020 7898 0500Trump’s refusal to cave in to pressure from the international community over his trade tariffs caused the Asian stock markets to fall to their lowest levels since the latter part of last year. However, what started badly for the Chinese yuan ended with a slightly rosier picture, as it managed to climb back from its weakest level in almost a year.
US tariffs on $34 billion of Chinese imports are set to come into force on 6 July, with China set to respond with its own tariffs on the same value of American goods. Nobody can realistically expect to win a trade war (despite what Trump would have you believe), but it could prove to be a case of who blinks first. It does offer something of a conundrum, for were China to change its policies and bow to Trump’s demands, it would show weakness domestically, but could also encourage Trump to continue in a similar vein.
The only release of note was factory orders, which showed new orders increased 0.4% month-over-month in May 2018 from a downwardly revised 0.4% drop in April. Analysts had forecast a drop of 0.1%, so the release easily beat expectations. Today is quiet for economic data, but the trade tariff troubles will continue and the end of the week is extremely busy for the US.
