US equities lost further ground and heads toward technical correction territory. The growing fears over global trade wars are growing by the day. The Trump administration appears to be particularly focused on Canada, with a tit-for-tat trade war going on. The latest escalation, came in the form of a doubling of US tariffs on Canadian Aluminium and Steel, from 25% to 50%. Canada is severely trade-dependent on the US and have taken the wrong approach, deciding on a war-of-words and responding with tariffs of their own. Negotiation would certainly been the better course of action. The US will not need any surprises from the inflation data released tonight, which is expected to show inflation softening. The EUR surged through 1.0900, while the GBP regained 1.2900, keeping below the parapets.The huge losses on equity markets, are a reflection of the fears of the economic impact, of a growing global trade war. The AUD reflected the vulnerable nature of a trade dependent commodity currency, holding below 0.6300, while the NZD dipped below 0.5700. Market attention will turn to US inflation data, set to be released tonight, but tariffs continue to dominate market volatility.
