European equity markets dipped on the news, that tariffs will increase by 30%, effective 1st of August. The EU reacted by increasing efforts to negotiate a trade deal, with the USA, but quietly building a contingency plan. The EU are hoping for a trade deal, acceptable to both parties, but are preparing a response if this fails. The EU and Mexico follow Canada and an ever-increasing list of US trading partners, under the threat of punishing tariffs. The UK has a trade agreement in place and their own equity markets rallied. The US Dollar was on a tear, with the EUR falling to 1.1660, while the GBP crashed to 1.3430.The surge in the reserve impacted the recently resurgent commodity currencies, with the NZD surrendering 0.6000, while the AUD plunged to 0.6550. China did negotiate a trade agreement with the US and their trade surplus reflected this, with a big surge in both exports and imports. All eyes are on Chinese GDP, Retail Sales and Industrial Production, set to be released today.
