How are global markets performing amid trade war concerns?

CGTN Europe

CGTN Europe interviewed iona Cincotta, Analyst, City Index

Transcript

00:00down to rate decisions and how much to the threat of tariffs?

00:05Yes, so you know I think we did see a rally in the US stock markets yesterday

00:09and a lot of that

00:12was down to what we heard

00:16Federal Reserve Chair Jerome Powell

00:20saying as far as the the outlook of

00:28well the uncertainty he mentioned but I think

00:32I think the the fact that the Fed was sticking with the the two

00:35expected rate cuts this year really did give a bit of a boost

00:39to the markets which have fallen really sharply over the past couple of weeks

00:43now we've seen the Nasdaq down over 10 percent from its recent

00:47record high the S&P as well but we have seen a little bit of a

00:50recovery as I said yesterday we're seeing that slight recovery again today

00:55but it does look like it's potentially losing a bit of steam and the reason for

00:59that is because those concerns over Trump's trade tariffs remain you know

01:04the Federal Reserve really highlighted the

01:07level of uncertainty that there is regarding the outlook

01:12with the outlook because of Trump's

01:15trade tariffs and that is being reflected in the

01:17market so I think in order really for the markets to really push higher and

01:21for sentiment to improve we would probably need

01:28to see a pivot either from President Trump

01:33or from the Federal Reserve and we're not seeing either of those

01:40right just now. So on

01:44uncertainty you mentioned it twice we're hearing a lot of that word aren't we is

01:48that why gold has hit a record high? Exactly you know gold it's the safe

01:54haven asset of choice it's the asset that

01:58investors tend to buy into when they're concerned

02:01about the geopolitical outlook about the economic outlook

02:05because it tends to perform well in those uncertain

02:09times and as a result we've seen investors drive into

02:13dive into the precious metal pushing it up to

02:16over $3,050 the ounce as it's sort of you know has seen record

02:22high after record high this year it's up over 15%

02:25so far this year alone so very strong rally in gold

02:29also the fact that we've seen a weaker US dollar that also helps gold which is

02:33a denominator in US dollars so when there's a weaker

02:40US dollar that does make gold

02:45more or rise as well. Well let's talk about that US

02:52dollar because it's near five

02:56month lows at the moment isn't it why is that what's going on?

03:00Yeah so that's really interesting because what we're seeing here is this

03:03sort of sellout for of US assets so we've seen it not

03:07only in the US equities market which as I

03:10said you know we've seen fall very sharply over the past few weeks

03:13but we've also seen that sell-off in the US dollar and that's quite unusual to

03:17see the sell-off in US equities and US

03:19dollar at the same time because the US dollar is also considered a safe haven

03:24but because of these trump tariff concerns because of fears over the

03:28economic outlook for the US and the prospect of a slowdown

03:32that's actually weighed on the US dollar at the same time you know we've got the

03:37Bank of Japan for example talking about potential rate hikes

03:40we've got Europe starting to look a little bit more

03:44encouraging as far as far as an investment

03:48opportunity is concerned so we're seeing

03:52relocation as well away from the US dollar towards

04:00other currencies such as the

04:04the euro or the Japanese yen.

04:08Fiona good to talk to you thanks again for joining us on the program that's

04:11Fiona Sincotta from City Index. Thank you.

04:15The Bank of England has kept interest rates on hold

04:18warning of global uncertainty. The decision to keep the base rate at four

04:22and a half percent was widely expected although the bank's governor Andrew

04:25Bailey insists it remains on a gradually declining path. Economists are predicting

04:31two more cuts by the end of the year.

04:38Ukraine's President Volodymyr Zelensky says Europe must be part of diplomatic

04:48efforts to end the conflict with Russia. He made his comments as he addressed a

04:53European summit in Brussels where leaders have been discussing ceasefire

04:57efforts further support for Kyiv and bolstering

05:04European defense.

05:08Zelensky briefed them on his phone call with

05:12Donald Trump and accused Russian President Vladimir Putin of being

05:20responsible for the continued fighting. Our teams will also work towards

05:26achieving

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