Donald Trump calls off stimulus, markets quickly sold off

President Donald Trump said Tuesday that he was withdrawing from economic relief talks until after the election, abruptly ordering Treasury Secretary Steven Mnuchin to stop negotiating with House Speaker Nancy Pelosi.

Image: REUTERS/Jonathan Ernst

“Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their request, and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business”, Trump wrote on Twitter a day after emerging from a hospital stay for COVID-19 treatment.

In a statement responding to Trump’s tweets, Pelosi said the president “showed his true colors: putting himself first at the expense of the country, with the full complicity of the GOP Members of Congress.” She added that “walking away from coronavirus talks demonstrates that President Trump is unwilling to crush the virus.”

It’s worth mentioning that the Fed Chair Jerome Powell’s push for more stimulus and downbeat US data could also play their roles to propel the US dollar, which in turn dragged the gold prices downward.

Oil prices fell in the morning of Asian trading hours as U.S. President Donald Trump called off stimulus negotiations till after the November election.

International benchmark Brent crude futures dropped 2.06% to $41.77 per barrel while U.S. crude futures slipped 2.31% to $39.73 per barrel.

Meanwhile, Asia-Pacific markets were mixed in Wednesday morning trade.

Japan’s Nikkei 225 dipped 0.5% in early trade while the Topix index shed 0.57%. South Korea’s Kospi also declined 0.39%. The S&P/ASX 200 in Australia bucked the overall trend as it gained 0.12%.

Source: CNBC

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.26% lower.

Stocks on Wall Street fell overnight following Trump’s announcement. The Dow Jones Industrial Average closed 375.88 points lower, or 1.3%, at 27,772.76. The S&P 500 ended its trading day 1.4% lower at 3,360.95 while the Nasdaq Composite dropped 1.6% to close at 11,154.60.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.824 after an rise from levels below 93.6.

Gold prices stay pressured around $1,877 during the initial Asian trading on Wednesday.

In the crypto market, Bitcoin also fell slightly by $ 150, currently trading at $ 10,542, major altcoins like ETH, XRP, LTC, and BNB all down from 4 to 5 percent. EOS was an exception when last night surged 20% to nearly $ 3 following news of Google Cloud will eventually become an EOS Network block producer.

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