A fresh threat of U.S. tariffs on Chinese imports sent U.S. futures markets tumbling nearly 100 basis points into this morning’s trading. Base metals all took a tumble in off-hours trading as China’s trade delegation were considering cancelling the resumption of trade talks this week.
Expectations for a trade deal by Friday now look unlikely as volatility soared and the VIX Index jumped 43 points. In Shanghai, SHFE nickel futures plunged 2.5 percent while copper futures were down nearly 2 percent. In New York, COMEX copper futures were down around $2.80 in early trading.
Energy futures markets are weak with U.S. sanctions, OPEC production output restraint, and disruptions in African crude production are hitting the market simultaneously and raising supply sufficiency questions. U.S. crude markets appear to have corrected a bit over the weekend to open trade from a more neutral position. Foreign exchange markets are still betting on the dollar and yen while pushing the yuan to its worst drop since 2016.
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