Stock markets slide on Trump impeachment move, trade fears
Stock markets slid Wednesday after US Democrats launched formal impeachment proceedings against President Donald Trump.
The dollar steadied versus the euro and yen amid renewed trade fears as Trump adopted a hard line on China.
The pound meanwhile dropped as British MPs returned to parliament one day after a momentous Supreme Court ruling that Prime Minister Boris Johnson’s decision to suspend parliament ahead of Brexit was unlawful.
“Markets have taken a bit of tumble on fears US president Trump could be impeached, while the (UK) drama… is just as intoxicating as the Brexit drama rumbles on,” noted Neil Wilson, chief market analyst at trading group Markets.com.
In a dramatic move Tuesday in the US, House Democratic leader Nancy Pelosi launched a formal impeachment inquiry.
Wall Street closed with sizeable losses ahead of her expected announcement.
Democrats accuse Trump of abuse of power in a reported attempt to pressure the newly-installed president of Ukraine to open a corruption investigation into his lead challenger for the White House, Joe Biden, and Biden’s son Hunter.
Focus in Europe meanwhile was on the UK parliament after Tuesday’s Supreme Court judgement dented Johnson’s authority, prompting calls for his resignation and casting further doubt on his promise to pull Britain out of the European Union on October 31, come what may.
Concerns over US and British political turmoil added to worries over international trade after Trump ripped into China at the UN, declaring that the time of Beijing’s “abuses” of the system was “over”.
Touting what he argued were the benefits of his tariff war with China, Trump reiterated his hope that a trade agreement “beneficial to both countries” could be struck.
“But as I said very clearly, I will not accept a bad deal for the American people,” he said.
Oil prices took their own hit, also after data indicated a build-up in US crude inventories.
“Oil markets continue to sell as risk sentiment remains sour after Trump accused China of currency manipulation, theft of intellectual property and product dumping,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.
“Mind you, this is nothing shockingly new but coming on the cusp of trade negotiations, it doesn’t exactly suggest he’s laying down the welcome mat for the Chinese delegation.”