Donald Trump backpedalled partially on the Chinese tariffs announced a couple of weeks ago. The Trump administration decided to delay the implementation of the tariffs on more than half of the targeted products from September to December. As expected, equity investors didn’t dither away this opportunity to reload on long equity positions – or to cover their short positions – sending global equities sharply higher in a matter of minutes; thanks to poor summer liquidity conditions. At the end of the day, it doesn’t change anything much as the tariffs should (we remain cautious) be implemented in the coming months anyway.

In our opinion, the decision to spare consumer-focus products (video games, cell phones, toys, laptop computers… etc) is a way to avoid hitting US consumer too badly before the holiday season which could have harmed its popularity ahead of next year US election. In addition, it helped to boost (temporarily) the equity market, as Trump loves to praise stock market gains.

 


 

Stay on top of the markets with Swissquote’s News & Analysis

 


 

We believe that investors overreacted to yesterday announcement as the tariffs situation didn’t improve. On the contrary, the announcement finalised tariffs on almost all other products that were free of additional tariffs. Therefore, it is reasonable to expect further downside for equities, especially in Europe as economic data continues to come on the soft side.

This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD crashes to new 2020 lows amid ECB dovishness, coronavirus fears

EUR/USD is trading below 1.1050, at the lowest since early December. ECB President Christine Lagarde refrained from acknowledging the recent economic improvement. Fears of the spread of the coronavirus are weighing on markets.

EUR/USD News

GBP/USD pressured toward 1.31 amid risk-off mood

GBP/USD is trading around 1.31, off the highs. Coronavirus headlines are sending traders to the safety of the US dollar. Speculation about the next BOE move is rife.

GBP/USD News

Top 3 Price Prediction Bitcoin, Ethereum, XRP: Set for a dive before the next big bull market

The first initiative comes from WhatsApp. Users of Facebook’s popular instant messaging application will be able to exchange Ether among themselves and other tokens that function over the ERC20 protocol.

Read more

XAU/USD bulls challenging 1573 resistance level

XAU/USD is trading in a bull trend above its main daily simple moving averages (SMAs). After rejecting the 1600 figure earlier in January, the metal has been consolidating near the $1560 per troy ounce.

Gold News

USD/JPY drops to fresh eight-day lows near 109.50

USD/JPY extends losses and trades close to an eight-day low near 109.50 in a relatively risk-off environment, with the media headlines full of the coronavirus as it spreads internationally. Bears can look to the golden ratio around mid-108s.

USD/JPY News

Forex Majors

Cryptocurrencies

Signatures