While most blame President Trump, the EU is complicit in the looming trade wars this year. In retaliation, today the European Union has introduced tariffs on US goods imported into the region, media focusing on iconic items like bourbon, jeans, motorcycles and orange juice worth a total €2.8 billion.
An emergency ‘mini-summit’ meeting of EU leaders has been called for this Sunday by Jean-Claude Juncker to discuss migration issues ahead of next week’s council summit. The German Chancellor is under pressure from her coalition interior minister to change her policy on asylum seekers. However, Italy – where interior minister Matteo Salvini, the League party’s leader is becoming a dominant force – has objected strongly to the proposals and is rumoured to have threatened withholding contributions to EU funding.
We’ve had our first daily close below this Spring’s support at 12600 and momentum has become a little more bearish. German automakers say they are willing to drop the 10 per cent tariff on US made autos; this appears too little too late. Daimler yesterday warned that profits will be lower because on US-China trade tensions, dragging down European car-makers’ shares.
SHORT TERM TRADER: Short at 12955; stop well above 13000. Target 12200.
POSITION TAKER: Will re-sell at today’s close if it’s clearly below 12600.