European markets open lower
The FTSE and other European markets have started the day on a lower note.
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Despite a broad recovery in the Asian markets, comments made by President Trump dampened some enthusiasm generated by the impending start of low-level trade negotiations between the US and China. The talks due to start this week come as preparation for higher level discussions later this autumn.
Trump takes aim at Fed chairman
Not for the first time, President Trump criticised the Federal Reserve Chairman Jerome Powell Monday saying he was “not thrilled” with Powell’s approach to interest rates. He took a shot at the bank’s policy of keeping interest rates high, saying it was not good for the country. The greenback slipped after the comments Monday to an intraday low and continued to trade lower early Tuesday, down 0.23% against the pound and 0.27% against the euro.
Although US business leaders are generally supportive of Trump’s approach to business these latest comments were seen as crossing the line and interfering with the independence of the central bank and the markets. They were made only days before a key meeting of central bankers in Jackson Hole on Thursday at which the bankers will discuss the implications of the trade tensions with US trade partners and could potentially hint at their next interest rate policy decision. There is some speculation that if anything, Trump’s comments may prompt the bankers to raise rates again sooner to prove their independence from the US president.
BHP Billiton net profit falls 37%
BHP Billiton led the FTSE fallers this morning with a 1.65% decline after the company reported a drop in full year net profit of of 37%. The lower profit was caused by one-off charges and masks the fact that like for many other miners this has been a very good year for BHP Billiton. The underlying profit rose 33%, allowing the company to pay out a record final dividend as prices for metals and coal rallied this year.
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