The dark clouds surrounding markets aren’t going disperse just yet
Risk assets aren’t seeing a reprieve for the time being and may not have good reason to do so until we measure up how China will respond to Trump’s latest tariffs announcement.
If anything else, the latest move by Trump casts heavy doubt about the proposed meeting in September and we could yet enter another “cold war” period between the two countries like what we saw prior to the Osaka meeting.
Should that be the case and China call off the meeting, expect risk assets to take another hit with haven flows set to build on overnight gains amid fears that the trade war is not headed for any form of resolution.
Not like it ever was anyway but at least talks gave the illusion that there was progress.