Markets back in the red as tariffs increased
European markets are mostly lower at the start of the week and the US is expected to open even deeper in the red after talks between the US and China broke down and tariffs were increased.
The talks appeared to be going quite smoothly until a week ago when the cracks started to appear, since when markets have given up a chunk of their first quarter gains. There is still some hope that a deal can be reached, with a possible meeting at next month’s G20 being touted between Trump and Xi in an attempt to break the impasse.
It will now be interesting to see just how much conviction there is in the first quarter rebound, with the prospect of a Sino-US deal a big contributor to the improved sentiment in the markets. Of course, there were other important factors as well and central banks have made a significant effort to alleviate those concerns but trade tariffs are a major concern at a time when global growth is already expected to slow.
