Trade concerns are weighing on global risk markets again this morning and sparking a bid for Treasuries. All major overseas equity indices are lower (Nikkei -0.79%, Hang Seng -1.29%, Euro Stoxx -1.10%), and S&P 500 futures are currently down 13 points. The lead headline in financial markets today involves U.S. plans to restrict Chinese investments in American companies, which are expected to be announced later this week. Such restrictions have been known to be part of the Trump administration’s plans for quite some time, but the initial perception/reaction is an escalation of already heightened trade tensions between China and the United States. In a separate (but likely related) move, the Chinese government is cutting its required reserve ratio for banks by 50 bps, which is also contributing to today’s risk-off move in the markets. This week’s economic calendar is headlined by the durable goods orders report on Wednesday and PCE on Friday (both for May). Multiple Fed leaders are scheduled to speak this week, including Randal Quarles speaking on bank regulation Wednesday.
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