Markets panic as Trump threatens new tariffs on China…
Monday’s trading session initially saw widespread panic across financial markets following some stern tweets from President Trump on Sunday.
The President indicated he would be raising current tariffs from 10% to 25% on Friday due to slow progress in the existing trade talks. Financial markets took the tweets badly with many global indices opening up 2% lower with China down nearly 6%. The greenback saw a strong safe-haven bid with the GBPUSD rate falling 0.75 cent across Monday trade. Markets regained some of their composure by close of play but still remain cautious.
Overnight, the Reserve Bank of Australia held interest rates steady at 1.5%. The central bank has been in focus of late due to its increasingly dovish tone. However, today was not the day they decided to act on their new stance. The central bank held a mildly positive tone in the accompanying statement which has allowed the Aussie dollar to claw back some of its recent losses. It currently trades up c. 0.4% against the pound.
Today’s trading calendar is rather light. We’ll see German factory orders and industrial production out this morning. Additionally, from the UK, 2 Bank of England MPC members will offer speeches (Haldane & Cunliffe). From the US, job openings data will be the highlight, released in the afternoon session.
Written by Viv Savani. 8:23am, May 7th 2019
The details expressed in this market report are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Cornhill International Payments limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.