European equity markets are under pressure after China revealed a fresh round of tariffs on 106 US products. 

It would appear that gloves are off in relation to the trade war between the two largest economies in the world. Dealers will be half expecting a retaliation from President Trump, and the exodus from equities is likely to continue. 

Shares in WPP are lower today after the CEO Sir Martin Sorrell stated the company is investigating a claim of alleged ‘financial impropriety’ against himself. Mr Sorrell ‘unreservedly’ rejects the allegations made against him, but understands the company needs to conduct the investigation, which is expected to be short lived. The share price is down 1.1%.

Topps Tiles shares are in the red this morning after the company stated market conditions are more challenging. Revenue for the first half rose slightly, but the second quarter was weaker than the first quarter. Poor weather was partly to blame for the softer second-quarter performance, but it was the downbeat outlook that sent the stock lower.

At 1.15pm (UK time) the US will reveal the latest ADP employment report, and the consensus is for a reading of 205,000 compared with the previous reading of 235,000.

GBP/USD slipped after the UK revealed disappointing construction figures. The reading in March was 47 – it’s lowest since August 2016. The share contraction in the construction industry is concerning as it compounds fears about an over-heated housing market. 

EUR/USD continued to creep higher after the eurozone revealed a tick up in inflation. The headline CPI number jumped to 1.4% from 1.2%, and the core inflation figure jumped to 1.3% from 1%. The impressive jump in the core reading points to a genuine increase in demand. 

We are expecting the Dow Jones to open down 453 points at 2,580 and we are calling the S&P 500 down 39 points at 2575.

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