EU Retail Sales beat estimates 1.1% vs 0.2% exp
US Job solid despite growth concerns
Trump slashes 10% tariffs on 300 bln Chinese goods
Last day of the trading week wraps up a very eventful week featured by revamp of trade tensions between US and China and renewed dispute between the White House and the FED on rate cuts. After this week largely anticipated FED 25 bbp cut, last night the US President imposed another round of tariffs on Chinese exports, in a move that looks coincidental as leverage against the FED to cut more aggressively by end Trump mandate. China's response today signals escalation as Beijing pledged to respond if US insists on tariffs.
US Equities came under pressure after renewed tensions between the two larges economy in the world threatening to slash tariffs at each other. SP500 gave up 5 weeks of gains falling 3.5% for the week.
On the FX front the USD traded softer as trade war escalation makes the FED September cut a certainty. However, the reaction across major G10 counterparts was choppy and contained around recent lows.
Crude Oil paired back some losses after yesterday 8% slump.Gold remained elevated amid USD weakness and risk-off sentiment. Global Yields fall, with the US 10y back below 2% as traders price in more cuts ahead.
If you missed the morning briefing from the desk click HERE