Ongoing tariff war drags global markets

Global markets retreat deepened last week as President Trump’s surprise decision to impose tariffs on imports from Mexico added to global trade slowing concerns with no prospect of US-China dispute resolution. The S&P 500 loss more than doubled to 2.6% last week while the ICE US dollar index turned 0.2% higher.

Losses of five out of six major developed market stock indexes widened last week. Dow recorded the sharpest loss: it dropped 3%. Half of six major currencies reversed previous week’s dynamics against the US dollar, while the range of major currency pairs’ weekly fluctuations almost doubled as it shifted down. The Japanese yen was the leader in terms of percentage change: it gained 1.2% against the US dollar.

China President Xi Jinping’s two-day visit to Russia starting on Wednesday after President Trump’s meeting with UK Prime Minister Theresa May in London today are the high profile political events this week which may generate some important economic news. And US Manufacturing PMI data today with May jobs report due Friday will be in focus too.