Show less
Morning Call: Softer dollar boosts commodities, stocks
21 September 2018 at 7:40 GMT
Morning Call: Markets stabilise as trade tensions ease
20 September 2018 at 8:28 GMT
Morning Call: Chinese shares surge as trade war rages on
19 September 2018 at 8:36 GMT
Today’s FX chart analysis - video
John J Hardy
18 September 2018 at 10:28 GMT
Morning Call: Trump hits China with tariff plan
18 September 2018 at 7:29 GMT
The week ahead in macro
Kay Van-Petersen
17 September 2018 at 8:11 GMT
Macro Monday week 38: Keep Global Macro and Carry On
Kay Van-Petersen
17 September 2018 at 8:02 GMT
Morning Call: US yield curve lifts, boosting dollar
17 September 2018 at 7:23 GMT
Technical analysis webinar – A view of the market: Larsson
Kim Cramer Larsson
12 September 2018 at 14:44 GMT
Morning Call: Chinese shares fall further
11 September 2018 at 8:36 GMT
Morning Call: USD, SEK in focus
10 September 2018 at 7:49 GMT
The week ahead in macro
Kay Van-Petersen
10 September 2018 at 7:37 GMT
Morning Call: Is Japan next?
07 September 2018 at 7:35 GMT
Video / 02 March 2018 at 8:30 GMT

From the Floor: Trump's tariffs kick markets into risk-off

  • Trump promises tariffs – risk appetite hits the skids again
  • Equities hit hard but FX response is relatively muted
  • Canada looks to be the big loser, China not so much
  • Equities nosedive on US tariffs
  • Crude oil is range-bound; first monthly decline in six months
  • Speculation rising that gold has found an interim low

By Clare MacCarthy

Equity markets worldwide are reeling this morning after Donald Trump met a key pledge of his presidential election campaign by slapping tariffs on imported steel and aluminium in order to protect US domestic interests. From next week, US imports of steel will be hit with 25% tariffs while the rate for aluminium will be 10%.

"The reaction in FX is relatively muted," says John J Hardy, Saxo's head of forex strategy. While the US dollar isn't the centre of attention in this trade war, the Canadian dollar is exposed as the country's economy is virtually a satellite of its southern neighbour, he says. Japan's yen, meanwhile, has gained: "A fall in risk appetite globally almost always causes a stronger yen". 
The Trump news also sees EURUSD back in the range and as long as this momentum is maintained, bulls will likely be encouraged. That said, looming Eurropean risk events, including the Italian election at the weekend, are likely to make themselves felt into next week.

 Source: Saxo Bank

But it is equity markets that are bearing the brunt of Trump's trade war. "Europe and China have already responded that they will retaliate and the tariffs could boost inflation in some segments of the economy," says Peter Garnry, Saxo's head of equity strategy. Such spillover, he said, could affect manufacturers of cars, airplanes and drinks cans in the case of aluminium, while for steel construction industries would be exposed. On a promising note, however, Garnry notes that a 30% steel tariff imposed by former president George Bush back in 2002 was repealed only a year later following strong retaliation from US trade partners.

Finally today, crude oil is range-bound and on the defensive after posting its first monthly decline in the past six months. "US trade tariffs may raise the cost of US shale oil production while slowing growth due to higher transportation costs," says Ole Hansen, Saxo's head of commodity strategy.

 Protectionist-in-chief Donald Trump is putting US interests first. But this could backfire. 
Pic: mark reinstein /


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail