European Shares To Open Lower As Trade Worries Weigh

European stocks are likely to open lower on Thursday as investors fret over U.S.-China trade tensions.

The United States and China appear to be bracing for a prolonged standoff over trade after the U.S. squeezed Chinese companies by threatening to shut off supplies of those key components.

Hopes are now being placed on the Xi-Trump meeting on the sidelines of the G20 meeting in Japan at the end of June.

Asian stocks slipped into the red as investors fret about the adverse effects of trade tensions on global economic growth.

A report from the South China Morning Post said China is re-examining the entire bilateral economic relationship between the U.S. and China.

Separately, U.S. Treasury Secretary Steven Mnuchin told CNBC’s Ylan Mui the U.S. has no plans to go to Beijing to resume trade negotiations.

China’s yuan held steady as authorities try to cap the currency’s decline amid the Sino-U.S. trade conflict. The People’s Bank of China set its daily fixing for the currency at a stronger-than-expected level for a fourth straight day.

The dollar index pushed higher while the British pound fell amidst speculation British Prime Minister Theresa May could be forced out of office over coming days.

Oil prices extended losses after suffering their biggest single session fall in three weeks on Wednesday as data from Energy Information Administration showed a sharp jump in U.S. crude stockpiles last week.

Elections to the European Parliament, the EU’s legislature, will take place between May 23rd and 26th as euroskeptic far-right parties attempt to build a coalition to try to remake the EU.

Revised quarterly national accounts, flash purchasing managers’ survey results and Ifo business confidence are due from Germany later today, headlining a busy day for the European economic news.

At 7.30 am ET, the European Central Bank releases accounts of the monetary policy meeting of the Governing Council held on April 9 and 10.

U.S. stocks fell modestly overnight amid continued escalation in trade tensions and as a U.S. federal judge ruled that Qualcomm illegally suppressed competition for cellphone chips.

Meanwhile, minutes from the latest U.S. Federal Reserve meeting showed that the central bank is in no rush to alter the path of interest rates amid an environment of moderate U.S. economic growth and muted inflation pressures.

The Dow Jones Industrial Average dropped 0.4 percent, the tech-heavy Nasdaq Composite shed half a percent and the S&P 500 eased 0.3 percent.

European markets ended mixed on Wednesday on mounting worries about a long drawn U.S.-China trade war and growing uncertainty about Brexit.

The pan European Stoxx 600 ended flat with a negative bias. The German DAX rose 0.2 percent and the U.K.’s FTSE 100 inched up 0.1 percent while France’s CAC 40 index edged down 0.1 percent.

European Shares Seen Opening On Steady Note

European stocks look set to open a tad higher on Wednesday, with easing of U.S.-China trade tensions and a stronger dollar likely to underpin sentiment.

The U.S. dollar hovered near a four-week high on the back of higher U.S. Treasury yields as investors awaited the release of minutes from the latest Federal Reserve policy meeting, due out later in the day.

Asian stock markets traded cautiously and the Japanese yen held largely steady after Japanese exports fell for a fifth straight month in April, in a sign of weakness in external demand. On the positive side, the country’s core private-sector machinery orders rose for the second straight month.

The British pound is hovering near a four-month low after British Prime Minister Theresa May set out what she called a “new” Brexit deal for Britain’s departure from the EU.

The deal offers the option of a parliamentary vote on holding a second referendum on her deal if it clears the Commons next month.

Oil prices fell modestly after the American Petroleum Institute reported another surprise build in crude oil inventories.

On the data front, consumer and producer prices as well as public sector finance reports from the U.K. are due later in the day, headlining a light day for the European economic news.

At 3.00 am ET, European Central Bank President Mario Draghi is set to speak at an event organized by the ECB in Frankfurt, Germany.

U.S. stocks rose overnight, with tech shares leading the surge after the Commerce Department temporarily eased trade restrictions on Chinese tech giant Huawei and Google said it would continue to work with Huawei over the next 90 days.

The Dow Jones Industrial Average climbed 0.8 percent, the Nasdaq Composite advanced 1.1 percent and the S&P 50 added 0.9 percent.

European stocks also closed higher on Tuesday as tensions eased slightly in the escalating trade war between the U.S. and China.

The pan-European Stoxx 600 added half a percent. The German DAX gained 0.9 percent, France’s CAC 40 index rose half a percent and the U.K.’s FTSE 100 inched up 0.3 percent.

Global markets are rallying after Trump tempers his Huawei ban after ‘big reality check’

  • Asian and European stocks and US futures rose on Tuesday after Trump tempered his Huawei ban.
  • The Chinese telecoms giant can buy US products to maintain its networks and release software updates, but it can’t buy American components for new devices.
  • “This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are,” said Jasper Lawler, head of research at London Capital Group.

Asian and European stocks and US futures rose on Tuesday after US President Donald Trump tempered his Huawei ban, permitting US companies to do business with the Chinese telecoms titan for another three months.

Huawei’s blacklisting hammered US companies that trade with it or rely on its services or equipment. For example, shares in chipmakers Qualcomm, Broadcom, Micron Technology, and Nvidia fell by more than 3% on Monday, sending the tech-heavy Nasdaq index down 1.5%.

In response to the fallout, the US Commerce Department has granted Huawei a temporary license to buy US products to maintain its networks and release software updates for existing smartphones and tablets. However, Huawei is still banned from buying American components to manufacture new devices.

“This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are,” said Jasper Lawler, head of research at London Capital Group. “Yesterday was a big reality check for Trump and shows the incomplete information available for his decision.”

The Huawei ban came after Trump accused China of sabotaging a prospective trade deal, hiked tariffs on $200 billion worth of Chinese goods, and threatened to extend tariffs to a further $300 billion worth. China retaliated with higher tariffs on $60 billion worth of US goods, starting in June.

“Whether it’s Huawei or tariffs, I would see all of this in the broader context of giant tug-of-war between the two superpowers being played out in front our eyes,” said Neil Wilson, chief market analyst for Markets.com. “As such, the more this goes on the lower the chance of a meaningful resolution to any of it.”

Here’s the market roundup as of 9.50 a.m. (4.50 a.m.):

Asian indexes regained ground. The Shanghai Composite climbed 1.2%, the SZSE Component jumped 1.9%, and Hong Kong’s Hang Seng rose 1.3%.

European equities opened higher with Germany’s DAX up 0.6%, Britain’s FTSE 100 up 0.5%, and the Euro Stoxx 50 up 0.4%.

US stocks are set to open higher. The futures underlying the Dow Jones Industrial Average and S&P 500 rose 0.2%, while Nasdaq futures climbed 0.4%.