Risk aversion remains the prevailing sentiment in the markets, supporting safe havens and penalising risk related assets; this dynamic is well illustrated by the performance of the Euro versus the Swiss Franc. Following the declarations of President Trump yesterday, threatening to pull out of the phase one trade deal with China, the Franc reached 1.05038 versus the single currency, the highest in 5 years.
Apprehension surrounding a potential second wave of the coronavirus was already dampening the spirits of investors, that had nevertheless found reasons to be hopeful in the partial lifting of the lockdown across Europe and America; now these fears are being compounded by Donald Trump’s latest aggressive tirade towards China, with the markets posture indicating that, faced with the worst economic contraction since the second world war, a reignition of trade tensions between the US and China is the last thing the world’s economy needs.
