European stocks shrug off trade deal concerns

European stocks shrug off trade deal concerns 981 980 Realm

Comments that the US/China trade deal was “over” by White House advisor Peter Navarro caused futures to fall sharply overnight. Recovery came quickly after President Trump insisted that the deal was still in place. European markets appear to have shrugged off the issue and are higher this morning.


Global Macro

  • The consumer confidence in the Euro Area rose by 4.1 points to -14.7 in June 2020 from -18.8 in May and compared with market expectations of -15, a flash estimate showed, as governments gradually eased coronavirus lockdown restrictions. In the European Union as a whole, consumer sentiment increased by 3.9 points to -15.6.
  • The Chicago Fed National Activity Index in the US rose to a record high of 2.61 in May from a downwardly revised record low of -17.89 in April as some lockdown restrictions caused by COVID-19 epidemic were lifted. All four subindexes made positive contributions in May with production and employment-related indicators leading the gains. The three-month moving average, CFNAI-MA3, moved up to -6.65 in May from -7.50 in April, still pointing to a likelihood of a recession. Periods of economic contraction have historically been associated with values of the CFNAI-MA3 below -0.70.
  • The People’s Bank of China held its benchmark interest rates steady for the second straight month at its June fixing after the central bank maintained borrowing costs on medium-term loans last week, as policymakers adopted a wait-and-see approach amid tentative signs of economic recovery. The one-year loan prime rate was left unchanged at 3.85 percent from the previous monthly fixing while the five-year remained at 4.65 percent.
  • On Monday: European stocks ended weak as reports showing a surge in coronavirus in the U.S. and marked spikes in new cases in several parts across the globe weighed on sentiment. US stocks mostly higher over the course of the trading day after showing a lack of direction early in the session. Asian stocks ended flat to slightly lower as rising coronavirus cases in the U.S. and other parts of the world diminished hopes of a quick economic recovery.
  • Monday’s data below:

Disclaimer:  ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy. This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.