WASHINGTON, D.C. – Global stock market was rattled on Wednesday after US President Donald Trump stated that the trade deal with China has no deadline as of the moment.
Risk mood in the market has darkened following the recent statement from Trump, killing the hopes of market players that an agreement to ends the long-standing trade war between the US and China will not be finalized before the end of 2019.
Trump is currently visiting London for the NATO summit on its 17th anniversary, along with other world leaders. During one of his interviews while in London, Trump told reporters that the partial agreement for the trade dispute between the US and China has no deadline, hinting that he will not sign any deal until after the presidential election in 2020.
The comment that was given by Wilbur Ross, US Commerce Secretary, further raised the concerns of market players. Ross told during an interview on Tuesday that there aren’t any scheduled high-level talks between Washington and Beijing. He also confirmed the December 15 tariffs on Chinese goods that has the market on edge for weeks, unless the two governments reached significant progress on trade talks.
Last week, the risk appetite in the market had been running high. But with the negative developments on trade talks, the sell-off in risk assets have deepened since early this week and is even worsening for today’s trade session.
The dwindling chances that a trade deal will be reached in 2019 have knocked down equities from its previous record highs. Stocks on Wall Street started falling sharply, marking its second day of losses on Wednesday. The Asian stock market has also extended its declines today. However, equity futures in the US and Europe are pointing to some sell-off easing.
In the currency front, the US dollar has dipped towards 108.41 against the Japanese yen, recording its two-week lows. The dollar is also on its one-month low against the Swiss franc at 0.9852.
On the other hand, the euro proved to be a lot firmer over the $1.1080 levels, boosted by the optimistic revisions of the final PMI data for November in the Eurozone. The Sterling has also performed well at $1.3044, marking its 7-month record high as market investors grow increasingly confident on the Conservatives winning the majority at the general election set for a little over a week from now.
However, the antipodean currencies were the worst performers in today’s session. The Australian dollar recorded a 0.4% drop, while the New Zealand dollar slipped by 0.2%.