European stocks down before US-China trade talks – companies live | Business

Neil Wilson, chief market badyst at Markets.com, said:

All major European indexes were down on Monday after Friday's sharp run-up. A break to catch your breath or just a lack of conviction at a rally? Major indexes continue to reach new highs since the December lows, so now it seems that momentum is on the rise, although the FTSE 100 is a significant underperformance relative to its peers. peers.

This is of course a huge week for sterling traders, with the Brexit second round vote taking place on Tuesday. Expect some volatility around the votes, as we saw last time – there will be a lot of noise.

The spot market price action and the much lower implied volatility of the options seem a little complacent, as time is running out and as we get closer to March 29th^th without agreement, the greater the risk of lack of agreement, even if the parliament now has a chance to make sure that this is removed from the table. The amendment to delay Brexit may be adopted, although nothing guarantees the EU's acceptance. The deadlock will require either a non-negotiation or a general election, followed by a second referendum.

With regard to the latest round of trade talks between the United States and China, due to start Wednesday, Wilson said:

Equity markets are ready for a significant week as we turn to these discussions. Both parties have reason to reach an agreement. However, I would think that with the reopening of the government after the closure, Trump is in a strong position that it could have been if the federal government had still been shut down at the time of the Chinese authorities' disembarkation. .

The pound fell 0.3% against the dollar to $ 1.3162.

It's another big week in Westminster: MEPs will vote tomorrow on the amendments to Theresa May's withdrawal agreement with the EU.

What is happening tomorrow and why is it important?

Gold has fallen but remains close to a seven-month high, boosted by expectations that the US Federal Reserve will keep interest rates unchanged at this week's meeting, the first of this year. The Fed raised rates four times last year and announced two more hikes this year.

Spot gold trading around $ 1,301.14 per ounce, down 0.17% (following a rebound of 1.8% on Friday), while futures on US gold rose 0.12% to $ 1,299.6 ounce.

The Fed will begin its monthly meeting tomorrow and announce its decision on Wednesday. President Jerome Powell should recognize the growing risks to the US economy as the global outlook weakens.

His counterpart at the European Central Bank, Mario Draghi, warned last week that a trough in the eurozone economy could widen, suggesting that the first interest rate hike by the Bank is still far behind. Draghi will speak at the European Parliament in Brussels later today.

German companies Dax, Spain's Ibex and Italy's FTSE MiB opened a 0.4% decline, while France's fell by 0.5%.

The FTSE 100 index opened 21 points lower at 6787,094, a decline of 0.3%. Ocado is the main riser, up 6.5% to 999.5%, after finding that the online grocer had held secret talks with Marks & Spencer about launching a food delivery service. Shares in M ​​& S are also up by more than 2%.

Ocado has been linked to Waitrose for 20 years, but the current supply contract ends in September 2020. Analysts in the city expect that the two companies, which have always had a stormy relationship, separate.

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The latest round of trade talks between the United States and China begins in Washington this week. A delegation led by Vice Premier Liu He is scheduled to arrive on Wednesday.

Discussions will focus on China's foreign exchange practices, said US Treasury Secretary Steven Mnuchin, who will lead the US team alongside US Trade Representative Robert Lighthizer. Mnuchin criticized the weakness of the yuan in the past, but the optimism generated in recent days by trade talks has strengthened the yuan against the dollar.

Asian equities dropped their previous gains to close lower. China's benchmark, Shanghai Composite, lost 0.18%, while that of Hong Kong, Hang Seng, recorded a slight decrease of 0.09% and that of South Korea, Kospi , 0.02%. The Nikkei of Japan lost 0.6% while the Australian markets were closed for the feast of Australia.

The FTSE 100 index in London and other European markets should open lower.

In the United States, Donald Trump agreed Friday to put a temporary end to the 35-day government shutdown, which is one of the longest in the history of the United States. The news triggered a rally on Wall Street Friday as investors were relieved.

The White House denied on Sunday that Donald Trump had "yielded" to the Democrats by reopening the federal government without receiving funding for a border wall – an agreement that Trump had promised never to conclude.

Also coming this week

The next key debate on Brexit in the House of Commons will be tomorrow. The pound has made some gains in recent weeks hoping that a Brexit "without agreement" can be avoided.

Michael Hewson, Chief Market Analyst at CMC Markets, said:

It sounds more like wishful thinking than anything else, given parliamentary arithmetic and politics.

Markets seem to trust politicians much more than many believe, but the pound has hit a 18-month high against the euro on the grounds that an extension of Article 50 might do well. the subject of an amendment when Parliament meets trying to break the stalemate on the withdrawal agreement and the UK political declaration tomorrow.

The US Federal Reserve, the US central bank, holds its first policy meeting this year. Wednesday and should leave interest rates unchanged after raising them five times.

L & # 39; s calendar

14.30 GMT Mario Draghi of the ECB speaks at the European Parliament in Brussels