Stocks on Pause as US Trade Dispute Against Europe Derails Rally

April’s equities rally risked running out of puff on Tuesday, as a U.S. threat to slap tariffs on hundreds of European goods and expectations of another chunky chop to the IMF’s global growth forecasts tested investors’ stamina.

Asia had eked out a 8-month high overnight but Europe was left flat after the office of the U.S. Trade Representative sent its proposals to the World Trade Organisation, saying the EU had provided $11 billion worth subsidies to Airbus.

The planemaker’ shares dropped as much as 2.5 percent in early deals. Many of its key suppliers lost between 0.7 percent and 1.2 percent, though it could have been worse and most of Europe’s big bourses clawed back to level.

Aberdeen Standard Investment’s head of global multi-asset strategy, Andrew Milligan, said: “Signals like this just remind people… that the strategic rivalry between the U.S. and other countries is serious and is not going to go away.”

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza