Global Market Report - September 7

European stock markets were weaker ahead of the monthly US jobs report, while the United States is expected to impose $200 billion on China today

Morningstar 10/09/2561

Global Market Report

Asia

The Hong Kong stock market paused for breath after a turbulent week which saw the Hang Seng drop below 27,000 points. The index is now a long way off the 33,000 points level hit earlier in the year, dragged down by trade fears, the emerging market crisis and by the weaker performance of mainland China’s stock markets, particularly the Shanghai Composite Index.

The Shanghai Index crept above 2,700 points, but the level looks like a pause after turbulent few months for the index. The US is expected to impose another $200 billion in tariffs on China goods, and Chinese Government is expected to respond in kind.

Japan’s Nikkei 225 dropped another 180 points to 22,307 despite further weakness in the Japanese yen against the dollar.

Europe

British Airways customers are the latest victims of security breach. As a result, shares in parent company IAG (IAG) were the biggest fallers on the FTSE 100 this morning as BA admitted to a “sophisticated” data breach affecting nearly 400,000 customers.

The FTSE 100 tracked European markets lower, losing around 16 points to just above 7,300 points. In the Eurozone, Paris’s CAC 40 was the rare bright spot among generally weaker indices. Eurozone economic growth for the second quarter was confirmed at 2.1%, against an earlier reading of 2.2%.

Mark Carney’s decision to stay on as Bank of England Governor to help smooth Brexit process is the backdrop to next week’s Monetary Policy Committee. Interest rates are expected to remain on hold after last month’s rise to 0.75%. There is a chance that the Bank will discuss what the next steps are for quantitative easing, which currently stands at £435 billion. The European Central Bank, which is still a long way off raising interest rates, is planning to phase out its bond purchase programme by 2019.

North America

Today’s monthly non-farm payroll numbers are expected to show that the US economy added just shy of 200,000 jobs in August, up from just over 150,000 in July. Last month’s number was significantly below estimates, so there is the prospect of a surprise for traders. This will be the last monthly jobs data to be viewed by the Federal Reserve, which is expected to raise interest rates by a quarter point in September. There is no meeting in October so there are just two meetings after next week’s, in November and December.

 

 

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