- European stocks and US futures are down after the Trump administration threatened to impose tariffs on $US11 billion in EU imports.
- The White House said the tariffs are a response to EU subsidies for Airbus, the archrival of troubled US aircraft maker Boeing.
- An ECB policy meeting, an EU summit on Brexit, and the US Federal Reserve’s release of the minutes from its March meeting are all scheduled for Wednesday.
American and European investors took cover after the Trump administration threatened to impose tariffs on $US11 billion in imports from the European Union, worsening an already tense backdrop for global trade.
The White House justified its decision to target products such as passenger helicopters, ski-suits, and various cheeses and wines by pointing to EU subsidies for Airbus, according to Bloomberg. The European aircraft maker is the archrival of US manufacturer Boeing, which continues to weather the fallout from two lethal plane crashes in less than five months.
A fresh batch of US tariffs could spark a multinational trade war. “Whilst at present it looks like a relatively contained problem…there is a risk of contagion if the EU decides to respond in kind,” said Neil Wilson, chief market analyst for Markets.com.
“Moreover, it will not do anything to improve business sentiment in the Eurozone, and we must assume that the [European Central Bank] will take a rather dim view of the situation with regards to the growth outlook.”
An ECB policy meeting, an EU summit on Brexit, and the US Federal Reserve’s release of the minutes from its March meeting are all scheduled for Wednesday.
“Investors are waiting cautiously on the sidelines, braced for key events lined up for later in the week,” said Jasper Lawler, head of research at London Capital Group.
Here’s the market roundup as of 9.20 a.m. (5.20 a.m. ET):
European markets opened flat with Germany’s DAX down 0.2% with a mixed picture from Europe’s other markets while Italy’s FTSE MIB is up 0.3%.
US stocks are set to open lower with Dow 30,S&P 500 and Nasdaq futures all down by more than 0.1%.
Asian stocks were broadly higher, with the SZSE Component and China A50 up 0.8%, Hong Kong’s Hang Seng index up 0.3%, and Japan’s Nikkei up 0.2%, although the Shanghai Composite closed down 0.2%.
Oil continued its recent good run with West Texas Intermediate (WTI) up 0.3% and Brent Crude up 0.2%.
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