Further trade war pressures impact financial markets

Author: Dennis Li

Financial markets took a hit last night as unconfirmed reports stated President Trump is preparing to impose tariffs on a further USD 200 BIO worth of Chinese goods. Having already imposed tariffs on USD 50 BIO worth, his much earlier threats to impose the same on all of the USD 500 BIO worth of Chinese goods that America imports is now starting to spook the markets with the Dow having its first solid fall in a while and the US dollar and Chinese Yuan losing ground.

The AUD had a moderate fall from its low of yesterday still holding up reasonably well within the same range of recent weeks but 60 points off its high of the last 24 hours.

• US President Trump is prepared to impose tariffs on $200 billion more in Chinese goods as soon as a public comment period ends next week.
• US consumer spending posted an increase of 0.4% in July as expected suggesting strong US economic growth early in Q3.
• Canadian GDP increased solidly by 2.9% in the second quarter, the fastest pace in a year as exports surged while business investment grew slower than expected.
• The Argentine peso lost as much as nearly 20% of its value on Thursday as investors panicked over President Mauricio Macri’s handling of their economic crisis.
• China’s cabinet on Thursday announced new measures to cut corporate tax as policymakers look to support economic growth amid an escalating trade war with the US.