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Wednesday 23 August 2017 13.00

Strong European data boosts confidence in region’s growth

The euro was one of the standout gainers in an otherwise listless day in markets, as strong European data boosted confidence in the region’s growth. Gold and yen benefited as comments from President Donald Trump provoked another bout of investor caution.

The surprise gain in a gauge of euro-region manufacturing did little to spur the Stoxx Europe 600 Index, however, which retreated led by WPP Plc after the world’s largest advertising company cut its revenue forecast. Trump’s threats to end the flagship North American trade agreement and shut down the government over funding for his Mexican wall drove futures on the S&P index lower. Oil turned back toward $47 a barrel after U.S. gasoline stockpiles rose.

Surging demand for ‘Made in the Euro Area’ goods is feeding an economy that is creating jobs and finally also seeing price growth accelerate, providing some succor for the European Central Bank before the start of a central bankers’ meeting in Jackson Hole on Thursday. But on the other side of the Atlantic, Trump’s latest comments once again raised concerns about the administration’s ability to deliver fiscal stimulus, while heightening unease about the future of global trade.

Geopolitical events continue to hover in the background. Trump said during his speech that North Korean leader Kim Jong Un is beginning to respect the U.S., the latest comments that suggest his administration is moving closer to seeking talks over Pyongyang’s nuclear arsenal.

The Stoxx Europe 600 Index sank 0.3 percent as of 11:41 a.m. in London.  The MSCI All-Country World Index dipped less than 0.05 percent. The U.K.’s FTSE 100 Index declined less than 0.05 percent.  Germany’s DAX Index fell 0.1 percent. 

Japan’s Topix index rose 0.3 percent at the close. The Shanghai Composite Index fluctuated before slipping 0.1 percent.  The MSCI Asia Pacific Index rose 0.2 percent.  The Japanese yen climbed 0.2 percent to 109.35 per dollar.

This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management, TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.

 

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