'Markets nervous amid new US-China tariffs and Trump's troubles - as it happened' diff viewer (3/4)

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Markets nervous amid new US-China tariffs and Trump's troubles - business live	Markets nervous amid new US-China tariffs and Trump's troubles - business live
2018-08-23 08:55:08 UTC	2018-08-23 09:30:11 UTC (35 minutes later)
	The trade tensions between the US and China are more likely to deteriorate this year and dampen global growth in 2019, according to Moody’s.
	In its latest global outlook report, Moody’s says there are early signs that global growth has peaked. It expects the G20 countries to grow by 3.3% in 2018 and 3.1% in 2019. The advanced economies will grow 2.3% in 2018 and 2.0% in 2019, while G20 emerging markets will remain the growth drivers, at 5.1% in both 2018 and 2019.
	But it added that “further tariffs, similar in magnitude to the newly proposed 25% US tariffs on $200 billion of imports from China and 25% US tariffs on all auto and auto part imports, represent a disruptive downside risk to our baseline forecasts.” Madhavi Bokil, Moody’s vice president and lead author of the report, said:
	Most of the impact of the trade restrictions on economic growth will be felt in 2019. The magnitude of the macro impacts will depend on market sentiment. Tightening of financial conditions through asset price and currency adjustment and a broader hit to business and consumer confidence are now more likely than a few months ago and have the potential to derail the global economy.
Back with the trade wars, and here is our latest report on the new tariffs:	Back with the trade wars, and here is our latest report on the new tariffs:
The US and China have escalated their ongoing trade war by implementing 25% tariffs on $16bn worth of imports on both sides, bringing the amount levied to a combined $100bn (£78bn) since July.	The US and China have escalated their ongoing trade war by implementing 25% tariffs on $16bn worth of imports on both sides, bringing the amount levied to a combined $100bn (£78bn) since July.
Beijing began implementing the new tariffs on Thursday, when the US said it would begin collecting extra duties in retaliation for what it claimed were unfair Chinese trade practices.	Beijing began implementing the new tariffs on Thursday, when the US said it would begin collecting extra duties in retaliation for what it claimed were unfair Chinese trade practices.
“China firmly opposes [the US tariffs] and has to continue to make necessary counterattacks,” China’s ministry of commerce said in a statement.	“China firmly opposes [the US tariffs] and has to continue to make necessary counterattacks,” China’s ministry of commerce said in a statement.
The latest round of tariffs comes as Chinese and US officials are due to meet in Washington for talks that few expect will bring an end to months of tit-for-tat threats and tariffs.	The latest round of tariffs comes as Chinese and US officials are due to meet in Washington for talks that few expect will bring an end to months of tit-for-tat threats and tariffs.
On Monday, Donald Trump told Reuters he did not “anticipate much” from the negotiations in Washington. The US president said any resolution would “take time because China’s done too well for too long, and they’ve become spoiled”.	On Monday, Donald Trump told Reuters he did not “anticipate much” from the negotiations in Washington. The US president said any resolution would “take time because China’s done too well for too long, and they’ve become spoiled”.
The White House claims China steals foreign companies’ intellectual property or forces them to give it up, and that industrial subsidy programmes unfairly benefit Chinese businesses. The latest round of US tariffs target electronics, plastics, chemicals, semiconductors and other goods from the “Made in China” industrial plan to upgrade Chinese manufacturing capabilities.	The White House claims China steals foreign companies’ intellectual property or forces them to give it up, and that industrial subsidy programmes unfairly benefit Chinese businesses. The latest round of US tariffs target electronics, plastics, chemicals, semiconductors and other goods from the “Made in China” industrial plan to upgrade Chinese manufacturing capabilities.
