(22 MARCH 2018)DAILY MARKET BRIEF 2:Trump “fly by policy” strokes trade war fears
Markets are once again bracing for US Trump trade policy “on the fly”. With Rex Tillerson out of the way, Larry Kudlow supporting punitive actions against China and Peter Novara and Wilder Ross steady daring Trump on just about anything could happen today. White House officials indicate that Trump will announce tariffs on Chinese imports this afternoon. The objective according to now turned narrative it Trump titter policy is aimed at curbing theft of US technology. There has been limited indications on size and scope of the tariffs, which indicated in our view a making it up as he goes strategy. We find it hard to think of any actions that accomplish the desired effect.
However, most likely triggering rapid and possible more influential retaliations actions. We doubt Beijing will sit quietly this time around which has significantly increased the risk of a global trade war. USD remains sensitive to protectionism actions, indicated the greenback will unlikely walkway from this one unscathed. Should Trump announced a significant escalations we would rotated into European G10 (SEK, NOK and CHF). Higher US yields have not support USD and unlikely to protect from geopolitical tensions.
By Peter Rosenstreich
