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There was an air of caution to trading on Wall Street overnight as the legal woes of two of Trump’s ex-associates were laid bare. Whilst the Nasdaq moved higher, supported by a lift in tech stocks, the S&P struggled for direction despite marking the longest bull run in history. Meanwhile, the Dow closed lower, as US political risk and no news from the US – Sino trade talks pushed the index 0.3% into the red.
There has been a lot of negative news on Trump over the past 36 hours; the job of markets will now be to decide whether Trump can ride the storm, or whether the double blow is likely to damage the Republican Party’s election prospects at the midterms in November and result in the extension of a criminal investigation, which is already overshadowing Trump’s Presidency. The reality is that the market’s reaction so far has been limited and contained, suggesting that traders believe, at least for now, that Trump can move past this.
Dollar Shrugs Off Fed
The US dollar shrugged off the FOMC minutes which was marginally less hawkish than what the market had been expecting. Whilst the Fed remains upbeat over the assessment of the economy and sees more hikes coming, concerns over the potential impact of the trade war were stronger than expected, preventing the dollar from immediately moving higher.
Tariffs to Be Slapped on Despite Trade Talks?
US – Sino trade talks got underway again on Wednesday, as the two powers attempt to find a way out of their deepening trade conflict. In the first meeting between the two sides since June, there has still been no evidence that these mid-level talks will prevent a new round of trade tariffs from the US on Chinese goods due to take effect a from today.
EUR/USD slips below $1.16 ahead of ECB minutes
A weaker dollar over the past few sessions gave room for the euro to rally, pushing it a 2-week high of $1.16. With the ECB minutes due to
The minutes are from the ECB meeting in July, where the ECB continued to provide the same guidance
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