FX Explained MacroWatch: w/c 26/08/19

Intermediate

Recap

  • Aggressive price action was seen on Friday 23rd August with China and principally the USA amplifying trade war pressures.
  • China retaliated Friday with tariffs on $75 billion of US goods and President Trump reacted by “ordering” US companies to NOT do business with China.
  • Then, just after US markets closed Friday, President Trump announced another 5% of tariffs on $250 billion of Chinese goods already being impacted, plus 5% more on the new tariffs due 1st September and 15th December.
  • This sent US and global stock averages significantly lower Friday, erasing gains seen throughout the week. It also produced a selloff in the US Dollar.
  • Safe havens, however, like US Government Bonds, the Japanese Yen and Gold all rallied.
  • The escalations in the trade war eclipsed the Fed Meeting Minutes from July, the Jackson Hole Economic Symposium and even the weekend’s G7 Meeting.
  • Trade war tensions remain in the spotlight into this week alongside the key data as below.
trade war

Key this week

Date Key Macroeconomic Events
26/08/19 UK Holiday markets closed; German IFO; US Capital Goods Orders
27/08/19 German GDP; US Consumer Confidence
28/08/19 German 10yr Bond Auction
29/08/19 German CPI & Unemployment; US GDP and PCE (QoQ)
30/08/19 US PCE (MoM and YoY)

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