The EU and the United States still have around two weeks to conclude a trade agreement. German bank experts warn of non-setting.
• Deutsche Bank warns of a violent market reaction
• Customs ultimate expires
• Combination of tariffs, labor market data and interest policy could shake markets
The deadline for the introduction of new tariffs expires on August 1st. US President Donald Trump, who has been pursuing an erratic customs policy since taking office in the White House in the White House, has recently increased the pressure on the European Union. In this context, Deutsche Bank warns of dangers for the markets.
EU and the USA in negotiations
Donald Trump in the middle of ongoing negotiations with the EU tightened and announced that I want to take imports from the EU with an inch of 30 percent from August 1st. The European Union continues to find a negotiating solution, but is also ready for an emergency: In the event that the negotiations will not result in a satisfactory trade agreement for both sides. The list includes industrial imports worth around $ 77 billion, including aircraft, machines, chemicals, plastics and medical devices, as well as agricultural products and food such as fruit and vegetables, wine, beer and spirits worth around $ 7 billion.
Deutsche Bank warns of carelessness of the markets
The stock exchanges had initially largely took note of the latest developments in the customs drama – a fact that apparently worried the experts at Deutsche Bank. “The markets clearly do not praise these higher tariffs, and we may only find out the result in the past few hours,” said analysts from the financial house “Investing” and added that the episode could be “a very violent market reaction and increased volatility”.
It is not just the leakage of the deadline for a trade cleaning that takes care of the experts. The deadline for customs regulations, coupled with a US labor market report on the same day, represents a dangerous constellation that reminds of market turbulence at the end of July and early August 2024, according to the analysts.
Further risks for the markets
They emphasize these risks by already high yields of long-term US state bonds. “There was a lower leap to get into problematic terrain that rejects the fears of fiscal policy.”
A weak labor market report after the new tariffs could easily flare up the fear of US recession. In the period around the expiry of the customs deadline, the experts also see other potential reasons for increased market volatility and, according to Investing, refer to the Fed decision, because the next key interest rate decision should be made shortly before the customs ultimate expires. In addition, in their view, the repayment announcement of the US Ministry of Finance and the publication of GDP would come for the second quarter, all of which should take place in the same week and could bring further market fluctuations.
In view of the strong discounting of the new customs date by the markets, “said Deutsche Bank,” this causes a key phase with event risks at the end of the month. ”
Editor finance.net
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