Trump has threatened to take action on China with new tariffs, which did shake the markets overnight.
The U.S. President wants an inquiry into China’s role in the origin and spread of the coronavirus. Comments from him overnight on China shows his growing frustration with the country over the pandemic. He says he was confident the virus originated in a Chinese lab.
Trump told reporters:
We signed a trade deal where they’re supposed to buy, and they’ve been buying a lot, actually. But that now becomes secondary to what took place with the virus. The virus situation is just not acceptable.
In our view, Trump sees the risks also to his re-election chances, given the damages caused by Covid-19. It has cost many lives and jobs in the country, the total number of first-time claims has surged now to 30.3 million over the past six weeks — representing roughly 18.6% of the US labor force.
What does this mean for the markets?
In a previous article, we did note of the risks, in terms of a U.S. and China trade war returning back to focus. Overnight, AUD and NZD have been hit quite hard, given their trade ties with China. Stocks globally have been hit hard on these risks, given their exposures to Chinese trade.
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