The trade dispute between Washington and Beijing remains unresolved and investors are increasingly focusing on the danger of an escalation between the USA and Europe. For the time being, however, the all-clear can be given, at least in the short term, because the US government has postponed its decision on the threatened import duties on European cars by up to six months. As the negotiations in the trade dispute with China have shown so far, however, Europeans must also reckon with repeated threats from US President Donald Trump, who has already repeatedly warned that he could levy customs duties on cars and car parts from the European Union with reference to national safety concerns. Trump may be trying to maintain that threat. German manufacturers would be particularly hard hit by the special duties, as they account for a large share of EU exports to the US. The mood on the stock markets remained depressed at the end of last week anyway. The Euro closed slightly lower against the Greenback on Friday, and on Wall Street the Dow Jones and the broader S&P 500 closed the day down -0.38% and -0.58%, respectively.
The latest economic data from the USA did not show a uniform picture on Friday. While the monthly leading indicator produced by the New York-based economic research firm The Conference Board indicated only moderate economic growth over the next six months with an increase of +0.2%, the confidence of American consumers remains solid. This is confirmed by a first evaluation of the regularly calculated consumer sentiment barometer of the University of Michigan, which at 102.4 points in May, compared with 97.2 points in the previous month, reached its highest level in 15 years.
Investors were nervously watching developments in the UK, where negotiations between Prime Minister Theresa May's Tories and the opposition Labour Party over a Brexit compromise threatened to fail once again. In the meantime, the former foreign minister and Brexit hardliner Boris Johnson is putting himself in a position to take over the government rudder in the event of May's resignation. Continued uncertainty pushed the pound sterling against the US dollar to a new three-month low of 1,2773 on Friday.
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