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Good day, everyone! Hope you all had a great weekend and that you're ready to tackle the new week as we get things underway here in European trading. Markets are experiencing a lively start as risk-off sentiment dominates after Trump threatened China with more tariffs ahead of trade talks in Washington.
China has yet to respond in an official capacity just yet but market participants are feeling jittery and fearful of rising trade tensions, which has seen the Japanese yen gain notably in the currencies space. The dollar and franc are among the other beneficiaries while risk currencies are the laggards as a result.
With such a bombshell being dropped on markets as we begin the week, expect this to be a key focal point over the next few days alongside the RBA and RBNZ monetary policy decisions tomorrow and on Thursday respectively.
The only optimistic take on the whole situation here so far is that Trump's latest move is perhaps a mere negotiating/pressuring tactic on China, but if China decides to walk away from the negotiating table altogether, I would expect hopes of a global economic recovery to also nosedive alongside a trade deal.
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