European markets are attempting to break from the negative spiral that has been evident so far this week, with the outcry caused by Donald Trump’s travel ban causing widespread selling throughout global markets. Despite the obvious moral impact the travel ban has had, the impact to the majority of businesses is likely to be minimal, providing a great buying opportunity.
The response to Trump’s ban has been a classic risk-off move, with the likes of Treasuries, gold and the yen gaining ground at the detriment of the dollar and riskier assets. However, bear in mind that this is a big week from an economic front and with February bringing with it some big hitting economic releases, there is a good chance that market sentiment will not be driven by this topic for much longer.
Deutsche Bank has been hit by fines from both sides of the pond this week, with both UK and US regulators fining the firm a total of £500m after a money laundering probe in relation to the bank’s DB Russia arm. Coming off the back of an agreement to pay the US Department of Justice a $7.2bn penalty in relation to a series of mortgage related failings, there is no doubt that the firm is in need of reform and better oversight.
Regardless of how the bank fares, it will always be difficult to gain any ground in an environment where such losses are so commonplace.
Ahead of the open we expect the Dow Jones to open 35 points lower, at 19,936.