Financial market research and analysis

European markets look set to turn lower at the start of trading on Monday. The new US and Chinese tariffs take effect today so traders in Asia and Europe look cautious. Both continents are more exposed to global trade than the US. For markets, the new tariffs might have been acceptable because the economic effects will be felt most over a longer time period. It was the Chinese delegation of trade representatives pulling out of the latest round of talks that have dampened spirits. It’s been a slower start to the week than usual with markets in Japan, China and South Korea all closed.

The real test will be when the Dow Jones opens this afternoon. US stock market bulls will try to push further into record-high territory. It has taken the Dow the best part of eight months to make a record high this year. The risk is that investors who have ridden out eight months of losses in the hopes of getting back to new highs start to book profits.

The major data event today will be German IFO figures for September. The opinion of German investors about the current business climate continues to be damaged by the trade war. Though, with Europe out of the picture in the dispute for now, and signs of a short-term base in the DAX, sentiment may be due some recovery heading into Q4.

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