UK stocks: fears of trade wars in the avtosegment

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European markets in the near term, despite a trade agreement between the U.S. and Mexico will remain under pressure and the possible introduction of sanctions on imported cars from Europe.
At the moment market participants expect that within 90 days will be signed a new agreement instead of the agreement on North American free trade area (NAFTA). However, investors frightened by the statement of the President of the United States Donald trump that the presence of Canada in this transaction is not required.
In connection with this uncertainty, European investors still do not rule out the introduction of higher import sanctions on cars imported from Europe. In addition, traders also fear a new round of tariffs on Chinese goods. In September, the US can enter the next “tranche” duties on Chinese imports with a volume of $200 billion.
It can be expected that in the current situation of geopolitical instability in the world currency market will be the growth of the dollar against other world currencies, particularly against the Euro.
However, in the world market of oil also there is a constant change of moods. In the medium term, support to oil quotations has an expectation of reduction of oil supplies from Iran, as the country is suffering from the economic sanctions of the United States. As expected, in September the volume of deliveries of Iranian oil to the world market will decline by 1.5 million barrels per day.
While earlier, the market participants were waiting for the reduction of oil supplies from Libya, as many fields were affected by war. Now, however, after the end of the fighting, Libya’s oil production has stabilized at more than 1 million barrels, which could have a negative impact on dynamics of world prices.
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Ivan Marchena,
Analyst
GK Forex Club