Oops, He Did It Again!
Jeroen Blokland | Aug 05, 2019 07:01
Trade talks between China and the US are scheduled to resume later this month, but that didn’t prevent President Trump from announcing a 10% tariff on a further USD 300 billion in Chinese imports, effective 1 September. Equities fell and US Treasury yields collapsed.
Theoretically, the latest round of tariffs could be skipped if trade talks go well, but that seems highly unlikely. Especially since Trump later added that tariffs could go well beyond 25%. In any case, the latest escalation in the trade dispute is negative for risky assets and equity markets. Doubts about future global growth will increase and the expected recovery in the second half of the year will be tested. We have reduced our exposure to equity markets, as China has vowed to take countermeasures. So while the odds of more Fed rate cuts have increased, it’s likely to be a bumpy road until we get there.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.