Monday, August 6: European markets opened both mixed and muted this morning, following mixed Asia trade to kick the week off in which Japan’s Nikkei -0.1% and the Hang Seng climbed 0.55%. Markets had another decent raft of earnings on Wall Street from Friday, further trade tensions and political uncertainty in the UK to contend with as we begun the week. The latter caused the pound to fall versus major currencies, dropping below $1.30 versus the dollar and teetering on going below the €1.12 mark against the euro. Usually a weaker pound can help domestic bourses due to the international earnings on the FTSE but given the fundamentals the FTSE mirrored the pound’s movements, albeit by very little in the A.M. before eventually closing 0.06% higher.

There was little in the way of earnings to direct London indices, with HSBC practically the only major company reporting for their first half period. The update saw pre-tax profit rise 4.8% despite rising costs from investments in staffing and digital capabilities. They have also reiterated ambitious growth plans despite the increased likelihood of a no-deal exit for the UK and rising US and China trade tensions. HSBC is Europe’s largest bank and HQ’d in London which makes Brexit developments particularly threatening, but the Asian market is their most important, with 88% of pre-tax profit coming from the region. The optimism wasn’t enough to convince investors about the impending hurdles due to the fact their key market going forward is on the front-line against Trump’s tariffs. Shares lost 1% on the day.

In other companies news, albeit specific to the US, the CEO of PepsiCo Inc. Indra Nooyi has announced she will step down after 12 years at the helm to be replaced by company veteran Ramon Laguarta (Only the sixth CEO in the company’s 53-year history). The new CEO is expected to lead the company into a new era with more focus on snacks as soda markets decline. Britvic hold all the PepsiCo licences in the UK but the personnel change is unlikely to have any impact on their operations at the moment. PepsiCo shares climbed around 1.2% on the news. As we write Wall Street has also had a cautious open as shares just edge into positive territory, the story of the day very much being underlying caution among investors.