Global Market Report - September 14

Asia

The possible renewal of trade talks between the US and China that gave a brief boost to Asia markets yesterday but this outbreak of optimism proved shortlived. Both sides resumed their war of words at the end of the week, with President Trump on the one side saying the US doesn’t need a deal and China on the other saying it won’t “surrender” to America’s demands. China’s Shanghai and Shenzhen indices drifted lower on Friday after Thursday’s brief recovery on August data that showed more evidence of economic weakness.  Hong Kong’s Hang Seng managed to consolidate above the 27,000 points level with a 1% rise day on day, while Japan also pushed back above a key technical level, in the Nikkei 225’s case 23,000 points. So Asia’s markets are still being overshadowed by macro events – trade war fears, China’s possible slowdown – but are still attempting some sort of recovery in tune with reasonably positive US and European markets.

Europe

The FTSE 100 managed a minor gain in morning trading on last night’s close as European shares in general rose. SSE (SSE) was one of the earliest fallers after this week’s profit warning continued to send aftershocks through the utilities sector.

Mark Carney’s dire warning over UK house prices in the event of a no-deal Brexit set Twitter alight but failed to weaken the pound. Next week’s inflation figures will focus the Bank’s minds on more pressing matters, as the rise in the cost of living is still above target. There’s no Bank of England meeting in October so there are only two possible occasions to raise interest rates this year. But while Brexit negotiations reach a crunch point in the next six months, the consensus forecast is for the Bank to hold rates until next spring at least. The Monetary Policy Committee voted unanimously to hold interest rates at 0.75% yesterday.