA signee, will join the new deal within the next few days. | Stock markets continue to be lifted by the more positive outlook for the US trade situation, following the deal between President Trump’s administration and the Mexican government to replace the North American Free Trade Agreement. There are hopes too that Canada, the other NAFTA signee, will join the new deal within the next few days. |
| And although the agreement does little to indicate how things might develop in the US row with China and the EU, investors are taking the optimistic view for the moment. So with US markets hitting new peaks and Asia moving ahead overnight, European markets are expected to open higher. Here is our latest story on the positive response to the trade talks: | And although the agreement does little to indicate how things might develop in the US row with China and the EU, investors are taking the optimistic view for the moment. So with US markets hitting new peaks and Asia moving ahead overnight, European markets are expected to open higher. Here is our latest story on the positive response to the trade talks: |
| The main economic event of the day is US GDP which is expected to show strong growth in the revised second quarter figures. David Madden, market analyst at CMC Markets UK, said: | The main economic event of the day is US GDP which is expected to show strong growth in the revised second quarter figures. David Madden, market analyst at CMC Markets UK, said: |
| The consensus estimate is 4% ,and keep in mind the advanced reading was 4.1%. In the first-quarter the economy grew by 2.2%. There is a growing belief that President Trump’s tax cuts are kicking in, and we could see higher levels of growth at the back end of the year in comparison with the beginning. Yesterday, the US Conference Board consumer sentiment report hit is highest level since late 2000. | The consensus estimate is 4% ,and keep in mind the advanced reading was 4.1%. In the first-quarter the economy grew by 2.2%. There is a growing belief that President Trump’s tax cuts are kicking in, and we could see higher levels of growth at the back end of the year in comparison with the beginning. Yesterday, the US Conference Board consumer sentiment report hit is highest level since late 2000. |
| French GDP figures are also due shortly, with annualised growth forecast to reach 1.7%. | French GDP figures are also due shortly, with annualised growth forecast to reach 1.7%. |
| Agenda: | Agenda: |
| 7.45 BST French GDP | 7.45 BST French GDP |
| 13.30 BST US GDP | 13.30 BST US GDP |