MARKET COMMENTARY

US markets opened the week badly, with equities in a freefall, fuelled by the fears of a growing, global trade war. China acted against Canada and imposed severe, targeted tariffs on selected Canadian products. This is outside the US tariff war, that is impacting Canada so harshly and added to fears of a trade induced economic collapse. Europe is faring little better, as a tariff war will be catastrophic to an already deeply recessionary economic zone. The EU answer is to borrow a further EUR$800 Billion to build up military production. The economic events unsettling markets are likely to continue, until the trade wars are settled and agreements are reached with the Trump administration. The US Dollar was relatively stable, with the EUR holding 1.0800, while the GBP dipped back below 1.2900.

The highly disruptive trade wars are doing little to assist the vulnerable trade exposed commodity currencies, with the AUD surrendering 0.6300, while the NZD struggles to hold 0.5700. Markets will continue to focus on trade wars and the Geo-Political developments in the Ukraine war.