Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Trade escalation returns

Just as we were about to conclude the week with the biggest event of the week, the Fed FOMC meeting, having passed, it appears that US-China trade tensions returned to take over the spotlight.

Source: Bloomberg

Risk-off markets on fresh tariffs threat

The abrupt arrival of President Donald Trump’s latest tariffs threat just off the heels of the first face-to-face US-China meeting post the June G20 trade truce had been the latest alarming development for markets. For fear of sounding like a broken record, the US-China trade issue evidently remains a key concern for markets. Just as we have cheered the improvement in situation from the May tariffs exchanges, President Donald Trump’s return to brandishing a 10% tariffs on $300 billion of Chinese imports threat reflects the lack of progress. This lends little weight to the talks that had been concluded to be ‘frank, efficient and constructive’. It also potentially marks another prolonged period of heightened risk sentiment for markets that could trip the recent rally over, one to watch.

Following the greenback rally on the back of July’s Federal Open Market Committee (FOMC) meeting, USD/JPY (大口) as the risk barometer had certainly registered the sharp turn in market sentiment, falling past $107.50 into Friday. Look to a clear break of the $107.00 level that could invite further selling for the pair.

Source: IG Charts

Sharp declines for Asia markets

Likewise, for Asia markets, the US-China trade issue lies at the heart of market concerns. The sudden turn in development for the negative may have a lingering impact for Asia markets. While past iterations of tariffs commencement had been rather fluid from President Donald Trump, the latest September 1 start date may be a limitation for positive developments with the next US-China meeting set only then. This latest souring of relations could continue to weigh on Asia markets in the short-term, thereby giving us a downward bias for the region, one to watch.

All eyes will be on the non-farm payrolls for Friday, but prior to which, any form of retaliation from China could further invoke concerns and market reactions. The local Straits Times Index, with the break of the 3300 level yesterday, will continue forming the short-term downtrend. Positive earnings performance from OCBC and UOB may help to offset some of the gloom, but amid the latest US-China trade tension escalation, it is downwards where we will be headed into the end of the week.

Source: IG Charts

Yesterday: S&P 500 -0.90%; DJIA -1.05%; DAX +0.53%; FTSE -0.03%


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.