Trade tensions between the US and China escalate, which triggers a stock market selloff. But US bonds rally, and gold is up too on safe haven demand. And watch out today for trade data from China.
In our Deep-Dive interview, ANZ Senior Commodities Strategist Daniel Hynes says China’s stockpiling of oil has held up prices, for now.
5 things to know in 5 minutes:
Donald Trump has threatened to add an extra 100% tariff to exports from China, after China further restricted its rare earth exports. He’s also suggested he might cancel a summit with President Xi Jinping due in a fortnight, says ANZ Group Chief Economist Richard Yetsenga.
The ensuing slump in US stocks was however matched to a rally in US Treasury bonds, as investors sought safe havens, says Richard.
Richard says a deal between China and the United States, a type of grand bargain, has always been at the centre of hopes the global trade ructions could settle down.
Japan’s governing coalition between the Liberal Democratic Party and Komeito fell apart late on Friday over the appointment of Sanae Takeichi as Prime Minister. The yen bounced, given the new PM was seen as dovish on interest rates and Government borrowing and the collapse is seen as watering down her power. ANZ FX Strategist Felix Ryan says yen intervention is a possibility.
ANZ Economist Vicky Xiao Zhou is expecting China to report export growth of 6.6% from a year ago, while import growth is expected to be slower at 1.8%.
Cheers,
Bernard.
PS: Catch you tomorrow with the results from those Chinese export and import figures, and India’s consumer price inflation figures also due today.
