Market Comment | Risk-off mood prevails as trade tensions escalate

The main market drivers this week were FOMC meeting and Trump’s China tariff threat. The former had a broadly muted impact on financial markets, as, while it fueled some volatility, markets soon recovered. However, Trump’s surprise threat triggered a dramatic risk-off mood.

Key points

• Key points:
• Trump’s China tariff threat triggered a dramatic risk-off mood.
• Investors sought shelter in bonds. German bond yields reach new all-time lows, with 30 years at negative levels for the first time. The UST 10Y bond yield drops to 2016 lows.
• Stocks fell while implied volatility increased significantly.

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