Trade war news has if anything intensified in the last week, and over the weekend, but you would not know it with the rebound in emerging market and global equities, and a fall in the USD, according to Greg Gibbs, Analyst at Amplifying Global FX Capital.
Key Quotes
“Political risk in Italy has hardly been removed with the governing coalition of left and right populist parties that wish to defy EU fiscal rules. A big question for Italian and Eurozone financial stability is what happens if the ECB ends or further reduces its asset purchases after September; will Italian yields blow out further without ECB demand?”
“US labour data increase the risk that the US economy moves into a higher inflation environment, forcing the Fed to raise rates faster. At the very least the Fed appears set to continue to raise interest rates on a quarterly pace for a while yet.”
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