After China announced on August 23 that it would impose additional customs duties on products worth US $ 75 billion from the US, Wall Street saw a sharp decline with Trump’s 5% surcharge on the US $ 550 billion worth of products imported from China. However, in the past week, US indices have risen on the back of Trump’s constructive comments on the China-US trade dispute. The fact that the opposition will work for the agreed separation in the UK also supported the risk appetite.
The gold, which has been testing the highest level since April 2013 earlier this week, gave a temporary signal that risk aversion declined for the remainder of the week, but the reversal of the US Treasury bond yield curve showed some investors still concerned about economic growth.
The two-year trade dispute between the US and China has been increasingly damaging the global economy, forcing policy makers to respond with interest rate cuts and new support measures to stimulate economic growth. China, the world’s second largest economy, but whose growth rate has declined, has announced possible measures to boost consumption, including lifting restrictions on car purchases.
Euro zone inflation was announced at 1%, well below the ECB’s expectation of 2%. Inflation, which remained weak, supported the prospects for a new monetary expansion. Inflation data and the end of the month with the effect of the euro / USD parity fell to 1.0961 on Friday.
LME copper, which has been trying to rise in parallel with the global stock markets, has been under the pressure of the strong dollar as the signs that the US-China trade tension may calm down for now support the investor confidence.
Oil prices rose following a report that US crude oil inventories fell above expectations.
US markets were closed on the first trading day of September. In the morning, China’s manufacturing indices closed the premium yesterday with the support of the release of manufacturing PMI at 50.4, above expectations.
As Brexit’s history is approaching, Parliament will try to enact legislation to prevent an unreasonable Brexit, and the deadline will be extended once again until the end of January. The European stock markets had a generally bearish course yesterday.
With the introduction of the additional tax on Chinese products as of September 1, the tension of trade wars continues to increase. Trump ABDs decision, the United States, imported from China, including shoes, smart watches and television, including $ 125 billion worth of various products yesterday began to charge additional 15% customs duties. China imposed new customs duties on certain products, including crude US oil. Trump says the two sides could meet later this month, but tensions show no signs of appeasement. China has filed a lawsuit with the World Trade Organization against the US because of the customs duties it imposed.
Asian markets closed down this morning due to US-Chinese trade tensions.
The pound has tested the lowest level since October 2016, with 1.1957 this morning as British Prime Minister Jonhson warned parliamentarians that he would go to an election if he tied his hand on Brexit.
The euro fell to its lowest level since May 2017 at 1.0924 this morning, with weak economic data from the EU highlighting expectations that ECB will loosen its monetary policy at its next week’s meeting.
The dollar index is trading at 99.291 with a 0.38% premium, due to the depreciation of the euro and the pound.
The LME tested the lowest level since May 2017 at $ 5518 today, under pressure from the strong dollar, as well as concerns that copper trade tensions weaken global demand. The $ 5550 continues to be traded around psychological support.
The week will be intense in terms of macro data releases. US ISM, ADP on Thursday and non-farm payrolls will be released on Friday. The market is also expected to hold ECB on 12 September and FOMC meetings to end on 18 September.