On Monday, the 6th of May 2019, a majority of European stock exchanges wrapped up the day in a negative territory, as US President Donald Trump’s comment on Sunday (May 5th) to hike tariff on Chinese exports this week had boorishly battered the market sentiment.
Apart from that, US President Donald Trump had also confirmed his firm stance on Chinese monetary policy reform on a Monday (May 6th) tweet, saying that he would no longer be tolerating a growing trade deficit with China.
Followed by the reveal of Trump’s tweet, European shares were pushed down further, as investors were seemed to be seeking safety on safe-haven shares in light of latest ignition of Sino-US trade conflict. Since Trump’s latest comment had entirely been controversial to his Friday’s speech, where he said that the trade talks with China had been going well.
However, questions had been raised on what could have changed in a day after US Treasury’s Mnuchin had said at an interview on Sunday (May 5th) that a trade deal could be hammered out as early as this weekend. Adding that the Chinese government would likely to prepare a retaliatory response to Trump’s threat, economists at UBS wrote on client notes, “These threats were exactly the opposite of his statements just last Friday, where he said that talks between Washington and Beijing to end the trade war were going ‘very well.
If the President follows through, the Chinese government will almost surely retaliate”. Followed by the reveal of escalating bitterness between US and China, trade-sensitive Frankfurt’s DAX had taken the worst-hit, as it fell more than 1 percent, while London’s FTSE 100 posted a gain of 0.40 percent, largely buoyed by an upbeat oil price and a weaker British currency. Meanwhile, after treading water for most part of the day, Paris’s CAC 40 had winded down the day flatlined.