The markets began to struggle as lunchtime approached, Donald Trump heightening his trade war rhetoric in an interview with CNBC.
The President said he is ‘ready to go to 500’ – a reference to the $505.5 billion in Chinese goods the US accepted last year – claiming he would be willing to impose tariffs on every single dollar in imports sent over from Beijing if need be.
This bellicose comment turned a previously somnolent session into another red-soaked mess, with the markets taking a dive almost immediately after the interview went out. The FTSE managed to limit its losses to around 40 points, drifting away from the 7700 level it had only just returned to; things were worse in the Eurozone, where the DAX and CAC fell 1% apiece.
The Dow Jones is set to match its European peers when the bell rings on Wall Street. The futures are pointing to a half a percent decline, one that would take the Dow back under 24950 having been as high as 25200 earlier in the week.
Interestingly the forex markets were completely placid. Normally one would expect the dollar to act as something of a safe haven following a trade war flare-up. Yet Trump undermined the currency’s recent super strength by attacking the Federal Reserve and its interest rate plans, meaning investors might not feel quite as comfortable cosying up to the greenback this Friday.
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