Data, Brexit, trade war and more before the start of the EU session

Against the backdrop of growing cracks in the global economy, Trump is opening a new trade front. Yesterday it escalated the trade war with Europe and imposed tariffs of $ 7 billion on European goods and products. This has called into question the potential success of the US-China talks, with Asian markets reacting with fear.

Looking at Europe, European futures indicate a weak opening, following the general sentiment. The markets have actually been startled by the first Trump impeachment threats. ISM PMI data was another nail in the coffin, and within three days of sentiment "greed" we switched to "fear". The VIX is again in the 20's range, but far from panic levels, and bonds continue to sink. The trade war with Europe will additionally pour oil into the fire, and today we have PMI data in the services sector for the Eurozone and the United States, and later initial requests for assistance.

We expect markets to go down, but will also focus on ISM PMI in services. The weaker data will be the last nail to confirm that the largest economic sector in the US is stagnant. The motto "bad data is good data" is no longer valid on Wall Street, even if it raises the likelihood of further Fed interest cuts. The reality is already pushing the market to realize that the Fed is depleting its ammunition faster, and the effects of the first interest rate cuts will be felt in 6 to 7 months. And the market may already be aware of this fact ...

Undoubtedly, it will not be surprising today to see bids in the hope that services are still held by strong domestic consumption. Manufacturing is a recessionary practice because of the trade war, where the economy breaks. Consumption cannot sustain local production forever. What about the services?

Elsewhere, oil finds buyers in the early hours, gold is virtually unchanged, and the Japanese yen has started to weaken. Lucky futures are slightly up.

A little further west than us, Johnson will be played in his own game. The EU is ready to extend Brexit without it. Leaders seem ready to once again bend to compassion for the people of Great Britain. Or rather, the ultimate European tolerance is coming back into action.

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