Stocks were experiencing higher volatility levels this morning as investors digest the latest developments with the trade talks. Despite the positive tone between the two blocs a few weeks ago, the recent shift in negotiations has made stock markets more uncertain than ever. A real “legislative” battle took place overnight when the US House passed a bill demanding sanctions on Chinese officials for the treatment of Uighur Muslims. China responded by accusing the US of interfering in its internal affairs and said it will do whatever it takes to safeguard its sovereignty and security. On the trade front, China also warned President Trump the new round of US tariffs will be countered by retaliatory measures, which would “seriously disrupt” ongoing negotiations.
Despite increased volatility, stocks still lack a clear price direction as traders struggle to forge a real opinion on where these trade talks are going. The Stoxx-50 Index successfully rebounded over the 3,600pts zone and may extend its short-term corrective move up to 3,650pts intraday.
