Daily Analysis - 26/06/2018
Market sentiment has clearly been impacted by the trade spat between the United States and China, as well as with Europe. The Chinese markets were affected the most as Trump’s tariffs on Chinese goods sparked the stock market rout.
China’s benchmark index saw a huge selloff and has entered a bear market. The Shanghai stock exchange Composite Index closed more than 20% below its recent high in January. It fell to a 2-year low as trade war fears intensified this week as the U.S. is set to announce new restrictions on Chinese investment in U.S. companies. This follows from last week’s threats of further tariffs on Chinese imports to the U.S.
Bike maker Harley Davidson reported that it will shift production from the U.S. due to EU tariffs. The European Union threatened to retaliate after Trump announced to impose tariffs on EU goods. One U.S company that would be affected is Harley Davidson. Bikes destined for the EU would increase costs for the company by about $100 million a year. The E.U. is Harley’s second-biggest market in the world. Harley shares fell 6 percent, the biggest drop in almost five months.
EURSEK dropped after the release of Swedish PPI data for May which came in higher than last month. Other than the data from Sweden, the European session calendar is light. In the U.S. session, CB Consumer confidence data is due.
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