World markets are set to tumble, after a glimmer of hope revived optimism that the US–China trade conflict would calm. US markets rose yesterday, and European marketplaces also climbed. The Euro Stoxx 50 closed at 3’430 (+2.68%), the DAX surged by 2.90% (12’305) and other European exchanges rose by more than 2%. However, hope was short-lived as President Trump then ordered his US Trade Representative to consider another US$100 billion in tariffs against China. Meanwhile, trade data is disappointing. America’s February trade balance is USD -57.6 billion (previously -56.6 billion).
But employment might be a bright spot. March jobless claims were 215’000, down from February’s 229’000), and personal income and spending grew in February by 0.40% and 0.20%. March nonfarm payrolls may surprise to the upside of the expected 185’000, suggesting stronger wage growth in the month. The USD remains the strongest currency in morning session, suggesting that the EUR/USD pair at 1.2225 will decline, approaching strong resistance at 1.2167 and headed to 1.2215 in the short-term.
By Vincent Mivelaz