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U.S. At War: China Retaliates To Trump's Tariffs

Apr. 04, 2018 7:11 AM ETUUP, UDN, FXE, FXY, FXB, FXC, FXF, FXA
Dean Popplewell profile picture
Dean Popplewell

By Dean Popplewell

Wednesday April 4: Five things the markets are talking about

Sino-US Trade fears

Investors' trade fears are back with a bang as trade tension is again the market's central focus, with Asian and European equity bourses turning lower amid an escalation of protectionist rhetoric and action between China and the US.

Ahead of the US open, investors have piled into safe-haven assets (¥, Au, and Ag) as China unveiled retaliatory measures against US tariffs.

Beijing plans to levy a +25% tariff on soybeans, auto, and chemical products among +106 products.

Stateside, equities will open deep in the red, down close to -2%, while the 'big' dollar drifts with Treasury prices.

On Tap: Up next is US ADP non-farm employment change at 08:15 am EDT and US ISM non-manufacturing PMI at 10:00 am EDT and DoE crude oil inventories at 10:30 am EDT.

1. Stocks see red on retaliation to tariffs

Ahead of China's tariff retaliation announcement, Japanese stocks edged higher on Wednesday in choppy trade as some automakers rose after they reported strong US sales numbers, helping to offset the impact of a stronger yen (¥106.19). The Nikkei added +0.1%, while the broader Topix rallied just shy of +0.1%.

Down Under, the Aussie's S&P/ASX 200 added +0.2% on stronger than expected retail sales data (March +0.6% vs. +0.3% m/m), while in S. Korea, stocks hit a week's low with the Kospi down -1.4%. Tech giant, Samsung (OTCPK:SSNLF), dropped -2.5% to hit a fresh four-week low.

In China, stocks, which started steadily, ended lower with benchmarks in Shanghai and Shenzhen down -0.2% and -0.6% respectively after Beijing said it would levy tariffs on soybeans, autos and chemical products.

In Hong Kong, the Hang Seng declined late in the session and was last down -1.8% at a seven-week low.

This article was written by

Dean Popplewell profile picture
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.

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