Sentiment sours as trade war escalates

Sentiment sours as trade war escalates

Clare MacCarthy
Senior Editor, Saxo Bank Group


Equities are off, the dollar's ascent has been stopped in its stride and sentiment has turned sour after the EU retaliated to the the Trump tariffs with a raft of levies of its own.

"So another directional change as we went from risk on to risk off. It's unclear what the driver is though as Peter Garnry, out equity strategist, told me yesterday it could be a function of the Daimler profit warning as well as the trade war itself," says John J Hardy, Saxo's Head of Forex Strategy.

Furthermore, two central bank meetings yesterday saw a hawkish tilt with Norges Bank pointing to a September hike and Bank of England upgrades increasing the possibility of a UK hike in August, Hardy adds. This suggests that the central bank convergence theme is back in play. "But we have our eyes out and we're open minded as to whether the dollar momentum has just hit the wall," he concludes.

Meanwhile it's been a troubled week for commodities as we've seen the dollar continue to strength until yesterday, reports Ole Hansen, Saxo's Head of Commodity Strategy. "Much of the commodity weakness was due to dollar strength, except in metals whose weakness came from trade fears," he says.

But today's big focus, of course, is the Opec and non-Opec series of meetings in Vienna, which kick off today. "The Opec members had a technical meeting yesterday and it seems like they are looking at a production rise, without the support of Iran and Venezuela. They're not changing the output ceiling, the cap will still be in place, but what they're doing is sharing out the lost output from Venezuelan production. The market is taking this positively but with the caveat that we don't know what they'll do and whether Venezuela will veto the deal," Hansen says.

Note that the closed meeting starts at 11:00 CET and a press conference is scheduled for 13:00 CET.


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992