Stock Market News Today 2018/08/06
UK trade secretary Liam Fox thinks the chances of Britain crashing out of the EU without a Brexit deal are high — 60-40 to be exact. He was not the only one making Brexit warnings at the weekend. Philip Hammond, UK chancellor, warned of a French effort to stifle Britain’s financial services sector in red tape after the UK leaves the bloc.
The EU is looking at limiting the legal power it would wield over Northern Ireland to avoid a “no deal“ outcome. Finally, the UK’s biggest companies have become more optimistic about the impact of Brexit on the UK economy.
Brexit News Today. The complications of the UK leaving the EU aside, many bankers and analysts are more worried about moving global finance away from its reliance on disgraced interest rate benchmark Libor. “In many ways this is potentially bigger than Brexit,” Dixit Joshi, group treasurer at Deutsche Bank, said.
HSBC News Today. Higher operating expenses continued to bite at HSBC’s profitability in the first half of 2018 as the bank invested in its retail and investment banking operations. The bank closed its morning session in Asia up 1.5 per cent at HK$73.40, compared with a 0.7 per cent gain by the Hang Seng Index.
Saudi Arabia and Canada News Today. Saudi Arabia is expelling the Canadian ambassador and freezing new trade with the country. The move comes after Canada said it was “gravely concerned” about the arrest of several human rights activists in the Gulf kingdom. Saudi Arabia did not appreciate the “interference”. Staying in the Middle East, Donald Trump’s hopes of delivering the “ultimate deal” to resolve the Israeli-Palestinian conflict are foundering.
UK Insurance Companies News Today. Three large UK insurance companies have been accused of failing to properly spell out the risks their businesses face from climate change. If the complaints against Lancashire, Admiral and Phoenix are upheld, the companies could face fines. This comes after a weekend of extreme hot weather in Europe.
Iran Sanctions News Today. US sanctions on Iran, which had been lifted under the 2015 nuclear accord, go back into effect from today. They cover Iranian trade in automobiles and metals including gold.
Stock Market Overview. European stocks are set to start the week on a solid footing as Asia-Pacific markets shrug off concerns over a fresh round of trade war rhetoric between the US and China.
Asian equities are mostly gaining ground, though stocks in China are down after President Donald Trump’s claim the US is winning its deepening trade war with China, which on Saturday threatened retaliatory tariffs on $60bn of imports from the US.
In Hong Kong the Hang Seng index is up 0.6 per cent thanks to gains for utilities and technology stocks, which are 1 per cent and 0.9 per cent higher respectively.
In China, however, the CSI 300 index of major stocks in Shanghai and Shenzhen is off 0.8 per cent.
Tokyo’s Topix has slipped 0.6 per cent with a 1 per cent fall by financials offsetting gains of 1 per cent in the telecoms segment.
Sovereign bonds are steady, with the yield on 10-year Japanese government bonds hovering above 0.1 per cent following a volatile week that saw it range between 0.053 per cent and 0.142 per cent following the Bank of Japan’s tweaks to its quantitative easing policy. The yield on 10-year US Treasuries is up 1 basis point at 2.956 per cent.
Investors are waiting to see whether the Italian government’s bond-buying operation — which was announced late on Friday — is sufficient to stabilise the country’s bond yields, which climbed late last week as political turmoil once again hit the markets.
Oil prices are rising following news that some US sanctions on Iran will be reinstated.