Stocks fade after bright start; GBP gains on solid jobs data

3:37 PM 11 June 2019

Summary:

  • S&P500 pulls back after hitting 5-week high

  • DE30: No merger between Commerzbank and ING?

  • GBP looks to gain as UK labour market remains strong

  • Trump tweet weighs on the US dollar

 

US equities have built on their recent gains this afternoon after Wall Street opened brightly, with all the large-cap benchmarks trading higher. Since last Monday’s low there’s been an incredible run higher for stocks, with the S&P500 adding in excess of 6% and the most widely viewed US index began above the 2900 mark this afternoon for the first time in over a month. However, there has been some notable selling into the close in the past couple of sessions and the early promise has already begun to fade a little during today’s session.

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app
 

A few days ago rumours surfaced that the German and Dutch governments may pursue merger of Commerzbank (CBK.DE) and the Dutch ING. Martin Zielke, CEO of Commerzbank, and Ralph Hamers, CEO of ING, were seen meeting at least twice recently. However, the odds were not in favor of the tie-up going through as there are significant regulatory hurdles towards cross-border banking mergers in the European Union. The case was even highlighted by the ING executives last week. The talks are said to have broken down already according to today’s Handelsblatt report. Note that tie-up of Commerzbank and ING had a potential to create the biggest bank in Germany as the two hold, respectively, second and third position on the German market.

 

The most recent UK employment figures have come in a little better than expected, with more jobs than forecast added in April while wage growth also beat to the upside. The unemployment rate remains near a multi-decade low, and all in all there’s very little here to suggest any weakness here. Despite this strong data, the overall picture for the UK economy remains one that is far from thriving and it looks to be simply treading water to be honest; but given the dual headwinds of ongoing political uncertainty and a slowing global economy the current level of activity could arguably be viewed as about as good as could be expected under these circumstances. With wages around these levels there would in normal times be growing calls for a rate hike from the Bank of England to see off the threat of inflation, but it remains highly unlikely there’s any change in policy any time soon given the unresolved Brexit situation.

 

There’s been a bit of movement in the US dollar after the following tweet from Trump, with the US president seeming to look to lean on the Fed once more. The US central bank meeting next week is keenly anticipated, with Friday’s NFP miss seeing calls for a rate cut grow increasingly vociferous. Trump almost comically chose to complain about tourist spots in Europe becoming crowded by blaming the weak currency before claiming that the Fed interest rate was to high and finally blaming “ridiculous quantitative tightening” on the central bank and claiming they “dont have a clue”. Next week’s Fed meeting is keenly anticipated and this could be one of the main market-moving events of the month.

 

Share:
Back
Xtb logo

Join over 935 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
test_cookie cc 25 January 2024
adobe_unique_id cc 1 March 2025
__hssc cc 8 September 2022
SESSID cc 2 March 2024
__cf_bm cc 8 September 2022
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-98728395-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_gcl_au cc 30 May 2024
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
__hstc cc 7 March 2023
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 7 March 2023

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language