Oct 03, 2019
EU Markets Decline
Political uncertainty has had a negative impact on the EU markets and as a result, EU stock indices, such as the UK FTSE 100 and the German Dax, have declined strongly. The ongoing US-China trade war seems to be escalating and it could now even evolve into a trade war between the US, China and Europe. President Donald Trump might start increasing taxes on specific EU products, which are coming into the US and this is very similar to the taxes he has imposed on Chinese products, but on a smaller scale, at least, for now. The recent tariffs/ taxes on EU goods will start at $7.5 billion but this could quickly increase.
Meanwhile, the German DAX index closed at 11,925 points, dropping by 2.76%, while the UK FTSE declined by more than 3%, marking its worst day since the Brexit vote, which took place in 2016.
As Europe struggles with low economic growth and solving their Brexit issue, a trade war between the US and Europe will only spell bad news for Europe. Any additional downside pressure today could, however, generate lucrative short positions on the euro (EUR) currency.