Market moves are still being dominated by the global trade situation with equities taking a big hit yesterday after President Trump advised that he is planning further moves to restrict Chinese Investment in US tech firms. The move started in Asia and seemed to snowball into the European and US sessions with the Nasdaq notably finishing the day over 2% down and many Euro bourses even harder hit. We did get a relief rally of sorts after both Mnuchin and Navarro tried to calm the waters, the former advising that it’s not a China specific plan and the later that there’s been a misunderstanding of the President’s trade policy. At present the market isn’t buying what they’re selling and the Asian stock markets are set to open firmly in the red.
It does feel like the continued uncertainty will open the way for harder and faster moves to the downside. We are lacking clarity from the US administration and whereas just a few weeks ago it seemed hard to dent overall market optimism it now seems that the general sentiment is one of resignation that things are set to get worse and possible much worse for global growth in the coming months.
We’re set for another quiet day in terms of fundamental economic data releases and so once again investors will be focussing on any fresh news on the Trade situation with equity bulls hoping that we start to see some more conciliatory sentiment from the White House in general and the President specifically.
It’s a quiet day ahead for data in Asia with risk sentiment set to dominate moves, however as we move into the London session investor focus will move to the UK where we hear from two prominent member of the MPC. In the New York session we have our first tier 1 data of the week in the form of the CB Consumer Confidence number with market watching closely to see if it’s recent turn in confidence has fed through to the US consumer yet.