LONDON: Europe’s major equity markets dipped Monday with sentiment subdued, as investors took stock after the recent fast-paced news flow.
Official data Friday showed US unemployment fell to its lowest level in nearly 17 years in October.
The update came after the Federal Reserve delivered a punchy assessment of “strong” US economic growth while keeping its key policy interest rate unchanged.
Also last week, the Bank of England (BoE) hiked its key interest rate for the first time in more than a decade to combat Brexit-fuelled high inflation.
“After a bombardment of news… investors may struggle to scrape together anything of note in the first full week of November,” said Spreadex analyst Connor Campbell.
“Befitting a tame economic calendar, the markets have gotten off to an achingly slow start.”
IG analyst Joshua Mahony agreed that markets were pausing from a “busy” round of central bank and company announcements.
“Markets are on a comedown, following what as was incredibly busy week from a political, economic and corporate standpoint,” he said.
Mahony added that the focus “will likely shift onto the US from here on in, with negotiations over a wide-reaching tax reform programme expected to grab the headlines”.
US President Donald Trump has proposed slashing the country’s corporate rates and maintaining the top tax bracket for millionaires.
– Trump lashes out –
Asian stocks were largely flat Monday, as Trump lashed out at “unfair” trade practices and China’s central bank chief condemned excessive debt.
Investors shrugged off rebounding commodity prices and another record-breaking Wall Street session Friday on strong Apple earnings.
All three US indices ended at record highs, with the Nasdaq gaining the most and the Dow notching its 56th record high of 2017 as third-quarter earnings season entered the home stretch.
Trump began his marathon Asia tour in earnest Monday by criticising trade relationships with Tokyo and Beijing, saying that close ally Japan had been “winning” for decades at the expense of the United States, and calling commerce with China “very unfair”.
In particular, Trump’s criticism of a “massive trade deficit” that “has to come down” prompted concern among Asian exporters.
Markets were already nervous over the prospect of an escalation in rhetoric — or even further missile and nuclear tests — from North Korea during the US president’s Asian tour.
Elsewhere oil futures continued to rally with Brent crude hitting $62.90 per barrel — the highest level since July 2015 — before slipping back to around $62.50.
Prices have risen sharply due to growing global demand and OPEC-led supply curbs, with traders now closely monitoring the impact of a sweeping crackdown in oil-rich Saudi Arabia, which included the arrest of billionaire investor Prince Al-Waleed bin Talal.
Source: Brecorder.com
