Investors are faced with a classic game of cat and mouse - first escalation, then relaxation. Harsh rhetoric is followed by conciliatory pats on the back. The strategic trial of strength between the two largest economies could soon enter the next round. Uncertainty is likely to remain in a field of tension between threats and reconciliation.
From the perspective of the Economic calendar could be exciting this week with a planned Powell speech and important US price data. The start of the US reporting season should also provide important impetus.
However, according to the Bureau of Labor Statistics (BLS), the consumer price data for September will not be published until October 24.
Back and forth in the tariff dispute between the USA and China
On Friday evening, Trump initially threatened to impose additional 100 percent tariffs on Chinese imports from November at the latest. Beijing had previously announced its intention to monitor the export of rare earths more strictly. US tariffs on Chinese imports currently stand at 30 percent. In return, China levies ten percent.
On Sunday, however, the message was: „Don't worry about China, everything will be fine. The highly respected President Xi just had a bad moment,“ Trump said on his online service Truth Social. Xi did not want „a depression“ for his country - and neither did he himself, it continued.
The Chinese Ministry of Commerce also stated on Sunday that Trump's tariff threat was a „typical example of double standards“. „Threatening to impose tariffs at every opportunity is not the right approach in dealing with China.
Powell may provide monetary policy stimulus on Tuesday - US monetary policy likely to remain an issue
An expected speech by Fed Chairman Jerome Powell could provide important impetus on Tuesday (18:20).
According to the data calendar, US producer prices and US retail sales data are on the agenda on Thursday (14:30).
On Wednesday evening, as in the previous trading week, there will be numerous speeches by various Fed representatives, such as Raphael Bostic (18:10), Stephen Miran (18:30) and Christopher Waller (19:00).
The „Beige Book“ from the US Federal Reserve is also likely to be published (20:00).
US reporting season starts: Big banks traditionally present their figures at the beginning
The major US banks traditionally herald the start of the reporting season. On Tuesday, for example, Goldman Sachs (ISIN: US38141G1040), JP Morgan Chase (ISIN: US46625H1005), Wells Fargo (ISIN: US9497461015) and Citi Group (ISIN: US1729674242) are expected to report their figures for the past financial quarter. BlackRock (ISIN: US0920D1019) is also scheduled to present its figures.
On Wednesday, the results of Bank of America Corp (ISIN: US0605051046) and Morgan Stanley (ISIIN: US6174464486) are on the agenda.
Dow Jones Industrial Average Index
