Trinity Investments Limited – Asian Markets React to Possible $200 Billion in Tariffs From the US

HONG KONG - July 11, 2018 - PRLog -- Since our inception, our core values have not changed, however our technology and ability to operate within the markets has grown exponentially. We are focused on providing strategic and financial advice to private and corporate clients regarding wealth management, financial advisory services, mergers, acquisitions, sales, divestitures and private capital solutions.

As the continued tit for tat trade tariff argument between the US and China continues, Trinity looks at how the markets have reacted after the latest news that $200 billion more in tariffs could be scheduled for September.

A sell-off in Chinese markets knocked Asian stocks on Wednesday as U.S. threats of tariffs on an additional $200 billion worth of Chinese goods pushed the world's two biggest economies ever closer toward a full-scale trade war.

Washington proposed the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement, senior administration officials said on Tuesday.

The United States had just imposed tariffs on $34 billion worth of Chinese goods on Friday, drawing immediate retaliatory duties from Beijing on U.S. imports in the first shots of a heated trade war. U.S. President Donald Trump had warned then that his country may ultimately impose tariffs on more than $500 billion worth of Chinese imports - roughly the total amount of U.S. imports from China last year.

"With no early end appearing to be in sight for the escalating 'tit-for-tat' world trade frictions and rising trade protectionism, global trade wars have become one of the key downside risks to world growth and trade in the second half of 2018 and for 2019," said Andrew Halliday, Senior stock analyst at Trinity Investments.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.1 percent. The index had gained for the past two sessions, having enjoyed a lull from the trade war fears that lashed global markets last week.

Hong Kong's Hang Seng slid 1.65 percent and the Shanghai Composite Index dropped 1.8 percent.

S&P 500 and Dow futures were down 0.7 percent and 0.8 percent, respectively, pointing to a lower open for Wall Street later in the day.

South Korea's KOSPI lost 0.65 percent and Japan's Nikkei fell 1.4 percent.

"At the same time, the trade dispute can easily be blamed for a variety of ills. But it could mask over factors that could also weigh on equities in the longer run, such as tighter monetary policies led by the United States." Trinity said.

The yen, often sought in times of political tensions and market turmoil, gained against a number of peers.

The dollar traded at 111.06 yen, pulled back from a near two-month peak of 111.355.

The euro fell 0.15 percent to 130.23 yen and the Australian dollar lost 0.6 percent to 82.32 yen.

The Aussie, considered a liquid proxy for China-related trades, fell 0.6 percent against the dollar to $0.7414.

China's yuan lost 0.3 percent against the dollar and back towards an 11-month low plumbed last week.

The 10-year Treasury note yield fell 3 basis points to 2.841 percent, pulling back sharply from a one-week peak of 2.875 percent scaled the previous day.

Oil prices fell after the United States said it would consider requests from some countries to be exempted from sanctions it will put into effect in November that prevents Iran from exporting oil.

Brent crude futures lost 1 percent to $78.05 a barrel. Oil had risen the previous day, supported by a larger-than expected U.S. stock draw and supply concerns in Norway and Libya.

Copper on the London Metal Exchange sank roughly 3 percent to brush $6,092.50 per tonne, lowest since July 2017, before pulling back a little to $6,141.00.

It is a tentative time for global equities, should the trade war continue there will certainly be fallout on both sides and given the US reliance on Chinese goods, and the debt held by China on the USD Trinity expects that the bluster will die down before too much damage can be done on the markets.

To find out more information on which equities are best positioned to benefit from this situation, or to find out details on up and coming IPO's in the near future, contact one of our trusted advisors by visiting www.trinity-investments.com  or email us at info@trinity-investments.com and we will happily get back to you.