Daily Market Report 21.05.2019
The Chinese ambassador to the EU said that his government “will not sit idly by” as the trading dispute between China and the U.S. continues. The U.S have eased trade restrictions for the Chinese tech giant Huawei temporarily to minimise disruption and maintain existing networks and handsets. Huawei suppliers have been hit in the stock market with Qualcomm falling 6% and Micron Technology 4%. The S&P index lost 0.7% while Nasdaq dropped 1.5%. China’s CSI300 gained 1.4% following after having fallen to a three-month low as Washington eased the restriction on Huawei to allow temporary buying of American goods.
Oil prices continue their climbing as tensions between the U.S. and Iran escalate. OPEC is expected withhold supply this year. Brent futures gained 0.4% from the last close reaching $72.24 per barrel and WTI was up 26 cents to $63.36. After President tweet that “If Iran wants to fight, that will be the official end of Iran…” followed Iranian reactions asking the U.S. to address the Islamic Republic with respect accusing the military lobby for pushing for a war. Iran said it will pass the previously set cap for low-enriched uranium under the 2015 deal from which the U.S. has withdrawn. Iran has set a 60-day limit for the remaining signatories of the deal – Russia, China, Britain, France and Germany - to safeguard its oil and banking sectors.
An international fair will take place in North Korea this week despite the sanctions on the country. Over 450 companies from China, Russia, Pakistan, Poland etc. are all joining the largest such event on record. Not much can happen in terms of trade but the event is officially an opportunity for economic cooperation, science and technology exchanges with most companies that are taking place walking a fine line. Businesses instead, say they are joining the event to be ready for when the sanctions are lifted.
A number of companies including Spotify and Volkswagen are urging people to vote in key European elections following a growing result in polls of anti-EU parties. EU companies are worried that business might be disrupted should there be a major shift in EU policies especially if free trade in the common market is restricted. It follows British chancellor’s stance that leaving the EU and the common market without a deal will be damaging the British economy deliberately.
