Trump disrupts market calm   


06 May 2019 : Speaking of risk-off, financial markets started the week on an extremely cautious note after US President Donald Trump unexpectedly raised the stakes in trade talks with China. Risk aversion swept across Asian and emerging markets in early Monday trading, following the US President’s tweets about raising existing US tariffs on $200 billion worth of Chinese imports this Friday, while hinting at new tariffs “shortly” on a separate $325 billion worth of Chinese goods.


While it remains to be seen whether the Trump administration will press ahead with the added tariffs, it’s already evident that markets are taking some risk off the table, undermining the base case that investors had been pricing in: a formalized US-China trade deal in the near future.


With Chinese Vice Premier Liu He scheduled to lead a delegation to Washington this week, the timing of the tweets also suggests that President Trump is attempting to push through an immediate resolution to the drawn-out talks. This latest development once again demonstrates how Trump’s tweets can be a wild card for any attempt to formulate a lasting outlook on global growth, as trade tensions remain a key overhang for markets.


Reporting for EasyKobo on Monday , 06 May 2019 in Lagos, Nigeria


Source: Lukman Otunuga, FXTM Research Analyst


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