A sell-off in Chinese markets knocked Asian stocks on Wednesday as U.S. threats of tariffs on an additional USD 200 billion worth of Chinese goods pushed the world’s two biggest economies ever closer to a full-scale trade war. Washington proposed the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement. The United States had just imposed tariffs on USD 34 billion worth of Chinese goods on Friday, drawing immediate retaliatory duties from Beijing on U.S. imports in the first shots of a heated trade war. U.S. President Donald Trump had warned then that his country may ultimately impose tariffs on more than USD 500 billion worth of Chinese imports – roughly the total amount of U.S. imports from China last year.
In currencies, the EUR/USD is down for the second day in a row, extending the rejection from Monday’s tops in the boundaries of 1.1800 the figure against the backdrop of increasing concerns over the US-China trade war. Regarding GBP/USD, is trading steadily ahead of Wednesday’s London market session, sticking close to 1.3250 after marking an inside day for Tuesday.
In commodities, Gold prices fell on Wednesday as the dollar firmed after the Trump administration threatened to impose additional tariffs on USD 200 billion worth of Chinese goods. Oil prices fell on today, with Brent dropping by more than 1 dollar at one point, after U.S. President Donald Trump threatened to levy new trade tariffs on China. The specter of tariffs on a further USD 200 billion worth of Chinese goods sent commodities lower along with stock markets, with trade tensions between the world’s two biggest economies intensifying. The bearish mood was also fuelled by news the United States would consider requests for waivers from sanctions due to snap back into place on Iranian crude exports. Washington will consider requests from some countries to be exempted from sanctions it will put into effect in November to prevent Iran from exporting oil, U.S. Secretary of State Mike Pompeo said on Tuesday.
For today important economic release is ECB President Draghi Speaks, BOC Monetary Policy Report, BOC Rate Statement, Overnight Rate, Crude Oil Inventories, BOC Press Conference and BOE Gov Carney Speaks.