The US President last night told reporters in London that tariffs will be imposed on China if a trade deal is not struck by 15 December. The statement destroyed the more hopeful outlook that investors priced in over the last few weeks. Bonds ripped higher, the US dollar fell and stocks added to the previous session’s losses.

President Trump went on to say he was happy to prosecute the trade dispute for another year. This supports the view that the spreading global trade disruption is a political tool, despite the economic damage evident in US manufacturing on Monday night. The market adjustment from expectations of an imminent phase-one deal to another year of trade grandstanding could take several sessions.

Australian and New Zealand bonds are following the international leads this morning, and stock futures point to further damage in Hong Kong, Tokyo and Sydney.

The market ructions come despite better than forecast activity in Asia and Europe. The data drop continues today with Australia’s GDP in the spotlight. Volatility in the components point to a higher potential for surprise against estimates of a pick-up in annual growth to 1.7% from the previous 1.4%.

The China Caixin services is forecast at 51.2. A read above the consensus would re-inforce stronger official data released over the weekend, and could slow the risk-off moves. European PMIs tonight are also influential, ahead of US non-farm payrolls on Friday night.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.