Deteriorating US-China trade relations weigh on markets

Global growth slowing concerns overshadowed equities markets last week despite possible tax cut stimulus talks by US officials. The SP 500 losses widened to 1.4% as China unveiled new 5% to 10% tariffs on another $75 billion worth of US goods, including autos. The ICE US dollar index turned 0.5% lower as President Trump announced additional duties on some $550 billion of Chinese goods.

All but Nikkei and Hang Seng out of six largest developed market indexes extended previous week’s losses. Nasdaq was the loss leader: it dropped 1.8%. Three out of six major currency pairs reversed previous week’s dynamics, and the range of major currency pairs’ weekly fluctuations remained steady as it inched higher. The British Pound maintained the leadership in terms of percentage change: it rose another 1.1% against the US dollar.

Reports on US economy performance such as durable goods orders today and preliminary gross domestic product for second quarter due Thursday will be in focus this week as investors continue to monitor developments on US-China trade front after President Trump called for US companies to start moving out of China after Beijing unveiled new retaliatory tariffs last Friday.