US Equity markets resumed the sell-off, moving into a technical correction territory, triggered by fears the global tariff war may drive the US economy into a recession. The spark overnight was from Europe, where the Trump Administration appear to have turned their attention to, threatening a 200% tariff on European wines and spirits. The Europeans will not appreciate the attention and have threatened a response. The short-term damage will temporary, and these trade issues will be resolved, while the underlying political pressure will drive change. The US Dollar gained ground overnight, with the EUR slipping back below 1.0900, while the GBP fell to 1.2940.The AUD surrendered 0.6300, once again, as they get dragged into the global trade wars. The Australian Government is finding it difficult to negotiate, or even be heard in Washington, as Australian Labor Politicians pay the price for damaging criticisms of President Trump. The trade dependent commodity currencies remain extremely vulnerable, and the NZD may struggle to hold 0.5700.
