(News Bulletin 247) – The Parisian index is clearly losing ground at the start of the afternoon, while China declared that it was ready to go “to the end” in the trade war between it and the United States.

More than French political news, the markets are currently moving according to trade tensions between China and the United States.

This Tuesday, October 14, the CAC 40 lost 0.9% to 7,865.21 points at the start of the afternoon, a decline quite similar to that of the DAX 40 in Frankfurt (-1.3%) or the FTSE Mib in Milan (-1.1%).

The day before, all world markets had been buoyed by a softening of the tone used by Donald Trump towards China and its president, Xi Jinping.

Except that Beijing, for its part, has expressed its dissatisfaction. Quoted by the BBC, a spokesperson for the Chinese Ministry of Commerce accused the United States of practicing double standards, after Donald Trump threatened to reinstate 100% customs surcharges against China. “China’s position is constant. If there is conflict, we will fight to the end, if there is dialogue, the door is open,” warned this spokesperson.

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Tough session for the bibendum

“As we will have understood, trade tensions with China will continue. Nevertheless, the two countries need each other at this stage. Thus, President Trump’s extreme threats do not seem realistic. At the same time, Chinese foreign trade data show that the export machine is far from broken down. Year-on-year, exports have increased more than expected (8.3%)”, observe the economists at LBPAM.

Investors are – all the same – watching the presentation of the French draft budget this Tuesday, a text which contains the partial renewal of the corporate tax surcharge.

Market operators are also observing the political situation in Japan, where a divorce between the centrist Komeito party and the LDP (conservatives) compromises Sanae Takichi’s chances of becoming Prime Minister.

On the value side, Michelin shows the biggest drop in the CAC 40, after issuing a heavy warning on results. Publicis dropped 1.3%, after delivering a robust publication in the third quarter, but which was not enough to allay market fears about AI. Excluding CAC 40, Soitec lost more than 11%.

On other markets, the euro lost 0.16% against the dollar at 1.1552 dollars. Undermined by trade tensions and forecasts from the international energy agency which expects a market surplus of 2.2 million barrels per day this year and 4 million barrels per day next year. The December contract on Brent from the North Sea lost 2.3% to 61.9 dollars per barrel while that of November on WTI listed in New York lost 2.4% to 58.08 dollars per barrel.