The equity markets had another bad day on Friday as trade tensions continued to exert pressure across the board and that theme looks set to extend into the start of this week’s trading. The S&P 500 finished the week down nearly 6% which was it’s biggest fall in over 2 years and traders are continuing to look to the safe haven products with the Jpy in particular having a very strong finish to the week both against the dollar and on the crosses. Futures pricing is showing that the Asian markets will open the day in the red and this will continue to push the ‘risk off’ trade sentiment as we move through the day.
Trade tariffs of up to $50 bio on China from the US had started this move towards the end of last week as the market feared the escalation to a trade war, but there does appear to be a bit of light at the end of the tunnel with US Treasury Secretary Steven Mnuchin saying that he’s optimistic that the US can reach an agreement with China before the imposition of these tariffs. If we do start to hear more favourable news from the US administration and indeed from the Chinese side over the next few trading sessions, then we may see a sharp reversal of the recent moves in the market.
Looking ahead today’s trading day and it is very quiet in terms of economic fundamental data releases today and so traders will be keeping a very close eye on the news wires for any change in the current sentiment.
