DJI declined by 1.54% with increased geopolitical issues and fear of increase interest rate in England. Russian parliament proposed a bill on foreign-asset freeze. The court would have the right to go after foreign states' asset in Russia, including property under diplomatic immunity.
Yet it is unlikely that the government of Russia will approve this bill since it will bring diplomatic chaos. It still effects on the market because Ukraine issue recently eased that neither Russia and E.U. proposed additional sanctions on each other. Today's bill suggests that both Russia and E.U. may implement additional sanction which will eventually hurt the economy.
As a result, DAX declined by 1.54% today. Russia is the largest export partner of Germany and manufacturing takes about 22% of its GDP. As geopolitical issues with Russia arises, DAX is easily fluctuated. Besides, German manufacturing PMI declined more than forecast. They signal red light on German economy in Q3.
BOE Governor Mark Caney states today that "with many of the conditions of the economy to normalize now met, the point at which interest rates also begin to normalize is getting closer." As a result, besides with issues from Russia, FTSE declined by 0.99%
Gov. Caney mainly concerns about inflation rate, housing and labor market to determine the "normal" interest rate.
High housing price, below-target CPI and strengthening labor market combined to increase the interest rate sooner. Keep in mind that service industry takes about 79% of U.K. GDP. Sudden increase in interest rate would harm its economy.
Gold increased slightly (0.11%) and Euro still weakens as geopolitical issues arises and ECB would implement QE in a short term.
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