Financial Market – 23/7/2018

US

• US equities were down slightly on Friday while yields on Treasuries climbed the most since May as Trump reiterated that he’s unhappy with the Federal Reserve tightening after the administration has worked so hard to grow the economy.
• The US dollar weakened the most since March, after President Donald Trump’s latest verbal salvos fanned investor concern that a global trade war is escalating.

Europe

• European stocks declined, led by the auto sector, as Trump said a new round of tariffs on Chinese goods was “ready to go” and that China and the European Union were manipulating their currencies.
• The president’s remarks indicate his willingness to escalate America’s trade war with China, dashing hopes the two sides would arrive at a compromise before more tariffs were imposed. Meanwhile, German Chancellor Angela Merkel said the EU is ready to retaliate against any U.S. auto tariffs as it prepares to meet with Trump to discuss the possibility of cutting car duties.

Asia

• Japanese stocks fell today after the yen strengthened amid global trade tensions and speculation the Bank of Japan is debating a policy shift. The yen climbed and Japanese government bonds slid on speculation that the Bank of Japan may debate some fine tuning in its stimulus policy.
• Chinese equities gained 0.9% overnight, adding to gains from the previous session amid signs of intervention from Chinese authorities looking to stem the currency’s weakness.