Asia
Markets in the region have struggled in recent months due to the threat of trade wars but on the day when the first official shots were fired, shares in China, Hong Kong, Japan and South Korea reacted with calm. There was some speculation that China would “get its retaliation in first” by taking advantage of the time difference to impose tariffs before the United States did. The US got their first in the end, with $34 billion of tariffs kicking in at midnight on Thursday.
For now, investors are holding on to the idea that the threats of $500 billion in tariffs by President Trump may not materialise. China’s Shanghai Composite Index, the focus of investors’ anxiety in recent weeks, notched up a 0.5% gain day on day to close at 2,747 points. This level is 100 points lower than at the start of the week and 400 points down on a month ago.
Japan’s Nikkei and Topix indices were some of the best performing in the region on Friday as the country’s car and technology stocks performed well – helped no doubt by the broader global rise in car industry shares after the apparent compromise between the US and the European Union.
Europe
In the UK there is plenty of distracting noise from the political arena at the end of the week, not least the “make or break” meeting from the UK Government’s Brexit meeting. In a week of dire warnings from industrial giants such as Airbus, UK plc is hoping that some detail will emerge. The Bank of England Governor has boosted the pound this week by firming up the prospect of an August interest rate rise after a recent strong run of data. This should provide a drag on the FTSE 100, which look set to end an uneventful week just below 7,600 points. ITV (ITV) was the biggest riser today as the channel continues to enjoy higher audience figures during the World Cup.
Eurozone exchanges were modestly higher amid continuing firmness of the single currency against the dollar.
North America
US job numbers should provide some much-needed refocusing on US economic fundamentals amid the trade war rhetoric. The economy is expected to have added 190,000 jobs in June, lower than the 218,000 new jobs in May. The unemployment rate is forecast to hold at 3.8%.
Canada’s employment numbers are due for release at the same time – its economy could have added 20,000 jobs in June, leaving the unemployment rate at 5.8%.
Next Friday kicks off earnings season with results from heavyweights Citigroup (C), JP Morgan Chase (JPM) and Wells Fargo (WFC).
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