Wall Street walloped

Equities 4 minutes to read

Michael O’Neill

FX Trader, Loonieviews.net

Summary:  President Trump tweeted yesterday that “We will be taking in Tens of Billion of Dollars in Tariffs from China.” Wall Street investors are praying some of those tariff dollars are earmarked for them


The Dow Jones Industrial Average was down 374 points to start the week after news of China’s retaliation to Trump’s tariff bump. The S&P 500 and Nasdaq followed the Dow lower, and all three indices were down more than 2.2% as of 1400 GMT.

President Trump tweeted up a storm again this morning. He said “Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!... ..There will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!”

China didn’t get the message. They hiked tariffs on $60.0 billion of US imports but showed a modicum of restraint by delaying the implementation until June 1.

The European Union may have caught a break. Many believe that Trump’s plan to slap 25% tariffs on car imports from the EU may get kicked down the road in light of the escalation in US/China trade tensions.

FX markets reacted by selling the commodity bloc currencies, buying EUR, JPY, and CHF while ignoring GBP. USDCAD has mildly outperformed its Antipodean counterparts due to the lingering impact of Friday’s record employment report and the surge in crude oil prices. WTI extended overnight gains, rising from the New York open of $62.59/barrel to $63.30, before retreating.
Chart: USDCAD and WTI hourly. Source: Saxo Bank

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