This is a game changer. The trade war is back on
Risk trades are getting beaten up on a surprise move by Donald Trump to announce an additional 10% tariff on all Chinese goods that haven't already been hit. This will go into effect on September 1 and it completely upends any progress on a deal.
Trump accompanied the announcement with some kinder words but actions speak much louder than tweets and I wouldn't be surprised if Beijing calls off future talks and retaliates.
USD/JPY may have sniffed something out earlier in the day. It's now down 120 pips on the day to 107.60 in a big outside day for the pair.
An early winner is gold as the market prices in more uncertainty and the potential for more easing from the Fed. Powell pretty much scripted what would be needed in order to get more cuts and Trump is delivering it.
The S&P 500 is down 11 points to 2968 after trading as high as 3013.
This is a game changer.
