Stock markets, bitcoin down as Trump policies roil markets
GLOBAL stock markets tumbled and the US dollar retreated on Friday (Mar 7) as uncertainty over US President Donald Trump’s trade policies roiled markets and traders awaited key US jobs data.
Bitcoin plunged as much as 5.7 per cent after Trump signed an executive order to establish a “Strategic Bitcoin Reserve” without planning any public purchases of the cryptocurrency.
The unit recovered somewhat to trade down around 1 per cent lower.
European and Asian equities were in the red despite Trump’s move on Thursday to delay tariffs on Canadian and Mexican goods covered under a North American trade agreement until Apr 2.
The halt offers temporary relief to automakers.
But Trump has said he will not modify broad tariffs for steel and aluminium imports, which are due to take effect next week.
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“Even though Donald Trump has made more goods exempt from tariffs on Canada and Mexico, it’s the constant tinkering that’s upset investors,” noted AJ Bell investment director Russ Mould.
“The fact that Trump keeps changing his mind confuses matters as companies have no idea what’s going on from one day to the next,” he added.
The euro continued to win strong support as a planned spike in Germany’s defence and infrastructure spending fuels inflation concerns and puts pressure on the European Central Bank to pause cuts to interest rates.
The ECB on Thursday reduced borrowing costs for a fifth meeting in a row amid a struggling eurozone economy.
There was brighter news on Friday, however, as official data showed the eurozone economy grew by 0.9 per cent last year, higher than thought.
German stocks receded on Friday after data showed that Germany’s industrial orders in January posted their biggest monthly fall in a year.
Investors were awaiting Friday’s US jobs report for February, a key indicator of the health of the world’s largest economy.
Weekly jobless claims figures released on Thursday were better than expected, while Wednesday’s private payroll report from ADP lagged estimates.
“Today’s US jobs report wraps up a week that has brought plenty of concern around the jobs market,” said Joshua Mahony, chief market analyst at Scope Markets.
He added that tariff threats and federal cutbacks are “adding up to provide a picture of economic weakness”.
Japan’s Nikkei shares index led losses in Asia, closing down more than 2 per cent.
Chinese markets, which had been riding a wave of stimulus-induced optimism, ended the week modestly lower.
Chinese stocks had jumped earlier in the week after Beijing announced a growth target of around 5 per cent at its annual meeting of the National People’s Congress.
China has vowed to make domestic demand its main economic driver despite facing persistent economic headwinds and an escalating trade war with the United States.
Foreign Minister Wang Yi on Friday warned that Beijing will “firmly counter” US pressure on trade.
“China-US economic and trade ties are mutual. If you choose to cooperate, you can achieve mutually beneficial and win-win results. If you use only pressure, China will firmly counter,” he said.
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