The stock markets in the Middle Kingdom and the States collapsed due to the failure of the next negotiations on trade between the United States and China this week. The initiator of this was President Donald Trump again.

As it became known, the trade negotiation between the representatives of the United States and the People's Republic of China that took place this week has again did not lead to a settlement of disputes and ended in vain. On this wave, the American president announced that he was introducing new 10% customs duties on Chinese imports in the amount of $300 billion from September 1 with the previously raised duties on up to 25% on imports of $250 billion.

The market reaction to this news was predictable, as well as the collapse of stock indices on Thursday in the States and today on Friday in China. However, the most negative dynamics was in the crude oil market, where quotes at the time fell by more than 7.0%.

Observing everything that happens, we can say that Trump has failed to achieve his conditions in the US-China trade by hook or by crook and he simply turned to Beijing's banal blackmail. It is difficult to say whether he will succeed in achieving this or not but the Chinese side has already announced that it is increasing the volume of soybean purchases in Russia. Although earlier, they promised to do this from America. It should also be recalled that the Power of Siberia gas pipeline is connected to the Chinese part at the border and that it will start operating in the near future. Thus, China's desire to diversify the economic risks associated with a trade not only with the United States but also with Europe (which is in vassal dependence on Washington), is being observed.

According to the dynamics of the ICE dollar index, the foreign exchange market reacted to these recent events by weakening the US dollar. However, today, the situation can either change and the dollar will get support again, or continue to weaken already in the wake of the publication of data on the number of new jobs in the American economy.

In accordance with the consensus forecast, it is expected in July that the US economy received 164,000 new jobs in the non-agricultural sector, while the unemployment rate will remain at around 3.7%. It can be assumed, evaluating the position of the Fed following the last meeting on monetary policy that only negative data can force the regulator to return to the topic of lowering interest rates. If the data turns out to be much worse than expected, it will lead to a fall in the dollar and naturally, the opposite picture will force him to gain a foothold in the foreign exchange markets. Also, the Fed will be convinced of the correctness of its approach.

Forecast of the day:

The EUR/USD pair is trading above 1.1070. If data on employment in the United States show a greater increase in the number of new jobs, the pair will turn around and rush to 1.0950. At the same time, if the values are noticeably lower than the forecast, the pair will continue to grow to 1.1160.

The NZD/USD pair is below the level of 0.6555. If data on employment in the States show a greater increase in the number of new jobs, the pair will turn around and rush up to 0.6655. However, if they are worse than the forecast, the pair will continue to fall to 0.6480.