Signs of risk aversion are everywhere. With a mixed read from Asia equities, FX and bonds mirror investors’ worries. CNY and TRY lost ground against the safe haven USD, thanks to trade concerns. China’s service sectors expanded in July, yet pessimistic trading focused on Beijing’s threat to retaliate should Washington raise tariffs to 25% from 10% on $200 billion on Chinese imports. European peripheral yields spiralled higher, while GBP was damaged by Brexit uncertainty and a dovish Bank of England rate hike. Apple closing above USD 1 trillion market cap and Tesla’s rally has supported stocks prices. All told: global growth remains solid; risk off trading should be transitory. But investors dislike volatility.
By Peter Rosenstreich
