Trump's Liz Truss moment?

Chris Beauchamp IG

He actually did it

The 104% tariff on China came into effect last night, and the result has been a fresh bloodbath in equities. Yesterday’s session had seen stocks rebound on hopes that negotiations between the US and key partners would begin, but the afternoon session in the US witnessed the eradication of the bounce as a wave of selling took hold following some poor bond auctions in the US. Far from backing down, the US president appears determined to double down on his tariffs.

Signs of bond market stress emerge

The irresistible force of Trump’s trade policy has hit the immovable object of the bond market. A continued surge in US yields has undermined any suggestion that Trump’s tariffs on China are not causing major concern among investors around the globe. US borrowing costs are rising rapidly, piling the pressure on Washington to react in some way to alleviate the growing crisis in financial markets.

Today’s focus is on the Fed and the 10-year auction at 6pm – this has moved from an equity market crisis to a bond market one, which is far more serious. Liz Truss was forced back down in 2022 when the tensions threatened to blow apart the UK financial system – will Trump have to do the same?

Author

Chris Beauchamp

Chris Beauchamp has been with IG for four years, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News.

GBP/USD advances to fresh monthly high above 1.3550

GBP/USD gains traction in the American session and trades at its highest level in a month at around 1.3550 on its way to a positive weekly closing. The US Dollar remains under pressure following the disappointing Retail Sales data and helps the pair push higher.

EUR/USD climbs toward 1.1550 on renewed USD weakness

EUR/USD gathers bullish momentum on Friday and trades in positive territory above 1.1500. The US Dollar weakens heading into the weekend as markets continues to scale back bets for a rate hike in September following the disappointing July Retail Sales data.

Gold regains its traction, rises toward $4,400

Gold stages a rebound after coming in within a touching distance of $4,300 earlier in the day and closes in on $4,400. Easing expectations for a Fed interest rate hike in September helps the precious metal find demand heading into the weekend. Meanwhile, weak Retail Sales data from the US puts additional weight on the USD's shoulders.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

UoM Consumer Sentiment Index set to ease as inflation, labour market worries loom

The University of Michigan will release the preliminary estimate of August’s Consumer Sentiment Index on Friday. US consumers’ confidence is expected to have ticked down to 54.5 in August from 55.2 in July, as measured by the UoM Consumer Sentiment Index.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.