Analysts at Rabobank suggest that while this is arguably true for every day of the week in current times, the biggest event risk today is a potential tweet from President Trump.
Key Quotes
“Today is the deadline for US firms to respond to the President’s proposal to raise tariffs on a further USD 200bn in Chinese exports, and as White House spokeswoman Sarah Sanders stated yesterday, it is “certainly a possibility” that Trump will push ahead with these tariffs after the consultation period ends.”
“Yesterday’s trade data only make this a more plausible scenario, seeing that the US trade deficit deteriorated to USD 50.1bn in July.”
“Moreover, the trade deficit with China reached another record level: the US imported USD 36.8bn more in goods from China than it exported to the country. Surely, these numbers will provoke a response from President Trump.”
“That then, could lead to new China tariffs being announced shortly – and China in turn stands ready to retaliate. This would certainly be bad news for equities globally, as it would elevate the trade conflict to a whole new level.”
“Fears of a US tariffs announcement are adding to the EM sell-off as investors seek safer havens like USD, JPY and CHF.”
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