Markets have remained on edge after a report by Bloomberg indicated that President Trump wanted to proceed with tariffs on $200 billion more on Chinese goods but at a lower rate of 10% which could be announced as early as this week. Meanwhile The Wall Street Journal cited a senior Chinese official saying China wasn’t “going to negotiation with a gun pointed to its head.” Trump tweeted on Monday that of the success of tariffs as a negotiating tactic, while also threatening further levies if trade partners weren’t making “fair deals.” The US Dollar Index moved lower and was down 0.5% trading near the bottom of its recent range of 94-97 at 94.50.
On the data front, the New York Empire manufacturing index fell from a ten-month high of 25.6 in August to a five-month low of 19.0 in September. Some fall in the index was not surprising, given the toll the trade wars could be having on confidence. The index however, is volatile, and the sub-indices on activity remain elevated.
Looking ahead, the economic calendar is fairly light, however we will see more numbers coming on the housing market. The National Association of Home Builders releases its housing market index for September. Economists expect a reading of 66, down from 67 in August. The index has been strong of late, recently hitting 74, a level not seen since 1999.