SINGAPORE — World markets were mixed Friday as deliberations over more U.S. tariffs on European countries and China weighed on sentiment.
Germany’s DAX added 0.1 percent to 12,693.80 while France’s CAC 40 dropped 0.1 percent at 5,409.22 on Friday. Britain’s FTSE 100 gained 0.2 percent to 7,700.71. U.S. indexes were poised to open slightly lower. S&P 500 futures dipped less than 0.1 percent to 2804.50 and Dow futures shed 0.1 percent to 25,030.00.
Despite a muted start, most Asian markets finished higher. Japan’s Nikkei 225 bucked the regional trend, losing 0.3 percent to 22,697.88. South Korea’s Kospi added 0.3 percent to 2,289.19. Hong Kong’s Hang Seng gained 0.8 percent to 28,224.48. The Shanghai Composite Index rebounded 2.1 percent to 2,829.27. Australia’s S&P-ASX 200 increased 0.4 percent to 6,285.90.
AUTO TARIFFS UNDER FIRE:
The U.S. Commerce Department sought feedback on President Donald Trump’s plans to consider taxing auto imports on Thursday. Critics lined up to urge the administration to reject auto tariffs. They argued that the taxes would raise car prices, squeeze automakers by increasing the cost of imported components and invite retaliation from U.S. trading partners — and allies — like the European Union and Canada. The Alliance of Auto Manufacturers rejected the levies on cars, trucks and auto parts imports, saying its view was shared by over 2,200 comments it had received.
The People’s Bank of China set the Chinese currency’s central parity rate to 0.9 percent weaker against the dollar on Friday. If the yuan continues to depreciate, goods exported to China will become more expensive to consumers there. Chinese exports would also be relatively cheaper, possibly balancing out suggested increases in tariffs by the Trump Administration.
“One theory is that the PBOC is depreciating the yuan because it has not enough ammunition to fight a dollar-for-dollar increase in tariffs. The markets are very risk-off. There is a loss in confidence right now,” said Francis Tan, an economist at UOB Bank.
In an interview with CNBC on Thursday, President Trump said that he was “not happy” about Federal Reserve’s recent interest rate increases. The Fed has raised its benchmark rate for a second time this year and projected two more increases in 2018. Its rate hikes are meant to prevent the economy from overheating but they make borrowing costlier for households and businesses and can weaken the pace of growth.
Trump’s comments caused the greenback to decline slightly. On Friday, the U.S. dollar was trading at 112.43 yen down from 112.46 yen late Thursday. The euro rose to $1.1654 from $1.1644.
Benchmark U.S. crude added 1 cent to $68.25 per barrel in electronic trading on the New York Mercantile Exchange. On Thursday, the contract settled at $68.24 a barrel. Brent crude, used to price international oils, gained 45 cents to at $73.03.