The Threat of the Trade War Beginning Between the US and China Hit the Markets

The US dollar weakened against the basket of the major currencies due to the threat of a trade war with China. Yesterday, the US President Donald Trump signed a document to impose import duties on Chinese goods at $60 billion a year. Also, the official accused the PRC of stealing the intellectual property of the US and American companies. These events caused the White House reorganization again. China, in turn, is going to raise duties on the import of 128 items of American goods. These events caused the growth of volatility in the financial markets.

Yesterday, the Bank of England left the key interest rate at the previous level of 0.50%, as investors expected. The central bank will adhere to a gradual interest rate increase, as inflation and economic growth are in line with the February forecasts.

Yesterday, the “black gold” prices fell significantly due to the possible start of a trade war between the US and China. Today, quotes began to recover. Futures for the WTI crude oil are testing $65.00 per barrel. At 19:00 (GMT+2:00) a report on the US oil rig count will be published.

Market Indicators

Yesterday, there were aggressive sales in the US stock market: #SPY (2.50%), #DIA (2.94%), #QQQ (2.47%).

At the moment, the 10year US government bonds yield is at the level of 2.812.82%.

Data on durable goods orders in the US at 14:30 (GMT+2:00);Core consumer price index in Canada at 14:30 (GMT+2:00);Statistics on retail sales in Canada at 14:30 (GMT+2:00);New home sales in the US at 16:00 (GMT+2:00).

by JustMarkets, 2018.03.23