Trump vs. China: Wall Street Shakeup. What Will the Week Bring?
China's expansion of rare earth export controls sparked a sharp reaction from the US president, who announced on social media the imposition of 100% tariffs on Chinese products. Although Donald Trump quickly attempted to calm the situation, Wall Street ended the week with deep declines.
Wall Street Shock
China accounts for approximately 60% of the world's rare earth metal production and up to 90% of its processing. Russia and the United States are also major producers of these elements, but it's clear that without the participation of Chinese industry, the production of any modern electronics or batteries is virtually impossible. The fact that China has the majority of the rare earth metal reserves on the planet also works against the Americans.Friday's panic on Wall Street was quickly extinguished by Donald Trump himself, who in a post on the Truth Social platform expressed his willingness to negotiate with Beijing.
The Federal Reserve's policy remains a key signal supporting further growth on Wall Street. The FOMC minutes released last week showed that the Fed still remains in agreement on further easing of US monetary policy. The current interest rate level is expected to be only "moderately restrictive," and market forecasts range from one to two rate cuts by the end of 2025.
The lack of the latest NFP report and likely CPI inflation report will complicate the Fed's work on its next decision. Paradoxically, however, the lack of new data has helped the USD break out of consolidation near three-year lows, and the shift of investor attention toward the problems of the "rest of the world" has supported the dollar's safe-haven status.
In today's webinar, the economist XTB Michał Stajniak will discuss the following topics:
- What does the US shutdown mean for markets?
- Will the data allow for another Fed rate cut?
- Are we dealing with overbought?
In addition, due to the very dynamic global situation, additional video reports will be made available.
About the host
Michał Stajniak - Raw Material Market Analyst in XTB. It places particular emphasis on the linkages between the behavior of commodity prices and the currencies of economies heavily dependent on exports of commodities such as oil, iron ore, gold and powdered milk. He is the author of frequent comments comparing commodity price indices with currency pairs such as AUDUSD, NZDUSD, USDCAD, USDNOK, or EURNOK. He represents XTB in the media (including TVN24 BIS, Polsat News, TVP Info, Bankier TV or Onet TV) and is the author of articles in the financial press such as Parkiet, Puls Biznesu and Dziennik Gazeta Prawna. He is a practitioner of the stock market and the derivative market. In his approach, he values fundamental analysis above all, but often uses Fibonacci levels to determine the demand and supply zones needed in a Price Action strategy. A graduate of Quantitative Methods in Economics and Information Systems at the Warsaw School of Economics.
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