Stock markets slipped on Friday after U.S. President Donald Trump proposed tariffs on more Chinese products, aggravating trade tensions, while the dollar steadied before the closely watched U.S. non-farm payrolls report. Trump said late on Thursday that he had instructed U.S. trade officials to consider $100 billion in additional tariffs on China, fueling the trade dispute between the world’s two economic superpowers. China’s Ministry of Commerce said it would take new comprehensive measures to safeguard the country’s interests if the United States stuck to its protectionist behavior. “Trump’s order to consider whether $100 billion of additional tariffs would be appropriate, and recent trade actions and rhetoric in recent weeks, is an example of how battles can turn to wars,” said Dan Ivascyn, group chief investment officer at Pacific Investment Management Co (PIMCO).
Asian stocks declined early on Friday in a knee-jerk reaction to Trump’s latest tariff proposal but regained a measure of calm following Wall Street’s strong performance overnight. The Dow and the S&P 500 fluctuated for a third day in a row on Thursday amid the back-and-forth of the U.S.-China trade dispute, with some investor focus turning to upcoming earnings. Beyond the trade turmoil, financial markets are focused on Friday’s U.S. non-farm payrolls report, which could determine the pace of future Federal Reserve interest rate rises and the dollar’s direction. The U.S. March employment report is expected to show non-farm payroll growth of 193,000 jobs versus 313,000 the prior month, average hourly earnings are expected to have risen 0.2 percent last month after edging up 0.1 percent in February. The gain would lift the annual increase in average hourly earnings to 2.7 percent from 2.6 percent in February, according to the latest Thomson Reuters economists. The dollar had risen to a one-month peak of 107.490 yen overnight, bolstered by Wall Street’s bounce on Thursday when the United States appeared to signal a willingness to resolve the trade dispute.