Before closing up for the day, let’s take another look at European markets. Losses have escalated since the US confirmed a 25% tariff would be imposed on $50bn of Chinese imports.
- FTSE 100: -1.1% at 7,682
- Germany’s DAX: -0.7% at 13,021
- France’s CAC: -0.2% at 5,518
- Italy’s FTSE MIB: -1% at 22,272
- Spain’s IBEX: -1.2% at 9,837
- Europe’s STOXX 600: -0.7% at 390
Our full story on the US trade tariffs will be updated here:
That’s all for today. Thank you for reading the blog and for all your comments. Have a great weekend and please join us again on Monday.
Wall Street opens lower
The bell has gone on Wall Street and US markets are down:
- Dow Jones: -0.5% at 25,047
- S&P 500: -0.3% at 2,774
- Nasdaq: -0.4% at 7,727
China responds to US trade tariffs
It hasn’t taken Beijing long to respond to Trump’s decision to impose a 25% tariff on $50bn of Chinese imports. As expected, it plans to retaliate.
China’s commerce department has issued a statement:
China is unwilling to have a trade war, but the Chinese side has no choice but to strongly oppose this, due to the United States’ myopic behaviour that will harm both parties.
We will immediately introduce tariff measures of the same scale and strength. All the results from the previously reached by the two parties will be invalid.
Updated
Wall Street to open lower as trade spat with China intensifies
US investors are feeling nervous after President Trump announced plans to slap a 25% tariff on $50bn of Chinese imports.
China has promised to retaliate in equal measure, raising the prospect of a full-blown trade war between the world’s two largest economies, and that is weighing on sentiment.
Peter Cardillo, economist at Spartan Capital Securities in New York:
It has gotten investors nervous. It’s going to probably mean a cautious and bumpy ride for the stock markets.
US futures are all trading lower. The opening bell rings in less than 10 minutes.
Speaking on Fox News, President Trump said that he regarded China’s President Xi Jinping as a friend, but it was time to take action to reduce America’s trade deficit.
Look, he’s my friend. He’s a wonderful guy, he’s a great guy. But at some point we have to straighten it out.
President Trump: China started the trade war years ago
President Trump has just made his way down to the Fox News base outside the White House for an unscheduled interview.
Among the various subjects covered are the “very big tariffs” the US will impose on $50bn of Chinese exports.
Trump said:
The trade war was started many years ago by them and the United States lost
.@POTUS: "We're just announcing very big tariffs today on China." pic.twitter.com/7dbLvrmTKm
— Fox News (@FoxNews) June 15, 2018
Trump confirms tariffs on $50bn of Chinese imports
It’s official. Donald Trump has given the green light to a 25% tariff on $50bn of goods imported from China.
The tariffs will apply to a total of 1,102 products and will be divided into two parts, the White House has confirmed.
The first set of tariffs will apply to $34bn of Chinese imports, on 818 product lines, effective from 6 July.
The second set will apply to $16bn of imports, on 284 product lines.
More soon.
Updated
Outrage as government delays curbs on fixed-odds betting terminals
The government’s decision to cut the maximum stake on fixed-odds betting terminals (FOBTs) from £100 to £2 will not take effect until 2020, it has emerged.
Tom Watson, deputy leader of the Labour Party and shadow culture secretary, said the government was “pathetic” after bookmakers persuaded the government to delay the introduction of the new rules.
He added:
Capitulating to a two-year delay is a pathetic move from a fundamentally weak government. Those who praised the government when the announcement was made will feel badly let down.
They are already rolling back on their promises and allowing these machines to ruin more lives.
Gamblers stand to lose an extra £4bn in the intervening period, based on the average £1.8bn a year in revenues taken by the machines, which critics say are highly addictive and allow huge losses to rack up quickly.
Read our full story here:
The state of this government. It’s pathetic. https://t.co/TjEuSKS3ce
— Tom Watson (@tom_watson) June 15, 2018
Updated
Craig Erlam at currency firm Oanda, says the prospect of “Trump’s tariffs” are causing a market wobble.
It’s been a relatively mixed start to trading in Europe on Friday and the US is on course to post small losses at the open, as the focus shifts from central banks back to trade.
US President Donald Trump is expected to announce tariffs on $50 billion of Chinese imports today that will once again stoke fears of a trade war and protectionist policies and likely trigger a response from the world’s second largest economy.
Trump has been picking fights with a number of countries on trade in an attempt to address the large deficit the US runs and China is clearly his primary target.
Markets will always be vulnerable to trade spats between countries and while the response to the G7 meeting may have been quite muted, that is more likely a sign that such an outcome was in line with expectations than markets becoming less sensitive to it.
The biggest concern here is naturally that this will continue to escalate and more and more counter-tariffs will be imposed, something that will harm all economies and weigh on investor sentiment.
Markets falter ahead of Trump's trade plan
Investors across Europe are feeling less chirpy as they await confirmation of Trump’s plan to impose tariffs on $50bn of Chinese imports.
France is bucking the trend:
- FTSE 100: -0.8% at 7,707
- Germany’s DAX: -0.1% at 13,098
- France’s CAC: +0.2% at 5,541
- Italy’s FTSE MIB: -1.1% at 22,249
- Spain’s IBEX: -1.1% at 9,844
- Europe’s STOXX 600: -0.3% at 392
Eurozone inflation climbs to 1.9% in May
Eurozone inflation jumped to 1.9% in May from 1.3% in April, Eurostat confirmed in its final estimate.
