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Stocks Slide like Trump Turns Tariff Gun to Mexico: Markets Wrap




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Stocks and government bonds fell after President Donald Trump opened a new front in the war, threatening to place escalating import tariffs on Mexico in an attempt to curb illegal immigration across the borders of the two nations.

Futures on the S & P 500 index declined 0.8%, heading to the worst week since the global market in December, while Japanese stocks opened 0.8% lower. Korean stocks also fell, while Australia was little changed. The latest move of the self-declared Tariff One would put 5% duties on all Mexican imports on June 10, and rise to 25% in October unless Mexico stops "illegal immigrants" on their way to the United States. Tweets sent the Mexican peso down about 2%.

Trump's Mexico tariff plan leaves the markets a turbulent end to what has been a tough month for global stocks, down most since December. Investor's focus has so far been on the US tariff escalation toward China, and the management's move to cut China's technology giant Huawei Technologies Co. from American business.

Treasuries have benefited from the port's demand and are sending returns on 10-year notes down to 2.19% Friday compared to 2.50% at the beginning of the month. The Mexico tariff spokesman said Federal Clarence, Vice President Richard Clarida, that the US central bank is prepared to ease monetary policy if it sees growing risk of US expansion. He stressed that the economy was in a "very good place" with low unemployment and inflation subdued.

The collapse of the bond yield this week indicates a scary outlook for growth as the trade war winds. The possibility that Beijing could cut exports of rare earth minerals, along with signs that the US-EU negotiations are not meaningful, has added to the negative feeling. Next on the trade leader list is China's manufacturing PMI and US inflation and spending figures Friday.

In other cases, oil fell below $ 56 per barrel in demand terms.

Here are some important events that come up:

China gives a first look at its May financial results on Friday, with economists predicting the official production PMI will cross down to 49.9 amid worsening trade war with USOn Friday , the data is due to Fed's preferred measurement of price pressure; The food, which excludes food an energy, is assumed to be stable at an annual 1.6%.

And these are the main features of the markets:

Shares

Japan's Topix index fell 0.7% from 9:07 am in Tokyo. Australia's S & P / ASX 200 Index was slightly changed. The Kospi index fell 0.5% Futures on S & P 500 fell 0.9%. The underlying meter rose 0.2% Thursday.

Currency

Yen rose 0.3% to 109.33 per dollar. The offshore yuan went down 0.1% to 6.9367 per dollar. Bloomberg Dollar Spot Index rose 0.3% to the highest for more than five months. Euro bought $ 1.131, little changed.Mexico's peso fell about 2% to 19.49 per dollar.

Bonds

The return on 10-year Treasuries reduced two basis points to 2.19%.

Goods

West Texas Intermediate crude fell 1% to $ 55.98 per barrel. Gold rose 0.1% to $ 1,290.58 an ounce.

– With help from Jeremy Herron and Vildana Hajric.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.net

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