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Analysts at ANZ explained that China and the EU have come out of talks united against the threat of US protectionism.  

Key Quotes:

“China’s Vice Premier Liu He stated both China and the EU “firmly oppose unilateralism and protectionism and think these actions may bring recession and turbulence to the global economy”. Global equity markets were weak. The S&P 500 and DJIA were down 2.0% and 1.8% at the time of writing.”

“The DAX finished down 2.5%, the CAC 40 fell 1.9% and the FTSE 100 declined 2.2%.”

“However, the flight to safety was modest, with the yield on the US 10-year down just 2bps to 2.87% and the bund yield down 1bp to 0.33%. The USD was lower against all G10 with the exception of AUD, while the EUR outperformed.”

“Commodities softened, with the CRB Index down 1.1% at the time of writing. WTI gave back some of its recent gains, dropping 0.8% and gold dipped 0.2%.”