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Global markets took a shot to the gut As the month kicked off with an escalation in the US-China trade war. While markets were anticipating another stalled resolution to the trade negotiations none expected the US president to impose a 10% tariff on further $300 billion worth of Chinese goods. To this China hit back hard in two ways. Firstly China allowed its currency relative to the US dollar to fall to the lowest level in a decade which mitigated the intended impact of the previously imposed US tariffs as it made exports to the US more affordable. Read the full article
Global markets started the month on a positive note. As the US and China agreed to resume trade talks along with no new tariffs increases and for the US to ease previously imposed restrictions on Huawei. This was short lived as the US proposed increased tariffs towards the middle of the month, further exasperating already elevated levels of geopolitical tension amid deteriorating global trade. While central banks have adopted a dovish approach to interest rates in order to stimulate growth, the effects of the global risk off environment which ensued, could not be completely mitigated. Read the full article