Headlines:
Markets:
- WTI crude (June contract) up 3% to $104.20, Brent crude up 2.4% to $108.30
- 10-year Treasury yields hit one-year high of 4.54%
- S&P 500 futures down by 1.1% as equities slump
- Major indices in Europe down between 1.5% to 2.0%
- USD leads, AUD and NZD lag on the day
- Gold down over 2% to $4,548, Silver down over 6% to near $78
So, Trump’s visit to Beijing has come to an end with it being rather uneventful to say the least.
If market players were hoping for some breakthrough on trade or at least perhaps some hope that China might offer to help with the Iran situation, then they will be left disappointed.
In contrast to his previous meetings, there was no big victory shout by Trump this time around. That just reaffirms the nature of the meeting between the two leaders this week.
It was mostly to reaffirm a more stable relationship between the two sides during a time of economic turbulence. That especially after the tariffs war last year.
China’s main focus was on Taiwan, while the US focused more on trade and business/investment ties. So, that in itself already set the tone for how both sides approached and left the meeting with nothing much to show for in the end.
Trump offered no promises on Taiwan and China offered up no promises on helping with the Iran situation. And on trade, we have the usual gestures of goodwill set to follow but that will mostly be just to tie a pretty ribbon on the meeting this week. It won’t extend beyond that.
As such, markets are not feeling too optimistic as the US-Iran conflict drags on for yet another week now. The Beijing distraction certainly didn’t help as it just meant no further progress on the events in the Middle East.
Oil prices ramped higher with Treasury yields also seen breaking out to fresh highs in the final stretch of the week. WTI crude (June contract) is up 3% to $104.20 while 10-year Treasury yields hit one-year highs of 4.54%. Even 2-year Treasury yields are up nearly 9 bps to 4.11% – its highest since March last year.
In turn, equities are slumping hard with major indices in Europe down around 1.5% to 2.0% on the day. Meanwhile, S&P 500 futures are down 1.1% and Nasdaq futures down 1.5% in threatening to wipe out gains for the week.
In the major currencies space, the dollar is the one leading the charge with EUR/USD down 0.4% to 1.1625 and GBP/USD down 0.4% to 1.3350 on the day. Meanwhile, AUD/USD is down 1% to 0.7150 amid the more risk-off sweep across markets.
Looking over to precious metals, it’s a rough day too with gold down over 2% to $4,548 and silver down over 6% to near $78 currently.