The US president has sent mixed messages around trading terms with the EU ahead of the meeting, taking to Twitter on Tuesday to say “tariffs are the greatest”, but then suggesting that the US was ready to “drop all tariffs, barriers and subsidies” with the EU.
What you need to know:
> European equities flat ahead of Trump-Juncker meeting
> Forex and debt markets steady
> Oil edges higher
> Facebook earnings in focus
The Stoxx 600 index of European stocks was up 0.1 per cent in early morning trading on Wednesday while the FTSE 100 was down 0.1 per cent.
Deutsche Bank shares were up 0.4 per cent after the German lender, which pre-released better than expected numbers last week, announced it was roughly halfway through hitting its full-year target of reducing its workforce by 4.7 per cent in 2018.
Wizz Air’s share price tumbled around 10 per cent after the low-cost carrier blamed air traffic control strikes and shortages for a 14 per cent fall in pre-tax profit.
In Asia, China-focused stocks were mixed as this week’s stimulus-driven rally showed signs of losing steam.
The CSI 300 index of major Shanghai and Shenzhen-listed stocks was down 0.2 per cent after dipping in and out of negative territory in the morning session, but in Hong Kong, the Hang Seng China Enterprises index was up 1 per cent. Both indices on Tuesday touched their highest levels since June.
The moves came after US quarterly corporate earnings boosted Wall Street on Tuesday, with the tech-heavy Nasdaq Composite index climbing to a record intraday high. Investors will look to results from Facebook, which will be released after the US stock market closes on Wednesday.
Fresh moves this week by the Chinese authorities to stimulate the country’s economy injected a more confident tone into global equity and industrial metal markets on Tuesday. But while market reaction has been broadly positive, ING China economist Iris Pang was wary about overstating the scale of the stimulus.
“While the State Council has announced $386bn in fiscal stimulus, only a small portion of this is new, ie real stimulus, rather than just planned spending,” Ms Pang said. “The good news, however, is that the government wants to spend money earlier than planned.”
Forex and fixed income:
Foreign exchange and sovereign debt markets were steadier as the impact of China’s economic stimulus and speculation earlier in the week about the trajectory of Japan’s monetary policy waned.
In China, the onshore renminbi exchange rate, which moves within a trading band of 2 per cent to either side of a midpoint, was 0.16 per cent weaker at Rmb6.77800 per dollar, a day after the Chinese currency touched a fresh one-year low.
The US dollar index was down 0.1 per cent, while the Japanese yen was flat.
Government bonds rallied on Wednesday, with the 10-year Japanese bond yield down more than 2 basis points at 0.049 per cent, after touching its highest level in six months on Monday amid market speculation about potential changes to central bank monetary policy.
Oil prices pushed higher with investors expecting upcoming data from the Energy Information Administration to show falling US inventories, according to ANZ analysts. Brent crude rose 1 per cent to $74.14 a barrel while West Texas Intermediate added 0.5 per cent to $68.85. Gold was up 0.2 per cent at $1,227 an ounce.