Markets Mixed as US-China Trade Dispute Takes Backseat to US Non-Farm Payrolls Report

Gold futures are edging lower early Friday with the news about the escalation of the U.S-China trade dispute, taking a backseat to the release of the U.S. Non-Farm Payrolls report at 1230 GMT. Traders expect the headline number to come in at about 195K versus 223K last month. The unemployment rate is expected to remain steady at 3.8%. Average Hourly Earnings are expected to rise 0.3%.
James Hyerczyk
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In breaking news, the new day started with reports from China state media saying Beijing had implemented retaliatory tariffs on some imports from the U.S. on Friday. The move was triggered after new U.S. duties had taken effect.

At 0400 GMT, the U.S. imposed new tariffs on $34 billion of annual imports from China, fulfilling a threat that had been on the table for weeks. This provoked Beijing to respond in kind with levy tariffs on 545 items of U.S. imports – also worth $34 billion, state-run newspaper The China Daily reported Friday.

Depending on how one looks at it, the moves by both economic powerhouses either signals the escalation of the “trade dispute”, or signals the start of a full-blown “trade war”.

Global Equity Markets

Asian stock markets finished higher, with investors bracing for developments in the on-going trade friction between the United States and China.

European equities are set to open higher Friday morning with investors showing little response to the U.S. imposition of new tariffs on China and Beijing’s subsequent response with retaliatory moves of its own.

In the U.K., the FTSE 100 is called 34 points higher at 7633.00. In Germany, the DAX is set to start the session up 40 points and in France, traders are looking for a steady opening in the CAC 40.

In the U.S., early trading in the E-mini futures markets remains positive. At 0649 GMT, September E-mini S&P 500 Index futures are at 2741.75, up 3.25 or +0.12%. September E-mini Dow Jones Industrial Average futures are trading 24365, up 22 or +0.09% and September E-mini NASDAQ-100 Index futures are up 10.00, or 0.14% at 7136.00.

Crude Oil

U.S. West Texas Intermediate and international bench-mark Brent crude oil futures are trading mixed in limited action. Although there is some general nervousness over the U.S.-China trade dispute, most traders agree that yesterday’s government report is exerting the most pressure on the market.

On Thursday, the U.S. Energy Administration (EIA) announced that U.S. crude inventories had risen 1.2 million barrels in the week to June 29, to 417.88 million barrels. This news was generally thought of as bearish because traders had been pricing-in a 4.4 million barrel decline.

Gold

Gold futures are edging lower early Friday with the news about the escalation of the U.S-China trade dispute, taking a backseat to the release of the U.S. Non-Farm Payrolls report at 1230 GMT.

Traders expect the headline number to come in at about 195K versus 223K last month. The unemployment rate is expected to remain steady at 3.8%. Average Hourly Earnings are expected to rise 0.3%.

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