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Donald Trump’s tariffs trembled the markets on Monday, with the US dollar rose, the Asian markets fell and the US shares as investors assess how the taxes will influence the largest trading partners in America.
The US dollar rose more than 1 percent compared to a currency basket and sent the Canadian dollar to $ 1.473 C – the lowest level since 2003. 1 percent fell.
The US stocks also fell strongly, and contracts pursued the Benchmark S&P 500 by 1.7 percent and those who pursue the Nasdaq 100 gliding of 2.3 percent. The European futures also fell 2.6 percent with the Euro Stoxx.
Trump admitted in a post about the social truth, his social network, that “maybe” would “perhaps” some pain from his tariffs. “But… Everything will be worth the price that has to be paid,” he wrote on Sunday.
The two-year treasury return in the United States rose by 0.05 percentage points to 4.25 percent, while the 10-year yield decreased by 0.02 percentage points to 4.52 percent.
The Japanese stocks slipped in Asia. The export loading Nikkei 225 fell by 2.4 percent, while the Topix fell by 1.9 percent. The yen weakened by $ 0.2 percent compared to the dollar to $ 155.5 yen.
China’s offshore -Renminbi, which is free, slipped by up to 0.7 percent to $ 7.37 per dollar on Monday morning. Hong Kong’s Hang Seng Index decreased by 1.8 percent and led by Chinese companies listed in the territory. The stock market of mainland China is closed until Wednesday.
The South Korean Kospi -Benchmark shed 2.2 percent and the Won fell by $ 0.9 percent compared to $ 1,468.8. In Australia, the S&P/ASX 200 index fell by up to 2 percent.
Weaker currencies can help compensate for some of the effects of the tariffs.
“There were some optimism on the market that only existed for negotiations, but the market may have underestimated the determination of the Trump administration,” said Jason Lui, head of the Asian-Pacific stocks and derivative strategy at BNP Paribas.
The steep declines came after Trump 25 percent tariffs for all imports from Mexico and Canada on Saturday, with a levy of 10 percent for Canadian energy and new 10 percent tariffs for imports from China. He also threatened taxes against the EU last week.
Economists warned that tariffs will probably accelerate inflation in the United States, which, after Trump’s election in November, increases the returns and the dollar the financial return.
“The clearest implication is a stronger dollar,” said Eric Winograd, chief economist at Alliancebernstein. “A long dollar position is the cleanest and clearest expression of the trade war, which is now being launched.”
“The currencies that will suffer the most are those against which the tariffs are imposed,” added Winograd and found that “there is a good case that the stock market will suffer a little”.
Oil prices also rose in early Asian trade, with the international benchmark Brent increasing by 0.6 percent at $ 76.13 per barrel.
George Saravelos from Deutsche Bank said that the tariff announcements are “at the most Hawkish end of the protectorist spectrum that we can imagine” and the markets that were necessary for the “structural and significant repetition of the trade war premium”.
The Mexican peso has been played in the past few weeks because the retailers examined the announcements of the new Trump government for how quickly and how extensive new taxes would be.
“If the tariff stays involved for several months, the exchange rate will reach new historical highs,” said Gabriela Siller, chief economist of the Banco base Mexico and referred to the number of pesos per dollar. “If the tariff stays on it, Mexico will be a structural change. . . And Mexico could get into a profound recession that would take years to get out. “
