Asia
Chinese officials reported that talks with their US counterparts over trade had been “constructive”, even as a new set of tariffs was imposed by both countries on each others’ goods. Chinese stocks managed minor gains, leading the Shanghai and Shenzhen Indices higher on the week.
Japan’s inflation for July missed forecasts. The Consumer Price Index rose by 0.9% year on year, against predictions for a 1% rise, but this was still higher than June’s 0.7% increase. The Nikkei 225 gained just under 1% on the day to 22,601 points as the yen softened against major currencies.
Europe
The FTSE 100 traded in a very narrow band, as has been the case in recent trading sessions, and was unchanged by 10am. Shire (SHP) was the biggest riser after the US Food and Drug administration approved one of its drugs, Takhzyro, which treats a rare genetic disease that causes swelling in different parts of the body and can be life-threatening.
The UK stock market’s calm belies a furious debate among politicians about the state of the nation’s finances after a no deal Brexit. Just after Brexit Secretary Dominic Raab unveiled a number of assessments for various industries, including finance, the Chancellor Philip Hammond reiterated Treasury forecasts that a no-deal Brexit would hit GDP by 7.7% over the next 15 years.
The dispute seemed to have no dramatic effect on the pound, except to confirm the weakening trend of the last few days. Sterling made an attempt at the $1.295 level earlier in the week but has drifted back through $1.285, a weakening trend that is helping to support the FTSE 100’s dollar earners.
North America
US stock markets drifted lower on Thursday but a positive close on Friday – and that it supported by futures markets – would mean indices ended the week higher. It’s been a dramatic week for US news: the S&P 500 hit a record for the duration of a bull run just as President Trump’s former lawyer admitted breaking campaign finance laws. Trump warned that his impeachment would crash the stock market and economy but so far Wall Street has kept its never.
The Jackson Hole meeting of central bankers, which kicked off yesterday, will be framed in the light of Trump’s criticisms of Federal Reserve chairman Jerome Powell. Will Powell respond to criticisms that the Fed has raised interest rates too quickly in his speech on Friday? Kansas City Fed chair Esther George defended central bank independence yesterday and said 2019 will see more rate rises.
Next week sees more Canadian banks report earnings, as well as Hewlett Packard (HPE).