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Trade disputes are in focus ahead of an important G7 meeting
Thursday 07 Jun 2018 Author: Tom Sieber

Investors appear to be shrugging off several potential macro-economic and political risks as US and Europe indices continue to trade close to record high levels.

The ability of the market to surmount several negative factors and continue rising is often described as climbing the ‘wall of worry’.

The main negative factors currently at play are deteriorating relations  between the US and several major trading partners as well as political turmoil in Europe.

For now, the market apparently believes US president Donald Trump’s bark is worse than his bite on trade despite the imposition of tariffs on steel and aluminium from the EU, Mexico and Canada and a breakdown in talks with China over the last week or so.

The G7 summit in Quebec on 8 and 9 June is likely to be dominated by the trade issue. In Europe the fall-out from the recent change of prime minister in Spain and a formation of a new populist government in Italy continues as the latest Brexit talks get underway. (TS)

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