Trump's tweets trouble markets - Bank of Ireland Corporate

Donald Trump’s tariff tweets troubled markets yesterday – the US President threatened to impose a 25% tariff on all goods imports from China – with US and European equity markets losing ground (albeit they closed off their lows) and bond yields in the core markets falling (10-year yields in the US are below 2.5% again). There wasn’t, though, much change in the major currency pairs, with the euro hovering around the $1.12 level against the dollar having nudged higher on Friday. Sterling was generally weaker yesterday, losing ground to the euro and the dollar

Despite Trump’s threats, it looks like US-China trade talks will still go ahead at the end of this week as planned, which will provided some reassurance for markets, while another set of talks – those between the Conservatives and Labour regarding Brexit – will formally resume this week

Employment in the US rose strongly in April according to Friday’s payrolls report, increasing by 263,000 from March, and the unemployment rate fell to a fresh cycle low of 3.6%, while annual earning growth remained at 3.2%

The services PMI for the Euro area dipped in April to stand at 52.8, broadly in line with its average level in the first quarter of this year (though the PMIs generally tended to underestimate the strength of economic growth in the zone in Q1)

The main data releases this week come on Friday, with UK GDP for the first quarter of this year and the April CPI in the US both scheduled for release