Asian markets started the week lower on Monday, driven by continued investor concern on the impact of American tariffs on the global economy. Stocks fell from Tokyo to Sydney, with the steepest drop seen in Hong Kong. Materials, industrial and energy shares underperformed. Shares in Shanghai however outperformed, as China kept its 2018 growth target of around 6.5 percent.
European markets traded slightly higher as investors brushed aside concerns of political uncertainty in Italy as the country’s elections on Sunday yielded no outright winner. The major indexes opened marginally lower before being driven higher by retail stocks with the biggest move coming from Tesco which was up more than 2 percent.
This week brings a busy economic calendar for the US. Much of the early focus will be on any details of the import tariffs President Trump plans to impose. Though the direct effects on the U.S. would be limited, the bigger consequence would be from global repercussions and any retaliatory measures. The February employment report will be keeping a spot in investors’ diaries on Friday along with the January trade deficit report on Wednesday.
The focus in Europe this week is on the ECB meeting on Thursday with only minor tweaks and guidance on current QE policy expected, given the weak round of confidence and inflation data coupled with ongoing market volatility. Meanwhile, Friday awaits the Bank of Japan’s meeting for fresh insights on their QE program, after Governor Kuroda told parliament last week that he could see ending stimulus in the fiscal 2019.
Turning to the corporate calendar, engineering giant Rolls-Royce’s turnaround is back under the investor microscope on Wednesday with the company reporting its full-year earnings, as boss Warren East looks to simplify the business by reducing its current five divisions to just three: civil aerospace, defense and power.
Expectations are high for the first full-year figures at online takeaway giant Just Eat on Tuesday, after being awarded blue-chip status last year following a 180pc share price rally since its IPO in 2014, and Thursday’s results from Aviva will see a focus on updates to the sustainability of capital generation and details on their capital return and redeployment strategy.