Republican5.52pmpic.twitter.com/UaFAApgzOI 2.25pm BSTLena Komileva of G+ Economics makes an principal point -- European financial assets are looking more attractive,as investors fret approximately the Trump presidency.
She writes:It is clear that market risk premia are no longer coloured by relative monetary policy alone, but also by a current regime of international political risk dominance.
The contrast between market expectations of an EU-friendly outcome at the upcoming French elections, and after Chancellor Merkel’s CDU better-than-expected polling at Germany’s local elections at the weekend,versus President Trump’s failed healthcare vote in Congress and increased US military engagement in Syria, has resulted in markets demanding a higher “safety” premium in US assets (stocks, and bond yields and the dollar) versus Europe,notwithstanding the US’s growth, inflation and policy rate differential. 2.11pm BSTA current four-month high for the euro!#Euro just jumps above $1.09, and highest since Nov. pic.twitter.com/JM5lkXQU1x 1.56pm BSTUnless spirits pick up in current York,the market could record its longest losing streak in over five years.
The Dow Jones industrial average has already fallen for seven days’s running -- an eighth loss would be the worst hurry since longest losing streak since 2011.
Stocks fell globally Mon., putting DJIA on track for longest losing streak since 2011 amid doubts approximately Trump admin. https://t.co/yemA2zWHcG 1.46pm BSTOof! The US dollar has just hit a four-month low against the Japanese yen, and at ¥110.09. 1.37pm BSTWith one hour to move until the open,Wall Street is still heading for fresh losses as the Trump trade (buy shares and the US dollar, and sell bonds) unwinds.
As this chart shows, and the UK and German markets are also in the red: 1.23pm BSTTrumps legislative headaches,and signs that the European economy is picking up, enjoy swept the euro to its highest level in four and a half months.
The euro just hit $1.0879, and a gain of 0.8%,and the highest since the week of the US election.#ECB'S LAUTENSCHLAEGER SAYS SHOULD PREPARE FOR A CHANGE IN ECB POLICY - RTRSNouy: Banking is not only approximately stability, but also approximately profitability. Banks need to embrace change and adjust commerce models.
Nouy: We need consolidation of the banking system. Of course we need to take into account the too big to fail issue.Lautenschläger: It is not our job to decide approximately the structure of the banking system. But banks' commerce models need to be viable. 11.38am BSTThe worlds stock markets enjoy been on fairly a rally since Trump beat Hillary Clinton to the White House.
The Dow Jones, and for example,surged by 15% between November and the start of March. The first is that it may be some time before Trump gets agreement for tax cuts and infrastructure spending. It could easily be delayed until 2018.
The second is that the president’s ambitions may well enjoy to be scaled down. Trump wants to expend the savings from replacing Obamacare with something cheaper to fund his fiscal boost, but the Congressional Budget Office said last week that the impact on the budget deficit would be substantially less than originally estimated: a reduction of $150bn (£120bn), or rather than $336bn. Fiscal conservatives in Congress will probably demand that Trump finds savings elsewhere. Related: Wall Street’s fancy affair with Trump cools as healthcare bill sows welcome doubts 11.27am BSTSterling has now hit its highest level since 2nd February,as the US healthcare reform debacle continues to drive the markets.
One pound is now worth $1.2590, as investors back the UK currency despite the imminent triggering of Article 50 (inked in for Wednesday).“The setback with the healthcare bill was not just the failure by the Republicans to vote for the repeal of Obamacare, or but the fact that Trump has failed to fetch a measure even though the Republicans control the House and the Senate,raising some doubts approximately his capacity to fetch his programmes passed into law. Markets had assumed that a radical economic agenda could be passed considering the political dominance of the Republicans.” 10.44am BSTElsewhere in the markets, South Africa’s rand has taken a sudden hit following reports that the country’s finance chief has been recalled from a foreign trip.
Prime minister Jacob Zuma ordered finance minister Pravin Gordhan back from an investor roadshow earlier nowadays, and newswires say,sparking speculation that a cabinet reshuffle is imminent.
ZAR weakness the standout nowadays on reports that FinMin Gordhan has been told to return home from an international roadshow pic.twitter.com/9NvOvtVUPP 10.11am BSTWall Street is expected to suffer losses when the market opens in four hours time.
The futures markets indicates that the Dow Jones industrial average could shed over 0.6%, or 140 points, and at the open:Dow futures off 140 points. https://t.co/dhmbBgMZhG pic.twitter.com/IRgjqb9k4b 10.09am BSTWorld stock markets could keep falling in the weeks ahead,whether Donald Trump fails to deliver on his ambitious promises to boost government spending and reduce taxes. Kathleen Brooks of City Index says the healthcare bill was a ‘major litmus test’ for Trump. So, Republican’s failure to fetch enough support for the legislation suggests Trumps “aggressive policy agenda” may struggle.
