Friday 2nd August: Trump throws markets a shocker with new China tariffs

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Global Markets:

  • Asian Stock Markets : Nikkei down 2.25%, Shanghai Composite down 1.45%, Hang Seng down 2.30%, ASX down 0.39%
  • Commodities : Gold at $1445.05 (+0.88%), Silver at $16.19 (+0.07%), Brent Oil at $61.82 (+2.18%), WTI Oil at $54.91 (+1.78%)
  • Rates : US 10-year yield at 1.891, UK 10-year yield at 0.583, Germany 10-year yield at -0.479

News & Data:

  • (AUD) Retail Sales m/m 0.40% vs 0.30% expected
  • (USD) ISM Manufacturing PMI 51.2 vs 52 expected
  • (GBP) MPC Asset Purchase Facility Votes 0-0-9 vs 0-0-9 expected
  • (GBP) Asset Purchase Facility 435B vs 435B expected
  • (GBP) Official Bank Rate 0.75% vs 0.75% expected
  • (GBP) MPC Official Bank Rate Votes 0-0-9 vs 0-0-9 expected
  • (GBP) Manufacturing PMI 48 vs 47.7 expected
  • Japan Imposes Broad New Trade Restrictions on South Korea
  • US Nonfarm payrolls to steal the show after Fed’s rate cut

Markets Update:

Asian stock markets are in negative territory on Friday while the safe-haven yen strengthened following the overnight losses on Wall Street amid an escalation in the trade dispute between the U.S. and China after President Donald Trump announced plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports. News that the Japanese government has approved removing South Korea from the so-called “white list” of countries entitled to receive preferential treatment in trade also dampened investor sentiment.

In the wake of the unexpected move, mainland Chinese stocks uniformly tumbled. The Shanghai composite fell 1.5%, the Shenzhen component slipped 1.7%. Over in Hong Kong, the Hang Seng index declined 2.3% as shares of Chinese tech giant Tencent dropped 2.9%.

The Nikkei 225 and Topix both fell by 2.3% – with the heightened tensions between Tokyo and Seoul souring local sentiment.In South Korea, the Kospi declined 0.8%. Australia’s S&P/ASX 200 slipped 0.4% despite the country posting its fastest retail sales growth in four months.

The proposed levies on Chinese goods by President Trump triggered a stampede for safe-haven assets, including U.S. bonds, the yen and gold while the Chinese yuan and the Australian dollar hit multi-month lows.

The U.S. dollar index, which tracks the greenback against a basket of its peers, traded at 98.411 after dropping from levels above 98.5 yesterday. The Japanese yen, seen as a safe-haven currency amid global turmoil, saw strong gains against the dollar from the 109.2 handle yesterday. Oil prices bounced back a tad after suffering sharp falls the previous day, the largest plunge in 4 years.

Upcoming Events:

  • 02:30 PM GMT – (CAD) Trade Balance
  • 02:30 PM GMT – (USD) Average Hourly Earnings m/m
  • 02:30 PM GMT – (USD) Non-Farm Employment Change
  • 02:30 PM GMT – (USD) Unemployment Rate
  • 04:00 PM GMT – (USD) Revised UoM Consumer Sentiment
  • &more…


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