LIVE MARKETS-US tariffs? Transactional for Europe, punitive for China
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US TARIFFS? TRANSACTIONAL FOR EUROPE, PUNITIVE FOR CHINA
The looming threat of U.S. tariffs is one of the hot topics in financial markets, with investors closely evaluating the potential actions of the White House.
Thierry Wizman, global forex and rates strategist at Macquarie, offers a vision of the end-point of the issue.
"He (Trump)'d rather get the concessions that he demands from trading partners that are U.S, allies than to impose sanctions on them," he says.
"Trump's international-oriented advisers probably appreciate that a re-shoring of manufacturing production back to the U.S. won't be practical as a short-term proposition," he adds.
"Only against China do we see less scope for a transactional approach, and should thus expect punitive tariffs," he argues.
"That's because China, in this context, is different. It is viewed, at best, as a strategic competitor to the U.S., and in some among Trump's circle, as a strategic threat."
Macquarie expects the dollar/yuan to get to 7.50.
Whatever happens more market volatility is the most likely scenario at least in the short-term.
"The market whiplash from Monday’s tariffs agenda story and denial may offer a taste of the trading year ahead, with a return to policymaking-by-tweet suggesting a new period of heightened cross-asset volatility," says Mark Haefele, global wealth management Chief Investment Officer at UBS.
(Stefano Rebaudo)
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FOR WEDNESDAY'S OTHER LIVE MARKETS POSTS
EUROPEAN DEFENCE NAMES BOOST STOXX, OIL NAMES CAP GAINS CLICK HERE
STRONG DOLLAR, RISING YIELDS HOG THE SPOTLIGHT CLICK HERE
EUROPE BEFORE THE BELL: FUTURES FALTER AS TRUMP, JOBS DATA IN FOCUS CLICK HERE
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