Global Shares ambivalent

By YURI KAGEYAMA, AP Business Writer

European share benchmarks drifted lower in early trading Tuesday as Germany’s president prepared to meet with party leaders hoping to broker a new government. The weakness in Europe followed an upbeat day in Asia, where Hong Kong’s Hang Seng index had its biggest gain in nearly two months.

KEEPING SCORE: France’s CAC 40 slipped 0.1 percent to 5,335.32 in early trading, while Germany’s DAX was down 0.1 percent at 13,044.78. Britain’s FTSE 100 lost 0.1 percent to 7,380.53. U.S. shares were set to drift lower with Dow futures down less than 0.1 percent at 23,386. S&P 500 futures lost 0.1 percent to 2,580.40.

GERMANY: German President Frank-Walter Steinmeier was to meet with party leaders after talks to form a new government between Chancellor Angela Merkel’s conservative bloc the left-leaning Greens and pro-business Free Democrats broke down earlier this week. Barring a compromise, a minority government or new elections are the only options.

NORTH KOREA: Nervousness about North Korea did little to cloud investor sentiment in Asia, instead lifting defense-related stocks in Japan. President Donald Trump put North Korea on America’s terrorism blacklist, despite questions about Pyongyang’s support for international attacks beyond the assassination of its leader’s half brother in February. IHI Corp. surged 1.5 percent, while Mitsubishi Heavy Industries edged up 0.5 percent.

ANALYST VIEWPOINT: The standoff in Germany is “undoubtedly a blow for Merkel but highlights the vast difference of interparty opinions surrounding migration and energy policies,” Stephen Innes of OANDA said in a commentary. “Keep in mind; liquidity is exceptionally thin and could exaggerate moves. But this knee-jerk reaction does look a bit overdone as Merkel can still establish a minority government with either the FDP or Green Party,” he said.

Associated Press

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes