Summary:
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Donald Trump may reignite trade conflict by doubling tariff rates
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Declines on the commodity market
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Investors await FOMC decision
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GBP surges despite downbeat manufacturing PMI reading
Equities in Europe are trading lower on the day being dragged down by resurfacing trade tensions between China and the US. Do note that UK stocks are subject to the biggest sell-off as the UK FTSE 100 (UK100) is trading more than 1.3% below yesterday’s close. Investors’ attention is turned to the FOMC decision today even as Fed is expected to leave monetary settings unchanged. Despite lacklustre manufacturing PMI reading the British pound is outperforming other G10 currencies. On the other hand, the Swedish krone gives back some of its recent gains being the top laggard among majors. As a result of rise in trade tensions commodities trade lower on the day.
Paul Krugman, a Nobel Prize winner, has addressed Bitcoin recently. Krugman, who won the Nobel Prize in economics, claimed in his New York Times article that Bitcoin, just like other cryptocurrencies, erases 300 years of monetary system legacy. Economist stated that cryptocurrencies have no tether to reality, so the collapse of this market is likely.
UK manufacturing PMI fell short of the median estimate in July coming in at 54 points against the expected 54.2. It means a fall from 54.4 points registered in June and signals no long-lasting improvement on the horizon. Nevertheless, neither the British currency nor the FTSE100 (UK100) have responded notably to the reading.
Leading one of the biggest European economies is surely a tough job, especially as you are expected to withdraw your country from the European Union. According to Bloomberg report, the UK Prime Minister Theresa May decided to shorten her holiday to continue with Brexit negotiations. May will sacrifice one day of her recess to meet the French President Emmanuel Macron.
Finally, let us write a few words about Apple which presented quite buoyant earnings for its fiscal third quarter. EPS totalled $2.34 smashing the consensus at $2.18 while revenue amounted to $53.3 billion and also exceeded expectations at $52.34 billion. On the other hand, iPhone sales fell short of the median estimate at 41.79 million and came out at 41.3 million.
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