The full story is here:	The full story is here:
Euro area flash PMIs: output and new orders outside France & Germany weakened to 22-month lows, with future expectations hitting a five-year low. Details much less positive than headlines overall. pic.twitter.com/b5pZIlvtIX	Euro area flash PMIs: output and new orders outside France & Germany weakened to 22-month lows, with future expectations hitting a five-year low. Details much less positive than headlines overall. pic.twitter.com/b5pZIlvtIX
The eurozone data will not make easy reading for the European Central Bank or its president Mario Draghi, suggests Balraj Sroya, sales trader at foreign exchange specialist Foenix Partners:	The eurozone data will not make easy reading for the European Central Bank or its president Mario Draghi, suggests Balraj Sroya, sales trader at foreign exchange specialist Foenix Partners:
The ECB’s monetary policy plans could be derailed as trade war fears have impacted PMI figures from the bloc state. While both the services and manufacturing PMI prints from the eurozone showed expansion in each respective sector, the manufacturing figure fell to 20-month lows of 54.6. Recently Inflation and economic growth have exceeded the ECB’s targets. However, the central bank’s Quantitative Easing tapering strategy could be derailed if feeble data such as today’s PMI prints continue while adding fuel to an already cautious Draghi.	The ECB’s monetary policy plans could be derailed as trade war fears have impacted PMI figures from the bloc state. While both the services and manufacturing PMI prints from the eurozone showed expansion in each respective sector, the manufacturing figure fell to 20-month lows of 54.6. Recently Inflation and economic growth have exceeded the ECB’s targets. However, the central bank’s Quantitative Easing tapering strategy could be derailed if feeble data such as today’s PMI prints continue while adding fuel to an already cautious Draghi.
Eurozone business growth picked up but at a slower pace than expected, with the prospects of a trade war hitting the outlook for manufacturers.	Eurozone business growth picked up but at a slower pace than expected, with the prospects of a trade war hitting the outlook for manufacturers.
The IHS Markit preliminary composite PMI - which includes both the manufacturing and service sectors - came in at 54.4 in August, up from 54.3 the previous month but marginally below the forecast 54.5. The rate of expansion was one of the weakest seen over the past year and a half, said Markit.	The IHS Markit preliminary composite PMI - which includes both the manufacturing and service sectors - came in at 54.4 in August, up from 54.3 the previous month but marginally below the forecast 54.5. The rate of expansion was one of the weakest seen over the past year and a half, said Markit.
Companies expectations of growth slipped to the lowest for nearly two years.	Companies expectations of growth slipped to the lowest for nearly two years.
The services PMI rose from 54.2 to 54.4, in line with expectations. But the manufacturing index fell from 55.1 to 54.6, the lowest since November 2016 and below the expected 55.	The services PMI rose from 54.2 to 54.4, in line with expectations. But the manufacturing index fell from 55.1 to 54.6, the lowest since November 2016 and below the expected 55.
Chris Williamson, chief business economist at IHS Markit warned of warning lights flashing. He said:	Chris Williamson, chief business economist at IHS Markit warned of warning lights flashing. He said:
The survey data indicate that the eurozone economy looks to have continued to grow at a steady rate in August, raising hopes that the third quarter could see GDP growth match the 0.4% expansion seen in the second quarter. In fact, the survey evidence suggests that the official data so far this year could yet be revised slightly higher.	The survey data indicate that the eurozone economy looks to have continued to grow at a steady rate in August, raising hopes that the third quarter could see GDP growth match the 0.4% expansion seen in the second quarter. In fact, the survey evidence suggests that the official data so far this year could yet be revised slightly higher.
Jobs growth also remains encouragingly robust, which should help further stimulate consumer spending and help offset signs of continuing weakness in exports.	Jobs growth also remains encouragingly robust, which should help further stimulate consumer spending and help offset signs of continuing weakness in exports.
With the indicators of current activity, employment and price gauges remaining elevated, the August survey sends a hawkish signal to policymakers. But the forward-looking indicators suggest the business mood could cool as summer passes.	With the indicators of current activity, employment and price gauges remaining elevated, the August survey sends a hawkish signal to policymakers. But the forward-looking indicators suggest the business mood could cool as summer passes.
Warning lights are flashing. Analysis of past data indicates that demand needs to pick up to sustain current output and employment growth in coming months. Yet the risks seem tilted to the downside.	Warning lights are flashing. Analysis of past data indicates that demand needs to pick up to sustain current output and employment growth in coming months. Yet the risks seem tilted to the downside.
Escalating political worries, rising prices and a recent slowdown in order book growth have all contributed to the gloomiest outlook for almost two years, according to companies’ expectations of their future output. In manufacturing, optimism is down to its lowest for almost three years, as a near- stalling of exports corroborated escalating trade war worries.	Escalating political worries, rising prices and a recent slowdown in order book growth have all contributed to the gloomiest outlook for almost two years, according to companies’ expectations of their future output. In manufacturing, optimism is down to its lowest for almost three years, as a near- stalling of exports corroborated escalating trade war worries.
