The Trade war has gone live overnight with both the US and China placing tariffs on each others imports to the value of US$34 bn. Investors are mainly worried about an escalation because Trump has threatened China with up to US$500bn , and China has said that it will not lead but it will react to anything that the US does. China and Europe have also threatened to take the US to the WTO. Europe has been focused on the tariffs on car imports to the US and maybe this can be sorted by reducing the European tariffs on the US cars. Stock indices in Europe were higher last night due to the improved auto sector.
US payroll numbers are due out tonight and markets will wait to see if the numbers suggest any change in US monetary policy. Latest prices show the FTSE at 7591 down 0.37% , the DAX at 12470 down 0.14% , the CAC at 5370 flat , and the MIB at 21910 up 0.12%. The EUR is last at 1.1707 up 0.13% , the GBP is last at 1.3225 up 0.05% and the JPY is at 110.65 flat. The DXY is last at 94.06 down 0.18%. Gold last at 1254.05 down 0.27% and Brent Crude lower at 76.89 down 0.65% after an increase in US stockpiles last night.
Expectations for US payrolls is an increase in 195k jobs (+223k last month) and an unemployment rate of 3.8% (3.8% last month)