Chinese stocks went into a tail spin on Tuesday as turbulence gripped equity markets in Asia, which sank to nine-month lows as investors feared the Sino-U.S. trade row could derail a rare period of synchronized global growth. Speculation was spread that the central bank in China was intervening in the currency market to staunch losses and prevent a potentially destabilizing sell-off in the yuan. The trade row between the United States and major economies has rattled financial markets in the past several weeks, with no sign U.S. President Donald Trump is about to back down from his ‘America First’ protectionism policies that many fear will harm the global economy.
Trump told the World Trade Organization on Monday that “we’ll be doing something” if the United States is not treated properly, just hours after the European Union said that U.S. automotive tariffs would hurt its own vehicle industry and prompt retaliation.
In currencies, the EUR/USD was little changed at 1.1630 after shedding 0.45 % overnight, while had been pressured by political uncertainty in Germany, pared losses after Chancellor Angela Merkel’s conservatives settled a row over migration that threatened to topple her governing coalition after interior minister Horst Seehofer dropped his threat to quit. Intraday bias in USD/JPY stays mildly on the upside. Current rebound from 108.10 should target a test on 111.39 high.
In Commodities, Gold prices crept higher early on Tuesday, after falling about 1% to a six-and-a-half-month low in the previous session, as a softer dollar and mounting global trade tensions supported the safe-haven metal. In Oil, prices climbed on Tuesday after Libya declared force majeure on some of its supplies, with Brent crude rising 0.83% to 77.94 per barrel.
For today important economic release is Construction PMI affecting at first the GBP/USD movements.