Asian-EU shares in red after weekly open

Asian-EU shares in red after weekly open

Chinese companies noted a significant decline in their profits with the worst reading since 2010. This definitely doesn’t point at any acceleration in China and shows that EM could remain pressure for extended time. However, stock markets in Asia seem to have already priced in the factor as they’re noting only a slight decline, which is rather not strictly associated with the released data. Shanghai Composite and Hang Seng Enteprise indices advanced slightly today, seeing an increase by 0,27% and 0,45% respectively.

European stock markets are facing tough start of the week. Major indices are declining by about 1%. In Germany we notice that the automotive companies are declining the most yet again with Volkswagen leading the pack. It seems that although the company named Matthias Mueller as their new CEO, investors are still uncertain how the diesel engines scandal will impact VW’s profits. In London, Glencore is declining by 10%, where company sold part of its business to a Brazilian party for a much lower amount than they had already invested in it.

Bank of Japan governor Haruhiko Kuroda believes that trends in prices growth are both solid and improving as CPI is rising should the energy prices be excluded. He doesn’t see big problems in inflation trends, however the path is going to be monitored and Kuroda won’t hesitate to to adjust policy if necessary.

Over the weekend the regional elections were held in Catalonia. The pro-independence parties won the elections to local parliament parliament, receiving 48% support from the voters. Convergencia and Catalan Republican Left formed an alliance called Esquerra Republicana which won 62 seats in the 135 seated parliament. Spanish Prime Minister Mariano Rajoy has already warned that any separatist referendum is going to be unlawful.

Weaker than expected retail sales and trade balance data from Sweden is a factor for SEK decline. Swedish krona is losing about 0,5% vs. US dollar.

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