Stock Market

Global markets are bracing themselves as the deadline nears for the US to start imposing tariffs on $34bn of imports from China.

European stocks hold nerve into US tariff deadline China markets continue to bear brunt of trade dispute, dollar drifts away from highs.

What you need to know:
European bourses make steady start, with some major export stocks rising.
Equities down in Asia as US-China tariffs deadline looms.
Shanghai, Shenzhen and Hong Kong indices continue to decline.
Euro higher, helped by improved German industrial orders data.
Dollar remains shy of 2018 highs.
Oil prices fall after Trump criticises Opec.

Hot topic:
Global markets are bracing themselves as the deadline nears for the US to start imposing tariffs on $34bn of imports from China, in what will mark a significant milestone in the trade dispute between the world’s two largest economies.

China-focused stocks are continuing to take the biggest hit, with wider Asia-Pacific equities broadly lower. European stocks are making a steady start overall, with some major exporters helping Germany’s Xetra Dax 30 outperform its neighbours.

Meanwhile, the onshore exchange rate for China’s renminbi is holding above the nadir touched earlier in the week as worries ease that the trade dispute could reach the currency market. As investors remain on watch for signs that China will allow the renminbi to weaken markedly as part of its response to Washington’s protectionism, the currency is just 0.1 per cent weaker at Rmb6.6365, well away from the extremes of its daily 2 per cent trading band.

Equities:
Frankfurt’s Xetra Dax 30 is up 0.7 per cent, with carmakers in prominent positions on its leaderboard. London’s FTSE 100 is up 0.3 per cent and the Europe-wide Stoxx 600 is flat.

The CSI 300 index of major Shanghai and Shenzhen-listed stocks is down 0.7 per cent, taking its loss for the week to almost 5 per cent. The Shanghai Composite index is weaker by 0.8 per cent for the session and almost 4 per cent for the week.

Hong Kong’s Hang Seng is down 0.9 per cent.

Tokyo’s Topix is down 1 per cent as industrials dropped 1.2 per cent and financials fell 1 per cent. In Seoul the Kospi was off 0.8 per cent.

But Sydney’s S&P/ASX 200 is up 0.5 per cent as telecoms stocks rose 1.4 per cent and financials climbed 0.8 per cent, although mining stocks were down 0.3 per cent.

Forex and fixed income:
The dollar index is down 0.3 per cent on the day, as its wider rally of almost 2.5 per cent for 2018 leaves it looking tired.

The euro is up 0.4 per cent at $1.1703, helped by a stark improvement in German industrial orders for May. The data beat forecasts having been significantly short of expectations in April.

Japan’s yen is 0.1 per cent firmer at ¥110.32 per dollar.

Despite the tension across equities markets, sovereign bond markets were relatively unmoved with yields, which move opposite to price, on 10-year US Treasuries up 1 basis point at 2.84 per cent.

Commodities:
Oil prices are lower after Mr Trump tweeted about Opec on Wednesday, repeating that lower oil prices should be the quid pro quo for the security ties some members of the group enjoy with the US.

Brent crude, the international benchmark, is off 0.6 per cent at $77.81 a barrel, while US marker West Texas Intermediate is down 0.4 per cent at $73.85.

Gold is basically flat at $1,256.14 per ounce.

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