U.S. has sent its proposals to the WTO, saying the EU had provided $11 billion worth subsidies to Airbus
Asia had managed an 8-month high overnight but Europe was left flat after the office of the U.S. Trade Representative sent its proposals to the World Trade Organisation, saying the EU had provided $11 billion worth subsidies to Airbus.
The planemaker’ shares dropped as much as 2.5 percent in early deals. Many of its key suppliers lost between 0.7 percent and 1.2 percent, though it could have been worse and most of Europe’s big bourses pulled back to level.
Aberdeen Standard Investment’s head of global multi-asset strategy, Andrew Milligan, said signals like this just remind people… that the strategic rivalry between the U.S. and other countries is serious and is not going to go away.
The day’s other focus was set to be the International Monetary Fund’s half-yearly forecasts, which are likely to reinforce the message that trade spats are contributing to slowing the global economy.
The Fund is expected to make quite a sizable cut to its growth number and Germany’s benchmark 10-year bond yield stayed just below zero percent on bets interest rates are set to stay extremely low globally.
In the FX market, Sterling nudged higher as UK Prime Minister Theresa May prepared to meet Germany’s Angela Merkel and France’s Emmanuel Macron to ask for another Brexit delay.
The Australian and Canadian dollars and Norwegian crown and Russian rouble also rose as a surge in oil prices to five-month highs lifted most other commodity-linked currencies too.
Brent, the global benchmark, rose as high as $71.34 a barrel, the highest since November, and by 0850 GMT was up 14 cents at $71.24. U.S. WTI crude also hit a November 2018 high of $64.77 and was up 22 cents at $64.62.
Oil prices – up more than 40 percent this year – have jumped on expectations that global supplies will tighten due to fighting in Libya, OPEC-led cuts and U.S. sanctions against Iran and Venezuela.
Concerns over the potential squeezing of supply in Libya following the escalation of violence there are adding fresh impetus, analysts at JBC Energy wrote.