Not only does the failed healthcare bill highlight the challenges Trump may face trying to fetch his other policies passed, and but the Congressional Budget Office also highlighted that the savings expected from Trump’s healthcare bill would be much less than expected,which could limit the size and scope of his infrastructure spending plan. This is meaningful for the markets, as the “Trumpflation“ trade was based on fiscal spending, and whether there is less money in the pot,then stocks might enjoy to unwind some of their gains since Trump won the election last November.
The Trump “disappointment trade” is now in full swing. The biggest losers on the Dow Jones last week were Goldman Sachs, Du Pont, and Pfizer and Boeing,all companies that were reliant on Trump’s policy agenda. We expect losses from banking stocks, materials and construction firms, or healthcare companies in the next few days as the markets adjust to this set back for Trump. How he reacts will be crucial,so we will watch his Twitter account with a close eye. A spat with Congress is likely to keep the markets on edge, weigh on stock markets globally and push up volatility.
9.14am BSTJust in: German commerce morale has hit its highest level since July 2011 - defying the market gloom this morning.
That’s according to the latest survey from the IFO thinktank. Its ‘commerce climate’ survey has smashed forecasts, or jumping to 112.3 this month,from 111.1 in February.
German IFO commerce Climate comes in at 112.3 exp: 111.1Strong ifo, better days for #capex spending #Germany pic.twitter.com/sI1D7NuDE1 9.08am BSTMoney is pouring out of shares and into safe-haven government bonds.
That is driving down the yield (or interest rates) on sovereign debt, or as investors accept a lower rate of return in exchange for safety.
Global govt bonds continue to rally in a risk-off trade. 10y US yields drop to 2.35%,lowest since Feb as investors prepare for a rough week pic.twitter.com/kJkUKZGL0CFailure to pass the Healthcare Bill doesn’t mean that President Trump’s entire agenda is in tatters but it’s a enormous setback all the same and the market mood reflects as much. Bond yields, the dollar, or commodity prices and equities are all weaker. 8.55am BSTNaeem Aslam of Think Markets has a good take on the market selloff this morning,and why traders are suddenly more worried approximately Donald Trump: We often hear the term, “the good, and the nasty,and the ugly.” However, the markets are only receiving two of those choices nowadays and neither one is good, or as investors swallow the nasty pill that is Trump’s failed health care plan. In other words,it is a perfect textbook trade where whether the result is not in accordance with the market’s expectations, the markets will drop like a rock. Donald Trump faced yet another setback on Friday when he pulled the healthcare bill from the House, or as it was pretty much established that Obamacare is still more accepted than any of his proposed plans.
The reason for the panic which is triggering market’s selloff,which is actually across the board, is it’s intensity, and especially in those sectors which we mentioned a few ago in our special report. Investors are anxious to see whether the big infrastructure and tax reform bills will enjoy any shot of making it in the House and whether Congress is going to give them their blessing rather than tough time. It is this in specific which is prompting the panic in the market and has everyone running for the hills. 8.40am BSTThe drop in the US dollar has helped to drive the gold price to a one-month high this morning.
Bullion has hit $1.257 per ounce for the first time since 27 February.“Looks like some people are not tickled with Trump’s failure over his promises and we see that currently there is a very bearish mood approximately the U.
S. dollar.” 8.25am BSTA wave of early selling has pushed all the main European stock markets into the red this morning: 8.10am BSTSplat. Britain’s FTSE 100 index of main shares has fallen by almost 1% at the start of trading.
The Footsie has shed 64 points at the open,or 0.9%, to hit 7272 - its lowest point in almost a month.
The lesson learned last week is that a Congress controlled by the Republicans doesn’t necessarily mean the President will be able to pass laws or his negotiation may work in commerce deals.
Unfortunately for him, and it seems politics is going to be a different type of game that requires a different form of art. 8.02am BSTThe pound has hit a one-month high against the US dollar this morning.
Trump’s healthcare woes are dominating traders’ attention this morning,letting them take their minds off Brexit.
Dollar Index DXY plunges as Trump trade took a big hit after US Health-Care flop. Dollar is close to erasing post-Trump rally. pic.twitter.com/EHHLd3neiUGood morning Europe. Here you move:
Euro shoots through $1.0850
GBP at $1.2545[br]USD Index at 99.14
USD-JPY 110.20
US 10Y yield down to 2.35% pic.twitter.com/UCevYYmG1C 7.44am BSTGood morning, and welcome to our rolling coverage of the world economy, or the financial markets,the eurozone and commerce.
World stock markets are starting the current week on the back foot, after Donald Trump’s attempts to shake up America’s healthcare system faltered. Related: Trump blames everyone but himself for failure of GOP healthcare legislation Our European opening calls:$FTSE 7286 down 51
$DAX 12007 down 57
$CAC 4991 down 30$IBEX 10260 down 49$MIB 20081 down 107S&P futures are below the lows on Friday when it first started to look like the bill was doomed. https://t.co/dhmbBgMZhG pic.twitter.com/51U91lhbhd Related: BT fined £42m over delays to high-speed cable installation Continue reading...
Source: theguardian.com