Europe midday: Stocks take hit after China signals retaliation
By Alexander Bueso
Date: Thursday 15 Aug 2019
(Sharecast News) - Europe's main stockmarket gauges are heading lower after Beijing said that it would retaliate for the latest round of US trade tariffs.
Mid-morning, China' State Council Tariff Committee said that Beijing "has no choice but to take necessary measures to retaliate."
In a statement, the council labelled Washington's decision a violation of the agreement reached between the two countries at the G20 leaders' summit in Osaka, Japan, on 28 June.
As of 1204 BST, the benchmark Stoxx 600 was adding to the previous session's thrashing, retreating by 1.08% to 362.21, alongside a drop of 1.42% to 11,329.20 for the German Dax and a fall of 2.53% to 20,020.28 on the FTSE Mibtel.
To take note of, in Italy there was talk that the recent upheaval in the governing coalition could result in the League being sidelined by a coalition between the Five Star movement and the Socialist PD party, instead of taking over the reins of government, despite its sharp rise in voter polls.
Front month crude oil futures meanwhile were dropping by 2.48% to $58.04 a barrel while euro/dollar was rising by 0.15% to 1.11538.
And the US Treasury yield curve was again slightly inverted.
There was little fresh economic data out of the single currency bloc for investors to chew on come Thursday, although following the Norwegian central bank, some analysts said that rate-setters in Oslo were likely done with raising interest rates.
Monetary policymakers at Norges Bank kept short-term official interest rates unchanged at 1.25% as expected.
But Capital Economics's Davix Oxley detected a 'dovish' shift in the tone of their policy statement.
"In contrast to the market, we think that the Bank has already reached the end of its tightening cycle and we now forecast interest rates to remain on hold until at least 2021," Oxley said in a research note sent to clients.
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