We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
More View more
Real Time News
  • The US #StockMarket is on pace to close markedly lower to start the week with less than 30-minutes left in today's #trading session as #Coronavirus fears roil Wall Street S&P 500: -1.46% Dow Jones: -1.45% Nasdaq: -1.80% Russell 2K: -0.73% VIX: +22.25% $SPX $DJI $NDX $RUT $VIX
  • #Bitcoin Daily Pivot Points: S3: 7768.5 S2: 8055.53 S1: 8177.32 P: 8342.56 R1: 8464.35 R2: 8629.59 R3: 8916.62
  • The #Dow Jones remains elevated as tech and defensive sectors underpin the index. However, we see caution in chasing the market higher amid rising risks of a potential correction. Get your market update from @JMcQueenFX here:https://t.co/3klcZ6CHpe https://t.co/3xvxNNWb2O
  • RT @MarketWatch: Economic hit from coronavirus likely to be short lived, but it’s still ‘a little scary, frankly’ https://t.co/NyB3DCRpGS
  • Know the Slope. . . $SPX500 Daily - https://t.co/FoBtqk9CYA https://t.co/nkmzVkx5p6
  • $EURUSD Daily Pivot Points: S3: 1.095 S2: 1.0993 S1: 1.1009 P: 1.1035 R1: 1.1051 R2: 1.1078 R3: 1.112
  • $AUDUSD has been my favored pair to pick on for $USD strength scenarios. RBA is next week, potential for losses still there. But can sellers break-through that .6700 handle that proved so tough to break last year? https://www.dailyfx.com/forex/fundamental/article/drivers_of_price_action/2020/01/27/australian-dollar-price-analysis-aussie-crushed-js-audusd-aud-usd-nears-6700.html https://t.co/DhGJRHFssC
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Gold: 0.47% Oil - US Crude: -0.13% Silver: -0.18% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/JhDhC307cu
  • Important to keep in mind ahead of $AAPL earnings tomorrow considering what happened the last time they revised their outlook lower - https://www.dailyfx.com/forex/market_alert/2019/01/02/Apple-Cuts-Revenue-Forecast-on-US-China-Trade-War-USDJPY-Crashes.html?ref-author=phanks https://t.co/XSOY7Ow5pa
  • Here is an update to the rolling 12-month market performance of those assets that I consider to be 'risk sensitivity' through today's fireworks. No doubt in my mind it is a 'risk move' https://t.co/1ThNLiUIOq
Airbus WTO Ruling Sends European Stocks Falling

Airbus WTO Ruling Sends European Stocks Falling

2019-10-02 19:29:00
Thomas Westwater,

WTO Ruling Talking Points:

  • WTO Ruling allows the United States to levy up to $7.5 billion in tariffs on European Union exports
  • Retaliation from EU could prompt increased tensions in world trade
  • Section 232 auto tariff announcement expected next month from Trump administration

The World Trade Organization handed down a ruling Wednesday to conclude a 15-year fight on whether the European Union is subsidizing Airbus, a manufacturer of large aircraft in the EU. The ruling authorizes the United States to levy tariffs up to $7.5 billion on exports from the European Union, which the USTR just formally announced will move forward with imposing. Effective on October 18, the US will slap a 10% tariff on large commercial aircraft and a 25% tariff on other agrigultural and industrial goods imported from the EU.

European stocks ended the day deep in the red as the news compounded on current Brexit dramas, further unsettling market participants. The DAX 30 finished down 2.76%, while the FTSE100 finished in the red by 3.23%. Airbus stock itself closed 2.04% lower Wednesday.

DAX 30 (30-Min Chart with RSI)

DAX 30-Min Price Chart

The United States formally issued the complaint to the WTO nine months before the European Union levied their own formal complaint about the United States for subsidizing Boeing. That ruling is expected to be handed down sometime at the beginning of next year. However, the United States could move forward with tariffs before that ruling which many believe would escalate tensions between the US and the world’s largest trading bloc and increase global trade tensions. The Trump administration is also deliberating on section 232 tariffs aimed mainly at European Automobile and parts manufactures, with Trump expected to announce his decision before November 13th on that matter. Section 232 tariffs are authorized under the Trade Expansion Act of 1962 for national security threats and are separate from the WTO.

With the ongoing section 232 investigation and the recent WTO ruling, European officials are in a tight spot. A retaliatory strike outside the WTO, should the US impose tariffs, could open the door for the Trump administration to move forward with the 232 auto tariffs, which would massively increase trade tensions.

Similarly, any indication that the EU will retaliate to the Airbus-related tariffs outside of the WTO’s scope would mark a significant escalation in EU-US trade tensions and could see the conflict spiral into a tit-for-tat affair. As it stands, the WTO’s ruling asserts that the $7.5 billion in tariffs on the EU is “legal,” whereas the section 232 investigation is not backed by the WTO. Therefore, a willingness from the EU to answer back without the WTO’s blessing could open the flood gates for more conflict.

To that end, European officials have brought several retaliatory options to the table, perhaps to increase their perceived leverage. These measures include revoking a 2006 settlement with the United States over tax exemptions for international sales structures that are utilized by Boeing.

--Written by Thomas Westwater, Intern Analyst for DailyFX.com Contact and follow Thomas on Twitter @FxWestwater

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.