Stock market: On stage – a trade conflict with Japan

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The beginning of the last day of the trading week was marked by modest attempts to return interest to risk. At least stock markets of the world show stable dynamics, the pressure on the indices weakened. Chinese courts were able to recover slightly. Markets slid on speculation that trump is getting ready to unleash a trade war with Japan, and now investors are hoping that will go away weekends without news about the imposition of duties against China. But it is possible that during the U.S. session the markets will get hit with this front. So during today’s trading, the buyers are likely to act with caution and without excessive enthusiasm.
European stocks show low activity and mostly positive trend in early session. The Italian MIB FTSE 100 continues to strengthen, reflecting favorable cues from the budget negotiations. The yield on 2-year bonds reached the lowest level in a month values, overall well-being of Italian assets is improving.
The Russian market started a careful ascent, but after an initial moderate rebound index Masuri went to negative territory, which is not surprising after yesterday’s increased geopolitical risks – Britain accused the top leadership of the Russian Federation in the poisoning Skrobala, and its position was supported by a number of major countries.
RTS is recovered by 0.5%, reflecting a bullish gap which the ruble is formed at the opening after yesterday’s aggressive sales. However, this is only a technical pullback, whereas the General attitude of the Russian currency leaves much to be desired. The dollar has returned to a mark of 69 rubles., but still can “shoot” to new highs in the case of worsening economic situation.
Aside from geopolitics, the key event will be publication of data on the U.S. labor market, which can set the direction of dollar pairs. Strong figures for wages capable of supporting “American” across the entire spectrum of the market. But if the pace of job creation will disappoint, the overall state of the employment market will be blurred.
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Nathan Lambert
Head of research,
Global FX