European markets are trading in the red early in the session on Thursday, with the FTSE 100 the only major index in the green, supported by weakness in the pound after the release of some more disappointing data for the UK.
It’s been a more positive start to trade on Thursday, with equity markets in the green and paring Wednesday’s losses as investors continue to weigh up what impact the latest trade tariffs will have on the global economy. While markets have typically reacted negatively to any escalation on trade, the overall impact has been relatively modest under the circumstances that suggest investors are far from panic mode right now.
Financial markets are once again in risk aversion mode on Wednesday, as investors continue to take shelter from the ongoing trade spat. There hasn’t been much progress – positive or negative – in recent days although U.S. Treasury Secretary Steve Mnuchin did deny reports that the country is looking to block investment from China in U.S. tech, instead claiming there will be a statement aimed at all countries trying to steal technology.
The week started with the US and China announcing tariffs against one another which will come into effect on 6 July, and it will end with the European Union announcing counter-tariffs against the world’s largest economy in response to those already imposed. While much of what has been announced this week was already anticipated, the rhetoric between these huge trading partners is heating up and that’s a major concern for investors.
The mood in financial markets is relatively upbeat at the start of a very busy week, as investors shrug off the G7 meeting that didn’t exactly go to plan as President Donald Trump rejected the prepared communique and left early.