The figures appear to add weight to the ECB’s latest inflation forecasts, which were revised up on Thursday, to 1.7% in both 2018 and 2019, from 1.4% previously.
Here is how May annual inflation rates compare across the EU:
China’s foreign ministry has said this morning that Beijing will respond swiftly to any US tariffs, as Donald Trump prepares to unveil revisions to his initial tariff list targeting $50 billion of Chinese goods.
The Latest: China says it will retaliate against any move by the U.S. to impose punishing tariffs on tens of billions of dollars of Chinese goods. https://t.co/angLjVZstG
— The Associated Press (@AP) June 15, 2018
Euro on course for worst week since 2016 after ECB delays rate hike
The euro is heading for its biggest weekly loss in 19 months after Mario Draghi, president of the ECB, said there would be no rate hike in the eurozone until after the summer of 2019.
The currency is up 0.2% against the dollar at $1.1591, but on track for the worst week since November 2016.
WorldFirst Morning Update June 15th - Euro collapses as rate hikes ruled out for over a yearhttps://t.co/1dkF8V8zHn
— WorldFirst (@World_First) June 15, 2018
McDonald's to ditch plastic straws
McDonald’s is the latest company to ditch plastic straws, with plans to them with the paper version in all its UK and Ireland restaurants from September.
The fast food giant currently uses 1.8 million straws a day in the UK, and said it was responding to what customers wanted by moving away from the single-use plastic straw.
Companies are under mounting pressure to find alternatives to single use plastic products that are polluting the oceans and harming wildlife.
Paul Pomroy, chief executive of McDonald’s UK and Ireland, said:
Reflecting the broader public debate, our customers told us they wanted to see a move on straws but to do so without compromising their overall experience when visiting our restaurants.
Over the past few months we’ve been working closely with supplier partners to find a solution that works both for our customers, and that the supply is there given the size of our business.
The government’s ambitious plans, combined with strong customer opinion, has helped to accelerate the move away from plastic and I’m proud that we’ve been able to play our part in helping to achieve this societal change.
Updated
Laith Khalaf, senior analyst at Hargreaves Lansdown, says Tesco had managed to shrug off the malaise facing the wider retail sector:
Tesco had a confident start to the year, despite the Beast from the East, and maintained its sales momentum into a tenth consecutive quarter.
The recently acquired Booker business flaunted a sparking performance in the first few months of the year, and is already looking like a nice little growth engine for Tesco.
Booker is now benefiting from the Tesco distribution network, a good example of how [chief executive] Dave Lewis intends to wring £200 million of annual synergies out of combining the two businesses.
Tesco is one of the FTSE 100’s top performer this morning, at a near four-year high of 255p.
Tesco shares at near four-year high after sales rise
Tesco shares are up 2% this morning at a near four-year high of 255p.
Investors have been cheered by the news that sales at the UK’s biggest supermarket rose for a 10th consecutive quarter in the 13 weeks to 26 May (Tesco’s first quarter).
Sales at stores open for more than a year rose 1.8%, as trading improved after the snow disruption of the beginning of the period.
Tesco completed the £4bn takeover of Booker, the UK’s largest wholesaler, in March.
Dave Lewis, Tesco’s chief executive, gave his assessment:
Our growth plans are on track and we are pleased with the momentum in the business. We remain well-placed to serve our customers better and deliver on our medium-term financial ambitions.
We are delighted with initial progress on Booker, and are focused on delivering the synergy benefits that our merger brings.
European markets mixed after ECB phases out stimulus
Trading is underway in Europe and it’s a mixed picture so far.
Markets were boosted on Thursday by the European Central Bank’s revelation that it would phase out its bond-buying programme by the end of this year. Investors continue to digest the move - which came earlier than expected - this morning.
As it stands, European shares are on course for their best week in more than three months.
Here are the latest scores:
- FTSE 100: +0.1% at 7,771
- Germany’s DAX: 0.3% at 13,142
- France’s CAC: +0.4% at 5,551
- Italy’s FTSE MIB: -0.3% at 22,416
- Spain’s IBEX: -0.2% at 9,936
- Europe’s STOXX 600: +0.2% at 394
Updated
The agenda: US-China trade tensions escalate, Tesco sales rise
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The prospect of a trade world between the world’s two largest economies is back in the spotlight as Donald Trump is expected to say today that he will press ahead with tariffs on $50bn of Chinese imports.
Trump gave the green light at a meeting of his top trade advisors on Thursday.
Reuters reports:
Trump is due to unveil revisions to his initial tariff list targeting $50 billion of Chinese goods on Friday. The list will contain 800 product categories, down from 1,300 previously.
Trump no longer believes that Beijing’s influence over North Korea is a compelling reason to ease up on trade talks now that his administration has opened up a direct line of communication with the nuclear-armed country, [an] administration official said.
Beijing has reiterated that it will respond “appropriately” to any measures imposed by the US.
Also coming up
Tesco has reported a 1oth consecutive quarter of rising sales, despite snow disruption at the beginning of the period and a gloomy consumer backdrop. More on that soon.
Tesco 1Q trading statement: Positive like-for-like sales growth for a tenth consecutive quarter – Group like-for-like sales improved to 1.8%.https://t.co/1BucnREEj3
— Tesco News (@tesconews) June 15, 2018
The agenda
- 10am BST: eurozone inflation data for May
- 1.30pm BST: June’s Empire State manufacturing survey in the US
- 2.15pm BST: US industrial production figures for May
