A more negative view of trade conflicts - ABN AMRO

Nick Kounis, chief analyst at ABN AMRO, points out that the clash with China last month and the tense relationship since already raised the risks, while the opening of a new front in the trade war with Mexico has confirmed that the US administration would be more "steadfast" in the policy.

Key quotes

"The changes reflect that we now take a more negative view on the way the trade conflict will evolve over the coming months. President Trump appears less concerned about market reactions to his trade policies than previously thought."

"We now therefore assume that there will be continued escalation of the trade conflict between the US and China/Mexico and possibly others going forward."

"Direct effects of tariffs are significant but not major, though indirect effects are likely to be large."

"The global monetary easing cycle should set the scene for an improvement in economic growth in the second half of next year."