Entering text into the input field will update the search result below

The Heat Is On (Again)

Dean Popplewell profile picture
Dean Popplewell

By Stephen Innes

Just when you thought it was safe to go back in the water, President Trump orders USTR to consider $100 billion in additional tariffs, confirming the view that trade war rhetoric is unlikely to leave the picture anytime soon.

Equity markets held a decent bid overnight with risk sentiment bouncing higher, on the back of the recent trade rhetoric suggesting both camps are incredibly motivated to contain trade tension for fear of a global market meltdown. But this morning's headlines will question that view. But at a minimum, investors should start wondering why the US administration's soothsayers are sending out contradictory signals. I fear there are some awful actors in play on this political stage.

With the seismic shifts in sentiment this week the last thing this market needs is more confusion. The latest in a line of bombastic Trump headlines now suggests it will take more than a kind week to sort this trade war issue out.

However, the hyper-volatility we've been warning about all year could be just around the corner.

We're out of the fire and into the frying pan for stock markets as investors have forgotten about the Fed, who could be the market's biggest universal foe. So besides an unlikely full-blown trade war, the real risk facing capital markets is a more aggressive Fed, and tonight's average hourly wages data could provide that inflation fodder for reigniting the four rate hikes debate. But let's not forget that delicate issue when QE gets pulled back, there's no accurate roadmap to navigate that bumpy road.

Risk aversion plays aside, with a nudge from tonight's payrolls data it could put the finishing touches on a remarkable week for the dollar. Of course, position squaring into NFP could be the culprit for the dollar's continued revival, but economic data has

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.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.