Written by Jimmy McGiv
Orlando, Florida (Reuters) – Trading Day
Understand the forces that lead global markets
Written by Jimmy McGiv, a column writer on the market
Only when a degree of calm seemed to have settled on global markets, despite a disturbing rise in many long -term revenues for many countries, US president Donald Trump gave the world a flagrant reminder on Friday that his commercial war has not yet ended.
In the threat of a 50 % customs tariff on European goods as of June 1 and ran a 25 % fee on iPhone Apple devices sold in the United States, Trump rocked investors of any recent imbalance.
European and American stocks – the S&P 500 seal their most severe weekly decline since March – fell to ensure that it will be a long weekend and anxiety for investors. The United States and UK markets were closed on Monday for holidays.
The optimistic opinion is that this is a familiar tactic to negotiate – take out all the burning weapons, create chaos, safe privileges, retreat, then demand victory because any deal that was concluded is not in a bad place like the original worst scenario.
Citi analysts are confident of tariff fears, and that a 50 % tax on Europe will not last for a long time even if it is implemented. The negative aspect of risky assets “controlled”.
This may be the path of US talks, as it seems the case with the US -Chinese negotiations. However, large doses of uncertainty and risks have been injected into the markets, and investors must price assets accordingly.
Barclays economists estimate that if a 50 % tariff is achieved on European Union goods, the total collective tariff for all American imports will rise to 21 % of 14 %, and an additional percentage will 0.5 to GDP growth will put the American economy on the edge of the recession.
Another main focus of investors this week was sovereign bonds, especially long entitlements, in many G7 countries including the United States, Japan and Britain.
Weak auctions, debt anxiety and anxiety, and pollution fears in politics have pushed long -term returns to multi -year or standard standard levels. Moody’s stripping in the United States of its tripartite credit rating-a week ago has also weighs the price of the treasury.
It is concerned that the increasing US cabinet revenues did not provide any support to the dollar and finally began in the weight of Wall Street. In fact, the decline in American stocks immediately after the 20 -year auction on Wednesday was the third market’s reaction to the bond auction at all, according to Kevin Gordon in Charles Schwab.
It is always possible to distort the United States and the United Kingdom on Monday and the end of the month next week. The re -correction of global trade tensions and the historically high bond returns are now in this mix.
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Main market movements for this week
* The main Wall Street index ends the week lower, as Thes & P 500 holds 2.6 % for the worst week since the end of March. * Apple shares decreased on Friday extends the weekly Concineto 7.5 %. They fell eight consecutive days, their worst response in January 2022. * European stocks rise for the sixth week in a row, but only. DAX in Germany reaches a standard number above 24,000 points and ISUP by 30 % of Low April 7. * The dollar index decreased by approximately 2 %, the first weekly loss. * Bonds in Japan for 30 years a week a week to ARCORD High are shy only of 3.20 %. The United States and the United Kingdom are also high levels of 5.16 % and 5.60 %, respectively.
Weekend scheme
The dollar slice is great. I wrote this week that although there are many good reasons in the long run to meet the dollar-financial problems, the credibility of politics, the “American exceptional” end, and the abolition of fading, to name a few-the pace of sale was not sustainable and it seems that a short-term reflection is possible.
Lurch puts from the dollar on Friday after the latest tariff of Trump’s tariff, any correction on the ice. But it is still on cards, if the collapse is in the connection of the dollar with the spread of the return is any evidence.
The dollar’s connection to the differences in the US region is usually very narrow – when the return of the dollar is expanded, the currency rises; When it shrinks, the dollar weakens. But this link has completely collapsed about … the day of liberation. The link is broken, but history indicates that it will not be for a long time.
Here are some of the best things that I have read this week:
1. Why is the federal reserve independent, and what does it mean in practice? – Brookings 2. Federal Reserve Review must process communication issues- omfif 3. Tariffs as shocks in cost: the effects of ideal policy-NBER 4. Request for offer: What is the most important inflation? – San Francisco Federal Reserve 5. Farewell, America – Karl Bellte
What can the markets move on Tuesday? (The United States and UK markets were closed on Monday)
* Consumer feelings in South Korea * Hong Kong Trading (April) * Governor of the Bank of Japan, Kazu Oda, speaks * Germany, consumer morale GFK (June) * US Treasury bonds for two years * Permanent commodities (April) * US consumer confidence (May)
The views expressed are the views of the author. It does not reflect the opinions of Reuters news, which, according to the principles of confidence, is committed to integrity, independence and liberation from bias.
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(Written by Jimmy McGiv; Edit by Nia Williams)
