This is seeing the overall risk mood slide back lower as we look towards US trading later. Trump’s tariffs announcement two days ago is just the start of all this uncertainty. The retaliations and negotiations are all part of what markets have to deal with next and China’s response is one of the bigger ones. And it looks like they’re choosing to go blow for blow, at least for now. There’s still about a week before the tariffs officially go into effect.

S&P 500 futures have now tumbled down by 1.5% and 10-year yields in the US have tripped to 3.90%, down 15 bps on the day.

In turn, USD/JPY has also slid from 146.30 to 145.80 at the moment as risk sentiment takes another blow ahead of US trading later.

This article was written by Justin Low at www.forexlive.com.