Market Sentiment Suffering From Trade War Fears, Tech Selloff
Market talking points:
- Traders continue to shun riskier assets like stocks as the US and China escalate their trade war.
- Sentiment is also hit by continuing doubts about US technology shares.
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Market confidence ebbs
Market sentiment continues to be hit by concerns about an escalating trade war between the US and China and by continuing weakness in US technology stocks. In the latest development, China has increased tariffs by up to 25% on 128 US products including frozen pork, wine, fruits and nuts, escalating its dispute with the US after the US imposed duties on imports of Chinese aluminum and steel.
As for US technology stocks, Facebook fell 2.75% on Wall Street Monday, Apple eased by 0.66%, Amazon dropped 5.21%, Netflix lost 5.10% and Alphabet (the parent company of Google) was down 2.45%.
However, in currencies, risk-off sentiment failed to damage riskier currencies like the Australian Dollar or help so-called safe havens like the Japanese Yen. The AUDJPY cross actually gained ground Monday.
AUDJPY Price Chart, Five-Minute Timeframe (April 2 – 3, 2018)
There was also little reaction in gold, which is seen as another haven asset and steadied Tuesday after its gains Monday.
Gold Price Chart, Five-Minute Timeframe (April 2 – 3, 2018)
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--- Written by Martin Essex, Analyst and Editor