Global Markets Retreat as Trump Escalates Trade War

Strategic Insights -

President Donald Trump's escalating trade war has sent shockwaves across global markets, with the US President threatening a higher blanket tariff and a 35% levy on Canada, causing a significant retreat in stock markets worldwide. Meanwhile, Bitcoin continued to push upwards, reaching an all-time high above $118,000. Despite the uncertainty, the dollar and oil prices gained.

Key Takeaways:

  • The FTSE 100 and London's pound retreated after data showed the UK economy unexpectedly shrunk in May, its second consecutive monthly decline.
  • Investors were awaiting news of Trump's new tariff level targeting the European Union, with a letter expected by the end of the week.
  • Trump's initial bombshell announcement of tariffs on April 2 sent markets into turmoil until he paused them for three months.
  • The latest measures have had less impact, but the FTSE 100 was down overall nearing midday.
  • Shares in BP jumped around two percent in London after the energy giant said it expected to report higher oil and gas production for its second quarter.
  • The optimism from earlier in the week "is giving way to fears of an impending tariff surprise as the weekend approaches," said Jochen Stanzl, chief market analyst at CMC Markets.

Statistics:

  • The FTSE 100 was down 0.6 percent at 8,923.68 points.
  • The CAC 40 in Paris dropped 1.0 percent at 7,825.22.
  • The DAX in Frankfurt fell 1.1 percent at 24,193.54.
  • The Nikkei 225 in Tokyo dropped 0.2 percent at 39,569.68.
  • The Hang Seng Index in Hong Kong rose 0.5 percent at 24,139.57.
  • The S&P 500 and Nasdaq both rose, with the S&P 500 hitting a fresh peak.
  • The New York Dow rose 0.4 percent at 44,650.64.
  • The Euro/dollar rate was down at $1.1692 from $1.1698 on Thursday.
  • The pound/dollar rate was down at $1.3540 from $1.3576.
  • The dollar/yen rate was up at 146.80 yen from 146.19 yen.
  • Brent North Sea Crude rose 0.6 percent at $69.06 per barrel.
  • West Texas Intermediate rose 0.7 percent at $67.04 per barrel.

Sources:

  • "Global Markets Retreat as Trump Escalates Trade War". Reuters, Original publication date not provided.
  • "Markets Mellow After S&P 500 and Nasdaq hit records". Bloomberg, Original publication date not provided.
  • "UK economy unexpectedly shrinks in May". AFP, Originally published on doc.afp.com, part of the BLOX Digital Content Exchange.