Europe open: Stocks slip amid more earnings; Trump criticises Fed
European stocks were a little weaker in early trade on Friday as investors sifted through more corporate news and mulled over US President Trump's criticism of the Federal Reserve.
At 1030 BST, the benchmark Stoxx Europe 600 index and Germany's DAX were down 0.1% to 385.91 and 12,672.45, respectively, while France's CAC 40 was off 0.2% to 5,407.67.
In an interview with CNBC, Trump said he was unhappy about rising interest rates.
"I’m not thrilled," Trump said. "Because we go up and every time you go up they want to raise rates again ..I am not happy about it. But at the same time I’m letting them do what they feel is best.
"I don’t like all of this work that we’re putting into the economy and then I see rates going up."
Neil Wilson, chief market analyst at Markets.com, said: "The comments in the interview may well worry Fed watchers and policymakers given the implicit meddling in their affairs. It may be that someone has just explained yield curve inversion and recession risk to him, but really you cannot help feel this is less about criticising the Federal Reserve for monetary policy decisions and more about attempting to cool the dollar’s ascent. In Jay Powell, his pick is in the Fed chair and the pace of tightening has been no quicker than markets have been broadly anticipating this year.
"A clear pattern is emerging - Donald Trump wants a weaker dollar. Prior to his inauguration he said the dollar was ‘too strong’. Then earlier this year Treasury secretary Mnuchin echoed those comments when he openly questioned the strong dollar policy. The Mnuchin effect lasted until the middle of April, but since then the dollar has been on the rise again, with the dollar index hitting 95, a level not seen since November last year. When you look at the trade policies he’s pursuing, a weaker dollar makes sense. The only problem is that an all-out trade war, by making dollars scarcer, will force up the greenback against its peers."
In corporate news, Stora Enso tumbled after the Finnish pulp and paper manufacturer said second-quarter net profit rose 49% to €213m.
Hermes was in focus after the luxury handbag maker said it expects first-half operating profit to remain near the record levels of last year and posted a 7.2% jump in second-quarter sales.
Steelmaker SSAB fell after its second-quarter earnings missed analysts' expectations, but Remy Cointreau gained ground after posting a rise in first-quarter sales despite unfavourable currency movements.
France's Thales was on the rise after the defence electronics group reported an increase in first-half profits and said its planned takeover of Gemalto was on track.
On the data front, figures from the European Central Bank showed the seasonally-adjusted current account surplus in the eurozone fell to €22.4bn in May from a revised €29.6bn the month before.
Pantheon Macroeconomics analyst Claus Vistesen pointed out that a big decline in the primary income surplus - to €3.0bn from €9.0bn in April - was the main driver of the headline decline in May.
"Elsewhere, the movements were marginal. The goods and services surpluses fell trivially, while the secondary income deficit- mainly foreign aid and workers’ remittances - narrowed slightly. In the 12-month ending May, the overall surplus stood at 3.6% of GDP, 0.4 percentage points higher than in the same period last year," Vistesen said.