Rolling coverage of the latest economic and financial news, as Chinese vice-premier Liu He travels to Washington for crunch trade talks
- Latest: FTSE 100 drops to 5-week low
- Introduction: Trade talks resume in US today
- Asian markets have hit six-week lows
- Full story: Trump blames Beijing
The Japanese yen has hit a three-month high, as traders pile into safe-haven assets.
The yen, traditionally popular when investors get the jitters, strengthened to ¥109.58 to the US dollar, a level last seen in February.
European stock markets are dripping electronic red ink again this morning.
Newsflash: China’s commerce ministry has confirmed that vice-premier Liu He is on his way to Washington, with a delegation of officials, for another round of trade talks.
Spokesman Gao Feng also warned that China has the “determination and capacity” to defend its interests — confirmation that it plans to retaliate if the US hikes tariffs tomorrow.
– China’s Commerce Ministry: China Is Fully Prepared To Defend Its Interests, Has Determination And Capacity To Do So
– Trade Delegation Has Already Left Beijing For US
– Vice Premier Liu Visit To The US Shows China’s Sincerity
– China’s Commerce Ministry: China Opposes Unilaterally Imposed Tariffs
– There Is No Winner In A Trade War
– Hopes US Meets China Halfway
– Hopes US Can Resolve Problem Through Dialogue Instead Of Unilateral Steps
Financial stocks, miners, car makers and industrial companies are leading today’s sell-off in Europe.
The next few hours will be “absolutely crucial” for the markets, says , market analyst at FXTM.
The paramount question of the day is – can the US and China strike a trade deal by midnight Friday in Washington, or will heightened tariffs kick in by 12:01AM? [or 5.10am BST tomorrow].
Given the looming deadline, hope for a trade resolution appears to be waning. Asian currencies are falling against the US Dollar, while the Japanese Yen is gaining 0.1 percent at the time of writing. Risk-off mood is clearly taking a hold on equity markets across the region, as they are all trading in negative territory on Thursday morning, except for Australian and Thai stocks.
The Europe-wide Stoxx 600 index has shed 1% in early trading, hitting a five-week low.
There are losses in Germany (-0.7%), France (-1.2%) and Spain (-0.7%).
London’s stock market is also being dragged down by several shares going ‘ex-dividend’ (meaning it’s too late to qualify for the next payout to shareholders)
European markets have opened in the red, dogged by trade war jitters.
In London, the FTSE 100 has tumbled by 51 points at the start of trading, down 0.6%, to 7219. That’s a new five-week low.
Asian stock markets have sunk to six-week lows today, amid anxiety over the trade talks.
Is Liu He really coming to do a deal? I think probably it’s case of gaining a reprieve in order to avert the rise in tariffs. It looks like we are yet a wee bit away from a comprehensive trade deal.
But the vice-premier’s visit and the prospect of tariffs being hiked is all a bit of an unknown right now and the market positioning is defensive as a result, but not yet into full selloff mode. Even if there it’s no go on trade, the dovish Fed will mean we shouldn’t see a selloff like we saw in Q4 2018.
Last night, president Trump accused China of ‘breaking the deal’ — a sign that today’s talks with Liu He’s delegation could be bruising.
“By the way, you see the tariffs we’re doing?
Because they broke the deal. They broke the deal. So they’re flying in, the vice premier tomorrow’s flying in – good man – but they broke the deal. They can’t do that, so they’ll be paying.”
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Outside of the knowledge of the craziness of sport, the last 24-48 hours has taught us that markets have no greater insight as to whether this week’s trade developments are just hardball from Trump or the start of a very real threat to the global growth narrative.
If it’s the latter then you can’t help but feel that markets look extremely complacent at this point. However if it’s just hardball negotiation en route to a deal then we’ll likely resume the rally.
#VIX , which is a reflection of estimated future volatility, has broken higher through 18.33 (March highs) after closing above the falling trend line from early 2019. Stopped short of the late-January highs though. Anticipation of volatility is definitely picking up pic.twitter.com/J5JfN9S2I6