Trump tariff hike threat weighs on markets - 7.5.2019

Dollar recovers part of Friday loss

US stock market gave back some of Friday gains on Monday on renewed concerns of possible negative impact of prolonged US-China trade dispute after President Trump threatened to hike tariffs on $200 billion of imports from China to 25% from 10%. The S&P 500 lost 0.5% to 2932.47. Dow Jones industrial slipped 0.3% to 26438.48. The Nasdaq composite slid 0.5% to 8123.29. The dollar weakening reversed:. the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.1% to 97.547 but is lower currently. Futures point to lower openings for indexes today.

DJI falls to MA(50) 05/07/2019 Market Overview IFC Markets chart

CAC 40 underperforms other European indexes

European stocks slumped on Monday after surprise Sunday tweet by President Trump threatening to raise tariffs on imports from China. Both GBP/USD and EUR/USD turned lower but are rising currently. The Stoxx Europe 600 index declined 0.9% led by auto maker shares. The DAX 30 lost 1% to 12286.88. France’s CAC 40 tumbled 1.2%. London stock exchange was closed for a holiday.

Shanghai Composite leads Asian indexes gains

Asian stock indices are mixed today. Nikkei closed 1.5% lower at 21923.72 despite renewed yen slide against the dollar. Markets in China are recovering after news China is still expected to send a delegation to Washington this week for talks starting Thursday — a day later than originally planned: the Shanghai Composite Index is up 0.8% and Hong Kong’s Hang Seng Index is 0.5% higher. Australia’s All Ordinaries Index recovered 0.2% despite Australian dollar resumed climb against the greenback as the Reserve Bank of Australia left interest rates unchanged at 1.5% when some expected a rate cut given recent poor performance of Australian economy.

Brent down

Brent futures prices are edging lower today. Prices recovered yesterday as Middle East tensions rose on news US sent bombers and a carrier group to the region over the weekend: July Brent crude rose 0.6% to $71.24 a barrel on Monday.