Slaughter on the financial markets of Asia. Investors bet that a recession is getting closer after the customs duties called “medicines” by Donald Trump
The main stock indices in Asia have registered significant decreases on Monday, as the White House officials have not signs that they will give up their extensive customs taxation plans, and investors have bet on the fact that the increasing risk of recession could lead to a reduction of interest rates in the USA since May, Reuters reports.
The carnage on the markets took place while President Donald Trump told reporters that investors will have to take his medicine and that he will conclude an agreement with China until the US commercial deficit will be resolved.
Beijing said the markets were pronounced on their reprisal plans.
“The only stop mechanism is President Trump's iPhone, and it gives little signs that the market collapses are sufficient to reconsider a political position in which it has believed for decades,” said Sean Callow, Senior FX analyst at ITC Markets in Sydney.
Customs taxes are “medicines”, says Trump
Donald Trump said foreign governments should pay “a lot of money” to pick up radical customs taxes that he characterized as “drugs”, notes The Guardian.
Speaking with reporters on Air Force One at the end of Sunday, the US president indicated that he is not worried about the market losses that have already deleted nearly $ 6 billion. “I don't want anything to fall. But sometimes you have to take medicines to solve something,” he said.
The markets are preparing for a new volatile week, as Trump's most punitive customs duties come into force.
The Nikkei 225 reference index in Japan decreased by almost 9% in the first trading sessions, while concerns about a global recession induced by Trump's rates continued to affect markets.
The Nikkei index decreased by up to 8.8%, reaching 30,792.74 for the first time in October 2023. Japanese Prime Minister Shigeru Ishiba said Monday that his government will continue to ask Trump to reduce customs duties, but said that the results “will not come”.
Actions crashed into China and Hong Knong
“As such, the government must take all the means available” to limit the economic impact on Japan, including providing financial support for national companies and taking measures to protect jobs, he said in Parliament.
The shares of Hong Kong and China crashed, the Hang Seng Index in Hong Kong decreasing by 8% in the first transactions. The actions of Chinese technological giants Alibaba and Tencent decreased by more than 8%.
In South Korea, trading on the Kosppi index was interrupted for five minutes at 9.12, while the actions decreased vertiginously.
The Taiwan scholarship decreased by almost 10% at the opening of Monday, the first trading day since announcing customs duties, due to a two -day holiday last week.
The decreases were determined by TSMC and Foxconn and marked the highest punctual and percentage loss registered in a single day, according to the local press.
The price of the oil barrel, declining
Australian actions were also strongly decreasing, with more than $ 160 billion deleted from markets in the first trading sessions.
Investors believed that the loss of thousands of billions of dollars and the probable blow to the economy would cause Trump to reconsider their plans.
“The dimension and disturbing impact of US trade policies, if supported, would be sufficient to make a still healthy expansion in the US and worldwide,” said Bruce Kasman, head of the JPMorgan Economic Department, estimating the risk of 60%.
The European markets are also declining, and the US dollar suffers, being quoted at 0.91 euros.
The more dark prospects regarding global growth have maintained oil prices under a strong pressure, after the steep losses last week.
Brent oil dropped by $ 1.35 reaching $ 64.23 per barrel, while US oil dropped by $ 1.39 to $ 60.60 per barrel.
