The stock markets shivered on Friday as the trade war between the United States and China continued to degenerate.
The Stoxx Europe 600 index slipped approximately 1% after China has increased its tariffs on American imports to 125%. The term exchanges suggest that the S&P 500 index should open slightly, reversing previous losses, at the end of an extremely volatile week.
Markets around the world have suddenly turned between important gains and losses in the midst of the bustle and confusion caused by President Trump’s statements on prices.
Beijing’s latest tariff reprisals occurred after the markets are closed in Asia. During the negotiation session on Friday, Hong Kong shares increased by 1.6%, shares in continental China increased by 0.4%and those of Taiwan by 2.8%. But the Nikkei 225 of Japan dropped by 2.9%, catching up with the drop in Wall Street the day before.
Throughout the week, the markets were whipped by the variable intensity and the focus of Mr. Trump’s trade policy. “Steep reciprocal prices” were imposed in dozens of countries, then, a few hours later, took a break for 90 days. At the same time, Washington and Beijing have accelerated prices on goods exchanged between countries.
On Thursday, the S&P 500 index dropped by 3.5% after the Trump administration said that the prices on Chinese imports were a total of 145%, not 125% as it said the day before.
The typical days of negotiations, the stock market indices displayed modest gains or losses, but during last week, the S&P 500 index underwent some of its most steep drops as well as its biggest day since the 2000s.
This week, the VIX index, a volatility measure known as Gauge for fear of Wall Street, reached the levels visible for the last time at the start of the coronavirus pandemic in March 2020.
The turmoil has spread in a wide range of assets. US Treasury bills, which tend to be considered a paradise during troubles, have lost the value, which has grown higher yields. A sale of bonds occurring at the same time as the drop in stocks and the US dollar has perplex traders and analysts. Certain speculations have focused on the question of whether the heavy losses on the stock market have led investors to sell their bond assets, or if a foreign central bank sells American assets.
Friday, the yield of the 10 -year -old American treasury was greater than 4.4%, the highest since February. The value of the dollar, measured by an index that follows the currency against the big peers, fell by more than 1.4%, at its lowest level in about 3 years.
