Europe, US markets ease at the start of a key week for China-US trade hopes

European and US stock markets eased yesterday at the start of a key week for China-US trade hopes and ahead of Britain’s general election.The dollar wobbled against its main rivals ahead of the final monetary policy meeting of the Federal Reserve.Meanwhile, sterling drifted higher awaiting Thursday’s UK election that is expected to see Prime Minister Boris Johnson’s Conservatives win a big enough majority to push through his Brexit deal.“In a week to remember it was a session to forget,” said Connor Campbell, analyst at Spreadex trading group, adding that investors were “not unjustified in their reticence to act.”While observers widely expect Beijing and Washington to hammer out a partial tariffs agreement, trading floors remained nervous places with less than a week until a deadline when the US is due to impose fresh levies on Chinese goods.“Though Wednesday has the final Fed statement of the year, it is going to be hard for American investors — and investors in general — to wrench their attentions away from the state of play between the US and China heading into Sunday’s tariff deadline,” said Campbell.“So pressing is that matter that Thursday’s UK general election is more of a local sideshow than the week’s big macro event,” he added.On the corporate front yesterday, shares in Tullow Oil, a London-listed independent oil producer in Africa, plummeted by 71% after the company cut its production forecast, froze dividend payments and its CEO resigned.“It’s never a good look when the dividend is halted, and especially when a company says the process of paying down debt will be slower than expected,” said CMC Markets UK analyst David Madden.Meanwhile, shares in UK supermarket giant Tesco topped the gainers board for London’s blue chip FTSE 100 index, having shot up 4.5% after Britain’s biggest retailer said it was looking at exiting its Thai and Malaysian businesses.Sanofi stock shed 2.0% after the French pharmaceutical giant said it had agreed to buy US biotech firm Synthorx, boosting its immuno-oncology portfolio.In the commodities markets, oil prices retreated on profit-taking after Friday’s healthy gains in reaction to Opec and non-cartel producers led by Russia agreeing to cut output by a further 500,000 barrels a day.Downbeat Chinese trade data over the weekend also gave reason to sell as it reminded traders that slowing growth is why oil producers are cutting output.“The unexpected fall in exports of 1.1% sent out a message the trade spat between the US and China is hurting the global economy,” said David Madden at CMC Markets UK.In London, the FTSE 100 closed down less than 0.1% to 7,233.90 points; Frankfurt — DAX 30 ended down 0.5% to 13,105.61 points and Paris — CAC 40 closed down 0.6% to 5,837.25 points yesterday.