Germany to cut growth forecast to 1 % in 2020

The German Goverment has cut the economy growth forecast to 1 % growth in 2020 compared to earlier estimate of 1,5 %.

Markets expect that the Goverment might think of new fiscal stimulus actions in orber to boost the econony.

The Dax-index was in green in Frankfurt and the index showed nearly 0,30 % increase in the stock prices.

In London the FTSE 100- index was up 0,77 % due to the Brexit-deal agreement between the UK and EU. The EU leaders are expected to accept the deal in Brussels today. The UK Parliament is to vote about it on Saturday.

The Northern Ireland’s DUP has said that they will not accept the deal.

Stocks in Wall Street, US opened also up due to the news that the Brexit-deal is agreed on Thursday. S&P 500 -index was up 0,58%.

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Trump to meet Chinese top negotiator Liu on Friday

The US president Donald Trump will meet the top trade negotiator from China  in Washington on Friday.  According to his Twitter, he will meet Mr Liu He in the White House.

According to Bloomberg, last week the US Administration approved licenses for some American companies to sell tech goods to Huawei Technologies. And China agreed to buy more US agricultural products.

The latest US China trade news have lifted the stock markets and Dow Jones index is now trading up 0,62 %, S&P 500 -index up 0,60% and Nasdaq index up 0,64%. In London, the stocks were also up 0,38 %.

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Brexit: PM does not have to ask for extension – Court

The Scottish judge has today announced that the UK Prime Minister Boris Johnson does not have to ask for the extension to the Brexit-deal if there is no deal ready by 19 October.

The EU leaders summit is taking place 17-18 October and some MPs have asked that the UK Government should ask extension to Brexit if the leaders are not able to reach an agreement in order to avoid the no-deal scenario.

This positive sign for possible Brexit deal was welcomed in the markets and FTSE 100 -index closed up 0,59% to 7197 points in London. In Germany the markets closed also up and Dax-index rose 0,70 % to 12097 points. In France the CAC 40 -index closed up 0,61 % to 5521 points.

 

 

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Brexit: The question of general elections

This weeks topic in the Brexit discussion is the question of possible general elections.  The PM Boris Johnson has said he would take the UK out of the EU block by October 31st the deadline and the EU has said that the negotiations are ongoing with the parties, but no news is from their side.

According to Bloomberg, the Prime Minister Johnson is planning general elections on October 14th, if the Parliament is forcing the Cabinet to delay the Brexit until January 31st.

Last week the Prime Minister Johnson announced that the Parliament would be suspended until mid-October, when the Queen is reopening the Parliament.

The UK sterling is trading at  1,099 euros and 1,2066 dollars.  The FTSE index closed today up 1,04 % to 7281 points in London.

 

 

 

 

 

 

 

 

 

 

 

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Brexit: Pound falling to new lows

The UK Sterling fell to new lows on Tuesday trading as the market speculation about no-deal Brexit widened. Britain’s currency dropped 0.51 % to 1.2154 dollars. It has fell 4.3 % since the end of June.

The no-deal Brexit speculations widened because of the comments of the new Prime Minister Boris Johnson related to the exit. According to him, the UK would like to negotiate a new deal with the EU, but if this is not going to happen, he is ready and according to his remarks, the Government is also ready to take the UK out of the block without a deal if needed.

The stock markets were trading also down in Europe. In London, the FTSE 100 index was down 0,29 % to 7664 points, in Germany the DAX index was down 2,22 % to 12 142 points and in France the CAC40 -index was trading down 1,53 % to 5515 points.

In Asia, the Nikkei 225 index closed up 0,43 % to 21 709 points and the Hang Song in Hong Kong closed up 0,14 % to 28146 points.

 

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Stocks down in NY due to new trade tariffs

The US stock markets closed down today due to the US China trade dispute. Mr President Donald Trump said in the CNBC interview that he is preparing to have new tariffs for 300 billion dollars for goods if the Chinese President Xi Jinping is not meeting in the G20 meeting in Osaka, Japan in late June. This would mean that Chinese goods would get new tariffs to the current 250 billion dollars of goods.

Dow Jones index closed down 0,05 % to 26048,51 points, the S&P 500 index closed down 0,03 % to 2885,72 points and Nasdaq ended down 0,01% to 7822,56 points.

In the forex markets, the euro was trading up 0,02 % to 1,13 dollars, while the sterling was down 0,05 % 1,2719 dollars. President Donald Trump´s comments about the interest rates and the Fed´s too tight monetary policy was noticed in the markets during the day. According to Trump, the euro is undervalued about 20 %.

In the tech-side some of the largest US states are trying to stop the megadeal between T-Mobile and Sprint. They warn that the mobile carrier merger would lead to higher consumer prices.

In London the FTSE 100 -index closed up 0,31 % to 7398 points and in Germany the Dax-index was also up, +0,92 % to 12155,81 points. In France, the CAC 40 index closed up 0,48 % to 5408,45 points.

In the Brexit situation, the EU is saying that there will be no new agreement between the parties. According to Sunday Times, the PM candidate Boris Johnson has said that UK should not pay 39 billion pounds settlement if they there is no new deal.

The new UK Prime Minister and the new Conservative Party leaders is announced on July 22. There are 10 candidates for this position. Between 19th-20th July MPs take part in ballots until only 2 candidates remain.

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Stocks markets rally – rate cut & QE possible

The stock markets rallied on Tuesday, when Federal Reserves Chairman Jerome Powell signalled a possible interest rate cut if needed. He was referring to the trade negotiations between the China and US. Also some markets estimates that the ECB, The European Central Bank, would start again the quantitative easing actions from January, lifted the trade worries.

Dow Jones index ended up 2,06 % to 25 332 points, S&P 500 index ended up 2,14 % to 2803 points and the technology-index Nasdaq closed up 2,65 % to 7527 points. According to Bloomberg News, this increase was the biggest since January.

The big banks and the car manufacturers were the leading sectors. The economic slowdown due to the trade tariffs between the China and US has been pushing the stocks downward trend.

The recent IPO-companies were mixed, the Uber (UBER) closed up 3,64 % to 42,53 dollars, while Lyft (LYFT) closed down 0,62 % to 59 dollars. The market speculation which of the new companies would power the better way to autonomous future continued. The electric car manufacturer Tesla (TSLA) closed up 8,17 % to 194,50 dollars.

From the financial markets side, Goldman Sachs (GS) ended up 3,65 % to 190,40 dollars and JP Morgan (JPM) closed up 3,08 % to 109,77 dollars.

The global economic situation was also in the World Bank´s new economic estimate on Tuesday, that the global economy is decreasing next year due to the trade situation. -Global economic growth is forecast to ease to a weaker-than-expected 2.6% in 2019 before inching up to 2.7% in 2020, the World Bank says.

The Dutch banking group ABN Amro said in their review that they expect the European Central Bank to start the quantitative easing program again in January 2020. They expect the buying of bonds start from 70 billion euros next year and that the ECB would need to rise the issuer limit from 33 % to as high as 50 %.

It is expected that this new policy decision will be given to the new ECB president, which is going to be elected during this year as part of the EU top jobs puzzle. Mr Mario Draghi is leaving the central bank during this year. The ECB is having its next Governing Council meeting on Thursday in Vilnius, Lithuania.

In Europe, the stocks ended also up and the FTSE 100 index closed up 0,41 % to 7214 points in London. In Germany the DAX-index closed up 1,51 % to 11971 points and in France the CAC 40 index ended up 0,51 % to 5268 points.

The euro was trading flat at 1,125 dollars and the sterling was up 0,01 % to 1,2699 dollars.

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