Events across the Pond are set to dominate trading today, as US president Donald Trump pumps up the pressure on China, and keeps a keen eye on unemployment levels in the States.
Overnight the Trump administration stepped up its attempts to depress business with Chinese tech companies. The president signed a pair of executive orders prohibiting US residents from doing business with the Chinese-owned TikTok and WeChat apps beginning 45 days from now.
Trump claims the pair are a national security risk of leaving Americans’ personal data exposed to being shared with China’s government. The companies’ deny they share the data.
Trump is also pushing for the sale of TikTok to an American company, and his administration is pushing for US businesses to take the two Chinese apps off their app stores.
The move hit trading in Asian equities overnight, with WeChat’s owner, China’s Tencent Holdings, falling as much as 10% in morning trading.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: “Trump’s growing attack on Chinese tech sent Asian stock indices lower on Friday, as the escalating tensions between the US and China also threatens the trade agreement that the two countries spent two years getting signed.”
Traders will also be closely watching the US non-farm payroll data, due at 1.30pm UK time. Analyst expect the US added 1.65 million non-farm jobs last month, against 4.8 million a month earlier. The unemployment rate is tipped to be slip from 11.1% to 10.5%.
Ozkardeskaya added: “A fairly positive read should keep investors optimistic about the future: a lower-than-expected positive number would enhance the chances of getting the additional fiscal stimulus passed, while a better-than-expected figure would boost the idea of a solid economic recovery.”
In the UK, investors will get a read on the housing market with an earnings update from property site Rightmove and house price data from Halifax. Industry watchers are hoping that a cut in stamp duty announced by Rishi Sunak will have helped boost house sales with the market now reopened after its Covid shutdown. Any evidence that house buyers are looking to sell up in cities and move to the suburbs or countryside will also be closely examined by property developers and agents.
There are also updates from investments specialist Hargreaves Lansdown and broker TP Icap, which should show the impact of choppy markets of late. Stock markets crashed on the Covid outbreak but have surprised many analysts in the strength of their bounceback.
The FTSE 100 is expected to follow Asian markets down, opening off a modest eight points at 5993.