Stocks and metals under pressure as new US tariffs unveiled

Summary:

• Stocks fall as US announce 25% tariffs on China 
• DE30 and UK100 amongst the biggest fallers
• Precious metals also decline; US data mixed
• Crypto set to end back week in the red

Trade tensions between the world’s two largest economies have ratcheted up further today with the US announcing new tariffs on $50B in imports from China. The levies are expected to take effect within a few days and will likely see Beijing reciprocate in the not too distant future. China’s Commerce Minister has wasted no time in offering his opinion saying that he firmly objects US trade measures announced by Trump towards China, and that he will retaliate at a similar size.

The US indices are lower on the day by the European close, but perhaps a little surprisingly there’s been larger declines in the DE30 and the UK100. Both these indices have handed back a fair chunk of Thursday’s ECB inspired gains and the UK100 is actually lower than yesterday;s low at the time of writing. 

The final US data of the week has come out in a mixed fashion with industrial production unexpectedly declining for the month of May but the latest Uni Mich survey beating forecasts. First off lets, look at the industrial figures which came in surprisingly weak at -0.1% vs +0.2% expected. A notable upwards revision to the prior reading which now stands at 0.9% from 0.7% previously takes the edge off the negativity of the print. Taking a longer term view the year-on-year reading appears to have flat-lined of late and it remains well below the ISM manufacturing number. 

It’s been a bad week for crypto bulls with some major declines seen in all the markets. The capitalization of the whole market still sits well below the $300 billions yet it managed to climb back above the $280 billion mark. Some analysts claim that the latest slump in Bitcoin price that turned out to be short-term trend for the whole market could have been caused by the expiration of Bitcoin futures.