MARKET DEVELOPMENT – Global Equities on the Backfoot following China’s Trade Threat
Equities: European equity markets and US equity futures have been pressured throughout the morning session after China threatened to place an export ban of rare earth materials. As such, with the trade war tensions showing little signs of easing, risk off trade has dominated financial markets with global bond yields also dropping to multi-year lows, while the safe-haven JPY and CHF have outperformed in the FX space. Alongside this, equity markets saw renewed selling after the US Secretary of State, Pompeo, noted that there may or may not be a trade deal with China, further heightening concerns that failure to reach a deal raises the likelihood of a recession.
Crude Oil: Brent and WTI crude futures are back on the defensive, posting losses of over 2%. Consequently, this has seen Brent crude make a break below its 200DMA following the move through $69/bbl. In turn, commodity linked currencies have been on the backfoot with the NOK the notable underperformer across major G10 currencies.
Source: DailyFX, Thomson Reuters
DailyFX Economic Calendar: – North American Releases
WHAT’S DRIVING MARKETS TODAY
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--- Written by Justin McQueen, Market Analyst
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