After the US Department of Commerce put Huawei on a "black list", chip manufacturers such as Infineon (-4.8%), ASML (-6.3%), AMS (-13.4%) and STMicroelectronics (-9.1%) were among the biggest losers at the start of the week, each with discounts of a good four percent. Due to the verdict of the US government, Huawei is now prohibited from doing business with US companies. As a result, the Google parent company Alphabet is said to have discontinued parts of its business relations with the Chinese network supplier. Huawei will thus be cut off from important Google technologies with its smartphones. Due to the US sanctions, Huawei will no longer be able to sell future models with pre-installed Google services, which is likely to make the products less attractive.
On the international capital markets, the trade dispute remains the focus of interest. After focusing mainly on the conflict between the US and China in the past, trade relations between the US and Europe are likely to become more and more central. Although the temporary postponement of a Washington decision on possible punitive tariffs against European carmakers has eased some of the pressure, relations remain strained and uncertainty for investors remains high. Meanwhile, a new survey conducted by the EU Chamber of Commerce in Beijing among its members shows that more than one in three European companies operating in China is already experiencing negative consequences from the punitive tariffs imposed.
Oil prices recovered at the start of the week after US President Donald Trump adopted a much more aggressive tone towards Iran. Trump made an unmistakable threat following a missile attack in Baghdad near the US embassy. Meanwhile, a senior Iranian military made it clear that Iran did not want war. In addition to the tense situation in Iran, indications of an extension of OPEC production cuts until the end of 2019 supported the oil price. A total reduction of 1.2 million barrels per day was decided last December and will expire in June.
|11:00||Global||OECD World Economic Outlook|
|16:00||US||Existing Home Sales (y/y, in percent)||-4.90|
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Source: LGT Bank (Switzerland) Ltd.
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