The markets open and it's immediately stormy. The Chinese currency, lo yuan, opens down 0,8%, to 7,14 against the dollar, extending the losses of August (-3,7%) and slipping at its lowest since February 2008.
The fall of the Stock Exchanges was even heavier, in line with the thud recorded by Wall Street on Friday (S&P -2,6%, Nasdaq -3,2%). Tokyo, despite the announcement of a forthcoming trade agreement with Washington, loses 2,5%; the Korean index retreats by 1,6% e Chinese price lists they go down by 1,2%. Hong Kong, the worst, retreated by 3% at the sound of the bullets fired for the first time by the police at the demonstrators.
But to cause the drop is the air of total clash on the trades of the two giants. on Friday Beijing raised tariffs by 10% on US imported goods for 75 billion. Donald Trump's furious reply that he not only raised tariffs (from 25 to 30% on goods for 250 billion dollars and from 10 to 15% on other imports for 300 billion) but, dusting off an old law (never used) warned US companies not to do business with China. The threat seemed to have subsided on Sunday morning, on the basis of an ambiguous declaration by the US president in Biarritz, during the G7, but the hypothesis soon subsided. “I only regret – roared Trump – that I did not raise tariffs more”.
In this frame the effect of the words of Jerome Powell in Jackson Hole: the chairman of the Fed had hinted that the central bank would support the economic situation, however under control. Too little for Trump, who controversially asked himself: "But is my worst enemy President Xi or Powell?".
Today the G7 in Biarritz it will close without a final joint statement, just to avoid the risk of a final surprise from the US president. The coup de théatre was reserved by the French president Emmanuel Macron, inviting a surprise to the Basque city Iranian Foreign Minister Mohammad Javad Zarif, and announcing that on behalf of the G7 he would promote a political initiative towards Iran to ease tensions. But Trump reacted with a cold "no comment". Some Iranian officials have reported that Tehran will increase oil exports - 700.000 barrels a day - if the West is willing to negotiate to save the nuclear deal. The UN report on Iranian nuclear power is expected on Thursday.
The G7 powers would be close to an agreement for fight fires in the Amazon and help affected statesMacron said.
During a meeting with EU Council President Donald Tusk on the sidelines of the G7 in Biarritz, Boris Johnson reiterated that the United Kingdom will leave the EU on 31 October whatever happens, but he said he was optimistic about the possibility of a new agreement, which, according to the premier, will depend on the EU.
Tomorrow Jeremy Corbyn meets MPs who want to avoid a no-deal Brexit. According to The Observer, Johnson would have asked for legal advice to evaluate an extraordinary closure of Parliament for 5 weeks, thus preventing MPs from discussing Brexit to avoid further delays.
Thus a day of high tension is looming on all markets.
It strengthens the yen, Asia's safe haven currency at 105,24 against the dollar before slowing after the words of Chinese Vice President Jiu He, who has just said that the escalation does not bring anything good to China and the United States, the way is another . "We are ready to solve problems through dialogue and cooperation, with due calm".
THEgold it moved to a 6-year high at $1.545, +1%, from +1,9% on Friday.
They curb the yields of T-bonds: the 1,46-year bond trades this morning at XNUMX%.
Weak futures on actions: S&P –0,8%
Down also the Petroleum: Brent loses 1,1% to 58,8 dollars a barrel, Wti -1,4%.
THEeuro traded this morning at 1,1045 against the dollar.
In this climate, the tribulation unfolds negotiation between Pd and Cinque Stelle on the formation of the new government. Tomorrow the deadline granted by the President of the Republic Sergio Mattarella to the parties to find an agreement will expire, as an alternative to the scenario of a return to the polls, not particularly welcome by the markets.
Il Tesoro will offer 6 billion Bots over 6 months in the August 28 auction. The Minister of Economy Giovanni Tria he instilled a note of optimism on the public finances: "it is possible to defuse the VAT increase – he said in an interview". Thanks to the savings recorded especially in terms of interest on debt (and not only).
Back to filling up the macroeconomic agenda. Data on the turnover of services in the second quarter, that on consumer confidence in July and that on turnover and orders from industry as well as data on employment in July will arrive from Istat this week.
Headlights on today on new reading of US GDP in the second quarter, with a possible slowdown compared to preliminary estimates (+2,1%), which could give new ideas to US President Donald Trump to urge the Fed to cut rates again.
Also to follow are durable goods orders, economic activity in the Chicago area, and manufacturing activity in the Dallas area.
The data on trade with China is also significant on a psychological level: a deficit of 29-30 billion dollars is expected.
In Europe, the most important data of the morning concerns the ifo, the German confidence index.
Tomorrow the numbers of the German GDP of the second quarter. Latest quarterly reports arriving on the US Stock Exchange. Issues of Best Buy and Dollar Tree will come out. To follow the final balance of Tiffany.
