European markets are in the red heading into the close as economic and political uncertainty hang over the markets. 

Europe

The softer than expected Chinse import, CPI and PPI figures overnight highlights how much the economy is cooling. Trade tensions between the US and China are a factor too as well as Brexit.

Interserve shares have slumped after the company announced it is seeking a financial rescue plan. The company warned that investors might lose a substantial portion of their investment. The company has been struggling for a number of years, but it couldn’t manage to turn itself around. Firms only seek a rescue plan when they are circling the drain, and given the similarity with Carillion, investor confidence has been shattered.

Centrica shares are lower this afternoon after a report suggested the firm might find it difficult to maintain its dividend policy. In November, the company confirmed it had lost an additional 370,000 customers at its residential supplying division in the four months to October. The jump in new providers in recent years had ramped up competition, which is great for customers but not so good for shareholders. The shares have been in a downtrend since July, and if the bearish move continues it might target 128p.

NMC Health reiterated its positive outlook. In October the group upped its forecast for this year and next, and today the reaffirmed the positive guidance,

US

The Dow Jones and S&P 500 are in the red as uncertainty persists. Banking stocks are lower as traders no longer believe the Federal Reserve are going to continue hiking interest rates at an aggressive pace in 2019. Banks usually have increase profitability in higher interest rate environments, and now traders are predicting fewer rate hikes for next year, so banks might find it harder to mark money in 2019 and beyond.    

Apple suffered a blow after Qualcomm won a preliminary order from a Chinese court to halt the import of certain iPhones into China.

The JOLTS reading was 7.08 million, which was a below the 7.22 million, but the US labour market is still in rue health.

FX

GBP/USD has sold-off severely due to continued surrounding. Prime Minister May decided not to hold a vote on her withdrawal agreement for fear it would get it had little chance of getting approved. Mrs May had made it clear she doesn’t want a no-deal Brexit, but with the way things are going, we could end up in that scenario. The pound had has fallen to a level not seen April 2017, and that highlights the sour sentiment surrounding sterling.     

EUR/USD is higher today despite some underwhelming economic reports from the eurozone. The German trade balance decreased to €17.3 billion from €17.7 billion. Italian industrial output decreased by 1%, down from 1.4% on the precious month. The region has been going through an economic malaise and these reports underline the bloc is performing.

Commodities

Gold has lost a little ground on the day on account of the slightly firmer US dollar. Gold was lacking direction for a number of months, but recently it has been making a breaking to the upside. If gold’s bullish move continues it could target $1,265.

Oil has turned lower once more as the bullish sentiment from Friday didn’t last long. US-China trade tension and well as sour sentiment in global equity markets has hurt the oil market. Today’s downward move is in keeping with the wider bearish trend since October and it seems like dealers have already forgotten about OPEC production cut.    

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