Asia
With the collapse of the US-North Korea summit talks dominating global news headlines, it was inevitable that markets in Asian Pacific failed to make progress at the end of a choppy week.
Nevertheless, global markets failed to panic, the dollar remained steady and 10-year Treasuty yields remained subdued.
A weaker close on Wall Street also held back gains. Japan’s equity market was the exception, helped by a strengthening dollar against the yen. Nevertheless, inflation remains a concern in Japan, with rises in the cost of living in Tokyo coming in softer than forecasts.
Prime minister Shinzo Abe is appearing at a summit of world leaders in St Petersburg, Russia.
Europe
Another reading of UK GDP show that the economy grew just 0.1% in the first quarter, and 1.2% on the same quarter of 2017.
The British pound softened further after Bank of England Governor warned that a “disorderly” Brexit would spur the central bank to cut interest rates. The UK economy has yet to be weaned off loose monetary conditions more than a decade after the financial crisis. With the US already on the path to monetary tightening, fears os persistent low interest rates in the UK is bound to weigh on the pound-dollar exchange rate.
Earlier this week, Carney said that the UK consumer has already lost £900 each, or £40 billion since the Brexit vote.
On the FTSE 100, shares in B&Q owner Kingfisher (KGF) were the biggest risers despite a gloomy first-quarter update yesterday.
Shares in dividend heavyweight SSE (SSE) were a touch higher in morning trading despite the utility posting a fall in full-year profits. The company did raise its 2017 dividend, however, and gave some guidance over the next five years’ payouts.
The spread between Italian and German bond yields widened on Friday, a sign that markets are starting to take seriously the threat of a genuine political crisis in the country. That fear was not reflected in the stock market today, however.
North America
US stock market futures are taking heart from the relatively muted diplomatic response from North Korea – so far – after the United States cancelled planned talks next month between the two countries.
The US economy will be in focus again with Federal Reserve Chair Jerome Powell speaking on financial stability and transparency, and April’s durable goods orders in view.
Stock markets are closed on Monday for Memorial Day.
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