European Equity Markets
Euro Stoxx 600 index closed 0.5% higher on Tuesday. Oil and gas stocks gained the most boosted by commodity prices trading higher. The industrials and technology sectors also both ended trade above 1%. Rating upgrades helped European shares, with Airbus, Atos and Hugo Boss all rising higher after positive research notes from investment banks.
US Equity Markets
The S&P 500 traded higher on Tuesday as strong results from PepsiCo boosted earnings season. The consumer staples index climbed 1.3% and provided the biggest lift to the S&P 500, driven by PepsiCo, which gained 4.8%, while Procter & Gamble rose 2.5% and Coca-Cola was up 1.3%. The Nasdaq Composite added 0.04%, to 7,759.20. The S&P 500 gained 0.35%, to 2,793.84.
Asian Equity Markets
Major Asian markets fell following the release of a list of an additional $200 billion in Chinese goods on which the U.S. is considering imposing tariffs. China markets fell on the back of the news, with the Shanghai composite falling 2.31%. Japan’s Nikkei 225 fell 1.74%, with losses steepening through the day as trade-sensitive stocks, such as automakers, mostly fell.
The Australian dollar fell after the U.S. said it would impose tariffs on an extra $200 billion of imports from China, sharply escalating tensions between the world’s two biggest economies. The news threw U.S.-China trade war worries back into the spotlight just days after Washington imposed 25% tariffs on $34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of U.S. exports to China.
Oil prices fell on Wednesday after U.S. President Donald Trump threatened to levy new trade tariffs on China. Brent crude futures were down 75 cents at $78.11 a barrel. U.S. crude was down 55 cents at $73.56. The specter of tariffs on a further $200 billion worth of Chinese goods sent commodities lower along with stock markets, with trade tensions between the world’s two biggest economies intensifying.
Shorter-dated yield Treasuries hit session highs following a weak auction of 3-year notes that left the yield curve at its flattest in over a decade. The auction for $33 billion in 3-year notes in the afternoon had the lowest bid-to-cover ratio since April 2009, and primary dealers took more than half of the 3-year supply. An auction of $22 billion in 10-year notes is scheduled for Wednesday and $14 billion in 30-year bonds will be offered on Thursday. Benchmark U.S 10-year notes yielded 2.871%, up from 2.860 percent late Monday.