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19 March 2018
 |
| Hong Kong financial markets (The Total Investment & Insurance
Solutions) |
Global stock markets have started the new week on a soft note, weighed
down by worries about a trade war.
KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares
was down 1.2 percent at 7,078 while Germany's DAX fell 0.6 percent to 12,314.
France's CAC-40 was 0.5 percent lower at 5,255. U.S. stocks were poised for a
soft opening, with Dow futures and the broader S&P 500 futures 0.5 percent
lower.
TRADE WORRIES: With finance ministers and central bankers from the Group
of 20 leading industrial and developing nations meeting in Buenos Aires Monday
and Tuesday, there is mounting concern that a global trade war may be looming
following the decision of U.S. President Donald Trump to slap tariffs on
imported steel and aluminum. The European Union, for example, has already
published a list of American products it plans to tax if it is not exempted
from the tariffs announced by Trump. They are worth around 2.8 billion euros
($3.4 billion) in trade annually, but the list could grow to the equivalent of
6.4 billion euros once the full extent of the impact of U.S. tariffs is known.
ANALYST TAKE: "It's been a rocky start to trading at the start of
the week, as the prospect of a trade war becomes ever more real," said
Craig Erlam, senior market analyst at OANDA. "Despite what he says, I'm
not sure that a trade war is what Trump actually wants from these tariffs or that
he'll find much support for one within his party."
FED WATCH: Investors will also be closely monitoring this week's first
meeting of the U.S. Federal Reserve's rate-setting committee under newly
appointed Fed chairman Jerome Powell. Another quarter-point increase in the
Fed's benchmark rate is anticipated. More important for investors is what the
Fed says about the U.S. economic outlook and in particular its forecasts for
inflation. "Jay Powell's first meeting as chairman will end with a rate
hike, but the accompanying statement's tone and forecast update will be key for
markets," said James Knightley, chief international economist at ING.
CHINA'S NEW FACES: A U.S.-trained economist was named to succeed
longtime Chinese central bank governor Zhou Xiaochuan as part of a slate of new
economic officials. The appointments come as Beijing tries to rein in surging
debt and reduce financial risk. The new governor of the People's Bank of China,
Yi Gang, is a 20-year veteran of the bank and known to foreign investors and
regulators as head of China's foreign exchange regulator.
ASIA'S DAY: The Shanghai Composite Index added 0.3 percent to 3,279.25
while Tokyo's Nikkei 225 fell 0.9 percent to 21,480.90. Hong Kong's Hang Seng
added 12 points to 31,513.76 and Seoul's Kospi lost 0.8 percent to 2,475.03.
Sydney's S&P-ASX 200 advanced 0.2 percent to 5,959.40.
ENERGY: Benchmark U.S. crude fell 9 cents to $62.32 per barrel in
electronic trading on the New York Mercantile Exchange while Brent crude, used
to price international oils, rose 5 cents to $66.26 per barrel in London.
CURRENCIES: The euro was up 0.2 percent at $1.2314 while the dollar rose
0.4 percent to 106.29 yen.The Total
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