- US President Trump says next months trade talks might get cancelled.
- 10-year US Treasury bond yield turns south, erases more than 1.5%.
- Wall Street extends decline amid souring market mood.
The USD/JPY pair came under renewed selling pressure in the last hour after US President Donald Trump latest comments on the US-China trade conflict weighed on the market sentiment and forced investors to flee to safer assets. As of writing, the pair was around 10-pips above the daily low that it set at 105.57 recently and was down 0.35% on a daily basis.
Trump makes sure markets don’t forget the trade conflict
Speaking to reporters at the White House, Trump reiterated that he wasn’t ready to do anything yet on a possible trade deal with China and added that next month’s face-to-face talks in Washington might be cancelled. Trump also took this opportunity to voice his criticism over the Federal Reserve and called for a full percentage point rate cut, arguing that the economy was “handcuffed” by the Fed’s monetary policy.
After spending a large portion of the day moving sideways, the 10-year US Treasury bond yield lost more than 1.5% following these comments. Reflecting the risk-off atmosphere, Wall Street’s main indexes continued to push lower and the trade-sensitive Nasdaq Composite Index was last down more than 1% on the day.
Meanwhile, despite the uninspiring Producer Price Index (PPI) data, the Greenback stays relatively resilient toward the weekend with the US Dollar Index staying in its daily range above 97.50 and helping the pair limit its losses for the time being. The US Bureau of Labor Statistics today reported that the core PPI on a yearly basis dropped to 2.1% in July from 2.3% and fell short of the market expectation of 2.4% while the PPI remained unchanged at 1.7% as expected.
Technical levels to watch for