With manufacturing looking the most susceptible to a trade-led slowdown in coming months, hopes are pinned on a robust service sector helping to drive economic growth as we move into the autumn, yet even here optimism is down to its lowest for nearly two years.	With manufacturing looking the most susceptible to a trade-led slowdown in coming months, hopes are pinned on a robust service sector helping to drive economic growth as we move into the autumn, yet even here optimism is down to its lowest for nearly two years.
Back with the German PMIs:	Back with the German PMIs:
Flash #Germany PMI 55.7 v 55.0 in July (best since Feb). PMI so far indicates Q3 GDP of c.+0.5%. Employment growth close to record highs. Services-led expansion, but new orders growth for goods slipped to the lowest since May 2016 amid smallest rise in exports for over 2 years pic.twitter.com/LRBYJIEeGk	Flash #Germany PMI 55.7 v 55.0 in July (best since Feb). PMI so far indicates Q3 GDP of c.+0.5%. Employment growth close to record highs. Services-led expansion, but new orders growth for goods slipped to the lowest since May 2016 amid smallest rise in exports for over 2 years pic.twitter.com/LRBYJIEeGk
Investors remain cautious, with markets continuing to drift. Lee Wild, head of equity strategy at interactive investor, said:	Investors remain cautious, with markets continuing to drift. Lee Wild, head of equity strategy at interactive investor, said:
Markets traded either side of breakeven in early trade as tariffs threatened by both the US and China came into effect overnight. And there’s a real risk to global economic growth if the US slaps duties on another $200 billion of Chinese goods, and especially if other countries get sucked into this dispute. At a time when other economies are beginning to struggle, a sharp slowdown in US expansion could have a significant impact worldwide.	Markets traded either side of breakeven in early trade as tariffs threatened by both the US and China came into effect overnight. And there’s a real risk to global economic growth if the US slaps duties on another $200 billion of Chinese goods, and especially if other countries get sucked into this dispute. At a time when other economies are beginning to struggle, a sharp slowdown in US expansion could have a significant impact worldwide.
These developments come at a particularly sensitive time for a UK stock market rangebound for the past three months. September is statistically the worst month of the year for UK shares, but there have been wild swings either way in recent years, so don’t expect this stale period to last.	These developments come at a particularly sensitive time for a UK stock market rangebound for the past three months. September is statistically the worst month of the year for UK shares, but there have been wild swings either way in recent years, so don’t expect this stale period to last.
Germany’s business activity hit a six month high, with a strong service sector making up for weakness manufacturing as global trade tensions rise.	Germany’s business activity hit a six month high, with a strong service sector making up for weakness manufacturing as global trade tensions rise.
The IHS Markit preliminary composite PMI rose from 55 in July to 55.7, better than the expected 55.2.	The IHS Markit preliminary composite PMI rose from 55 in July to 55.7, better than the expected 55.2.
But the manufacturing index fell from 56.9 to a lower than forecast 56.1. The service sector rose from 54.1 to 55.2. Phil Smith, principal economist at IHS Markit said:	But the manufacturing index fell from 56.9 to a lower than forecast 56.1. The service sector rose from 54.1 to 55.2. Phil Smith, principal economist at IHS Markit said:
German business continued to display remarkable resilience during August, with the latest PMI data going some way to dispel any fears about a global trade slowdown and its impact on the health of the economy.	German business continued to display remarkable resilience during August, with the latest PMI data going some way to dispel any fears about a global trade slowdown and its impact on the health of the economy.
Buoyed by strong fundamentals in the domestic market, including rising employment and wages, the service sector enjoyed an upturn in growth in August and drove the steepest rise in private sector business activity for six months.	Buoyed by strong fundamentals in the domestic market, including rising employment and wages, the service sector enjoyed an upturn in growth in August and drove the steepest rise in private sector business activity for six months.
While the manufacturing PMI retreated slightly, it remained well inside growth territory at the mid- point in the third quarter. The top-line number is perhaps flattered by the output component, with trends in new orders and exports – the latter the weakest in over two years – pointing to a softer pace of growth.	While the manufacturing PMI retreated slightly, it remained well inside growth territory at the mid- point in the third quarter. The top-line number is perhaps flattered by the output component, with trends in new orders and exports – the latter the weakest in over two years – pointing to a softer pace of growth.
Elsewhere, the survey’s measure of prices charged for goods and services edged closer to January’s survey-record peak, to suggest the potential for some renewed upward pressure on the headline inflation rate in coming months.	Elsewhere, the survey’s measure of prices charged for goods and services edged closer to January’s survey-record peak, to suggest the potential for some renewed upward pressure on the headline inflation rate in coming months.