Trade tensions have increased again in the last few days after it was reported that President Trump is keen to increase the tariffs applied to Chinese goods by a further US$200 bn. This would be a serious step in the trade war and China would struggle to retaliate as the US imports are substantially lower than that figure. Market sentiment has fallen with this news and we have seen stock indices begin to fall , the US dollar begin to strengthen and bond yields begin to fall as market fret about lower economic growth.
Stock indices are under pressure with the Dax at 12368 down 85 or 0.68% , the MIB at 20322 down 194 or 0.95% , the CAC at 5412 down 66 or 1.21%. The FTSE is at 7481 down 18 or 0.23%.
In FX we see the EUR at 1.1659 down 7 , the GBP at 1.2995 down 16 , and the JPY is at 110.80 stronger by 22. The DXY is at 94.63 down 5 , Gold is last at 1205.80 up 0.52% and Brent Crude is at 77.15 down 63 with growth concern hurting the price.
Bond yields are mixed with US10 at 2.86% , the GE10 at 0.35% and the UK10 at 1.46% up 0.05.
In economic news we have seen German retail sales numbers out at -0.4% with -0.1% exp , the French CPI out at 0.5% with 0.5% exp , and EUR CPI out at 2.0% y/y with 2.1% exp.