Markets Don't Care About Trump's Trade TweetsThe Goldman Sachs team found that hat there was no obvious relationship between the Twitter mentions and the volatility index.As the global trade war heats up, with U.S. allies like the European Union and Japan signing trade pacts and NAFTA falling apart, President Donald Trump will frequently dispatch fiery tweets about the issue.
However, Trump’s tweets on trade matter fairly little for major markets, according to a new research note from Goldman Sachs.
Photo: REUTERS/Leah Millis
They found that there was no obvious relationship between the Twitter mentions and the VIX.
Goldman Sachs Global Investment Research
Typically, the VIX will go up when there is more anxiety, fear, and volatility.
Why isn’t the European Union and Canada informing the public that for years they have used massive Trade Tariffs and non-monetary Trade Barriers against the U.S. Totally unfair to our farmers, workers & companies. Take down your tariffs & barriers or we will more than match you!
— Donald J. Trump (@realDonaldTrump) June 8, 2018
Soybeans are an anomaly
The GS note pointed out that there is one commodity in particular that has felt the heat from the tweets — soybeans.
Soybeans have been particularly vulnerable because “it is not possible to completely reroute supplies should China levy tariffs on U.S. soybeans,” the analysts said.
I am in Brussels, but always thinking about our farmers. Soy beans fell 50% from 2012 to my election. Farmers have done poorly for 15 years. Other countries’ trade barriers and tariffs have been destroying their businesses. I will open…
— Donald J. Trump (@realDonaldTrump) July 11, 2018
The team had previously written about how when tensions rose between the U.S. and North Korea over their continued missile tests last year, Trump’s tweets “seemed to matter more for global risk appetite than the missile launches per se.”
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