New U.S. tariff threat on Chinese goods hits stocks, dollar

By Herbert Lash NEW YORK (Reuters) - A gauge of global equity markets eased and the dollar slipped on Monday as investors took a dim view of an expected new round of tariffs from Washington on Chinese goods, which would escalate a simmering U.S.-Sino dispute over trade. U.S. President Donald Trump said he would announce his latest plan on China tariffs after the markets close

Reuters September 18, 2018 02:05:21 IST
New U.S. tariff threat on Chinese goods hits stocks, dollar

New US tariff threat on Chinese goods hits stocks dollar

By Herbert Lash

NEW YORK (Reuters) - A gauge of global equity markets eased and the dollar slipped on Monday as investors took a dim view of an expected new round of tariffs from Washington on Chinese goods, which would escalate a simmering U.S.-Sino dispute over trade.

U.S. President Donald Trump said he would announce his latest plan on China tariffs after the markets close. He is expected to level them on about $200 billion of Chinese imports and China has said it would retaliate.

A weaker dollar lifted gold prices and the price of most industrial metals slipped as the tit-for-tat dispute has fuelled concerns that demand for metals will weaken.

Apple and Amazon.com bore the brunt of investor worries about the tariffs, which were on a list unveiled in July that included $200 billion worth of internet technology products, other electronics, printed circuit boards and consumer goods.

"Investors are slowly starting to realise that these new tariffs could be extremely disruptive to the supply chain," said Art Hogan, chief market strategist at B. Riley FBR in New York.

The trade tiff has yet to be felt in U.S. markets as the tariffs, which now are set at 3.8 percent, may rise to just 10 percent, which most companies can handle in a growing economy, said Brian Nick, chief investment strategist at said on Monday he would announce his latest plan on China tariffs after the markets close.MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 0.31 percent while the pan-European FTSEurofirst 300 index <.FTEU3> of leading regional shares closed up 0.07 percent.

On Wall Street, the Dow Jones Industrial Average <.DJI> fell 70.84 points, or 0.27 percent, to 26,083.83. The S&P 500 <.SPX> lost 13.33 points, or 0.46 percent, to 2,891.65 and the Nasdaq Composite <.IXIC> dropped 90.23 points, or 1.13 percent, to 7,919.82.

The dollar's weakening is a good sign for global markets, especially in emerging markets where the strong dollar has been a cause for concern, Nuveen's Nick said.

The greenback has benefited from safe-haven flows as the U.S.-Chinese trade conflict worsened.

The euro and sterling also advanced against the dollar on optimism that Britain would reach a deal with the European Union on the terms of its departure from the bloc.

The Spanish government and the EU's chief negotiator said they would stick to the current calendar that foresees finalising Brexit negotiations before the European summit in October.

The dollar index <.DXY> fell 0.44 percent and the euro rose 0.46 percent to $1.1681. The Japanese yen strengthened 0.18 percent versus the greenback at 111.84 per dollar.

U.S. Treasury yields rose across the board on growing expectations the Federal Reserve would raise interest rates in September and December, and perhaps at least twice more in 2019.

Yields on the 10-year U.S. Treasury note touched 3.022 percent, the highest level since late May. U.S. 30-year yields also hit a four-month peak of 3.159 percent, while 2-year yields soared to 2.799 percent, the strongest level in 10 years.

The benchmark U.S. 10-year note last fell 1/32 in price to yield 2.9977 percent.

Yields on 10-year German bunds rose to 0.472 percent, but pared losses to trade at 0.458 percent.

Oil prices edged lower on concerns over how the U.S.-Sino trade dispute may dent global crude demand, but losses were limited as the market weighed potential supply tightening due to Iran sanctions.

Brent crude futures fell 4 cents to settle at $78.05 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 8 cents to $68.91 a barrel.

U.S. gold futures for December delivery settled up $4.70 at $1,205.80 per ounce.

(Additional reporting by Helen Reid in LONDON, Divya Chowdhury in MUMBAI and Wayne Cole in SYDNEY; Reporting by Tommy Reggiori Wilkes; Editing by Gareth Jones and Nick Zieminski)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Apple will enable storage of IDs like drivers licenses on iPhones
Business

Apple will enable storage of IDs like drivers licenses on iPhones

By Stephen Nellis (Reuters) -Apple Inc on Monday said it will offer the ability to store state-issued identification cards digitally on iPhones and that it is working with the U.S. Transportation Security Administration to accept the digital IDs at airports, one of several updates to the software that runs on its devices. It also showed updates to its FaceTime video chat app, adding the ability to schedule calls with multiple attendees and making the software compatible with Android and Windows devices.

Airline bosses call on UK and U.S. to lift trans-Atlantic travel restrictions
Business

Airline bosses call on UK and U.S. to lift trans-Atlantic travel restrictions

LONDON (Reuters) - The bosses of all airlines flying passenger services between Britain and the United States called on Monday for the countries' governments to relax COVID-19 restrictions to reopen travel routes between the two countries. After more than a year of restrictions, the CEOs of American Airlines, IAG unit British Airways, Delta Air Lines, United Airlines and JetBlue Airways Corp said high vaccination rates in both countries meant travel could restart safely. The push for reopening trans-Atlantic routes on Monday comes ahead of meetings between U.S.

EU patience wearing thin with UK on N.Ireland, weighing options
Business

EU patience wearing thin with UK on N.Ireland, weighing options

BRUSSELS (Reuters) - The European Union's patience towards Britain over Brexit arrangements in Northern Ireland is wearing thin and the bloc will consider its options should Britain continue its "confrontational path", an EU official said on Monday.