Global Selloff Flipping Signs for the World Economy

World prices for goods are clogged because the tensions in the trade war once again rot between the two largest economies in the world – and the recession signals blink red.

The S&P GSCI index, which monitors the world’s energy, metals and agriculture, shows that prices have decreased by 8%since April 2, when US President Donald Trump announced “mutual” tariffs. This was despite the slight recovery of the prices after the White House leader announced the tariff environment.

Trump was still subjected to heat China, hiking tariff rate on Chinese goods up to 125%.

“The collapse in the goods (prices) is a switch that is a sign that the world recession is,” said Mark Papik, Macro and Geopolitical BCA research expert.

China is the largest consumer of goods, and the tariffs higher than expected can be dragged not only to the growth of the country, but also to the consumption of some goods, in particular energy and industrial metals.

Of all the goods in the basket, energy fell most from April 2, falling by 12%, reports S&P Global’s GSCI Energy Gauge.

Industrial metals have accommodated the second most loss of about 9%and then soft goods that fell by about 5.2%, reports Global S&P.

As for oil, the broader negative moods also coincided with OPEC+ A recent decide to accelerate the group production rate increases. OPEC+ went on a hiking pace, but had previously decided. Oil prices are still on long-standing minimums, despite a slight rebound after Trump’s tariff turn, with the Brent benchmark for about $ 64.78 a barrel and an intermediate West Texas in the US-61.77 dollar per barrel. Oil prices are sensitive to the escalation of trade, given China’s status as the largest importer to raw and the fact that the rough goods are indicated in the US dollar.

Goldman Sachs reduced the oil price forecast for both rough landmarks up to $ 62 a barrel for Brent and $ 58 per barrel for the end of the year.

Expectations of further decline in goods prices provide an increase in the Choir of Recession in the United States. Jpmorgan is waiting American gross domestic product on contract by 0.3% This year, after a reliable year for growth.

“The broader step below that we have seen in crude oil since April 2, believes that the prices market for recession,” said Ing strategists.

“Prices for goods are hammered by rapid impaired sentiment because it is afraid in the world recession against the background of escalation of trade and geopolitical tensions,” said Sabrin Chavdhur, head of the BMI Fitch Solutions research department. She added that the likelihood that the United States is in recession is now more than 50%.

Industrial metals also continue to suffer when trading tensions and recession fear, taking into account the gloomy viewing of the property sector in China, she added.

In particular, copper is a leading indicator of economic health, given its use in many sectors. While copper futures in New York rallied on Wednesday, they are currently trading at $ 8,380 per tonne at NYMEX, which noted more than 16% decrease since April 2, FactSet data showed.

Metal markets are likely to remain pressure like China, the world’s largest copper consumerIncreasingly, it gets into account.

“With growth in the US is probably slowing down on the back of the tariffs, and China is already fighting for the revival of its economy, the demand for copper and other industrial metals is likely to weaken,” said Eva Manthi, Ing strategist.

Similarly, Goldman Sachs has reduced the copper price forecast, citing excess metal and the forecast of the stagnant economy.

“We expect that the GDP’s weak height, as well as the lower base of 2024, for demand in China, is expected earlier,” the investment bank writes.

In the case of recession in the US, Goldman Sachs predicts that copper prices may be minimized in Trump’s first trading war and Covid-19 pandemic, 6500 and 5900 per tonne, respectively.