Market volatility set to continue but could negotiation help EU?

CGTN Europe

Monday was described as a "bloodbath" by some analysts after Asian and European shares plunged with investors fearing tariffs from Donald Trump could lead to inflation and a global recession.   Market turmoil looks set to continue but could negotiation ease the path for the EU? Susannah Streeter of Hargreaves Lansdown talks to CGTN’s Juliet Mann.

Transcript

00:00Susanna Streeter is Head of Money and Markets at Hargreaves Lownsdown.

00:04Great to have you on the programme again Susanna.

00:06So are we at the bottom or is there worse to come?

00:11I think we're going to see continued volatility but I think a lot is going to depend

00:15on what we hear from President Trump in the coming days.

00:19What you heard was when he said that this tariff policy was a medicine

00:24that spread concerns about the bitter pill that the global economy

00:29is going to have to swallow and led to fresh worries about global growth

00:33and a potential looming global recession.

00:36And that's why you've seen these steep falls.

00:39Also the very fact that actually markets in Asia, it's the first time

00:42that they've been able to respond as well to China's retaliation against

00:46Trump's tariffs that were imposed late on Wednesday.

00:51And so all of this is added up to this kind of real climate of fear and worry

00:56emanating right the way through stock markets.

00:59You mentioned though there are signs.

01:01Yes, I was just about going to say if there are signs that President Trump

01:05does decide to roll back or at least a little bit on some of these tariffs

01:09you might see some of the losses pared back.

01:12You could see a bit of a turnaround but I think volatility is here to stay

01:16for the time being.

01:17Well I think you've kind of answered my next question then because as you mentioned

01:20those Chinese markets have been shut on Friday when selling was the heaviest

01:24in the U.S. and other centers.

01:26What you're saying is that what we're seeing on the Asian markets,

01:28it's not just playing catch-up.

01:30These losses are a long-term thing.

01:33Yes, you saw for example the Hang Seng fall by 13%.

01:38It's partly playing catch-up but also I think in response to Trump's

01:43latest comments where he appeared to double down on his tariff policy

01:48despite growing voices from some of his previous supporters who are saying,

01:55look we don't think this is the right strategy at all.

01:58Bill Ackman there saying it could lead to an economic nuclear winter.

02:02So he's not mincing his words there.

02:04There still will be hope that Trump will listen and actually start negotiating

02:09and that some of these more onerous tariffs will be rolled back

02:13because the calculations upon which these decisions were made

02:17have been questioned as being highly dubious.

02:20It's based on surpluses, tiny countries being slammed with really painful tariffs

02:27as a result of sending some goods to the United States over one year.

02:33I mean it doesn't make economic sense and that has come through loud and clear

02:37from so many parts of the world.

02:39I think talking about Trump's math is probably a conversation,

02:42a much longer conversation for another time.

02:44But let's look at the impact on European markets.

02:47What is it going to take to calm things down?

02:50It's not just about Trump moving, is it?

02:53It's about the reaction and the retaliation.

02:56Yes and actually what I think you have seen is some noises coming from Europe

03:01about the fact that they do not want to impose really steep tariffs.

03:07And so I think that's partly why you've seen some of the losses

03:11pep back today.

03:13So the DAX was initially down a lot more and it's gained back a tiny bit of ground

03:18amid hopes that you won't see a further escalation

03:22and that leaders will wait and see how all of this plays out.

03:27Because the danger is, for example, for the wine industry, for example,

03:32if extra tariffs are then put on U.S. goods,

03:36then Trump has vowed to retaliate and slam even further tariffs

03:40on the wine industry, for example.

03:42You've already seen the likes of luxury goods maker LVMH.

03:45He owns Moët, Hennessy.

03:47It shares down really sharply today.

03:50But there will be some hopes that there is room for negotiation.

03:53It's unnerving for investors and consumers alike.

03:56Susanna Streeter from Half-Wheat Lansdowne.

03:58Always a pleasure to talk to you.

Category

Transcript

Be the first to comment

Recommended