From dancing to a more positive beat, the market is now marching to the beat of Presidents Trump’s trade war banter

From dancing to a more positive beat, the market is now marching to the beat of Presidents Trump’s trade war banter.

A whole number of things just went sideways for global risk sentiment.

Timing is everything when it comes to President Trump, and while his tariff comments are probably a case of holding cards close to his chest while keeping the pressure on China, when taken in context with all the other noise, markets have quickly gone from good to bad.

His latest comments on the immigration front with Mexico are bringing into question the USMCA again ” “We won’t be trading with Mexico if the relationship isn’t good […] we want to see Mexico move migrants back to Central America.”

In general, risk sentiment is getting hit with a ton of bricks driven by Trump’s hard-line immigration stance threating the  USMCA and then backed up this morning bellicose tariff comments directed at China.

It doesn’t sound like we will see Donald, the Deal Maker but instead Trump the Trade Warrior at G20

And then on the never-ending Brexit saga and perhaps a foreshadowing of what to expect when May faces parliament. BREXITEERS ‘WILL BACK MAY’S DEAL IF SHE SAYS WHEN SHE’S QUITTING’- THE TIMES

And to add a bit of spice to the local narrative, The Australian Government has just lost its control of parliament after a surprise departure. Julia Banks, an MP from the Liberal Party, has made a shock announcement that she is leaving the party and joining the ranks of independent MPs. This politically damaging body blow has sent the Aussie hurtling towards them.7200

It’s a flat-out toxic cocktail that has seen equities and commodities come under pressure

Oil is suffering from the ” risk off ” financial flow amidst uncertainty over just how aggressively Saudi Arabia will be inclined to offer up d a production cut with enough sting to buttress prices without provoking the ire of President Trump.  President Trump is not in a good mood today. !!

So how was your morning ??

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes