Market Analysis: Cotton In ICE Period Rose Sharply Before The US Tariff Policy Was Announced

Last night, European and American stock indexes went out of the rebound market, and the prices of external commodities were different. Most varieties of London aluminum, sugar, cotton and so on fluctuated greatly. So we don't need to force an explanation from the perspective of fundamentals for the expansion of commodity volatility, for example, American cotton rose significantly by 2% last night.

On Tuesday, the Intercontinental Exchange (ICE) cotton closed higher, hitting a six week high in the session, as the USDA report showed that the US cotton planting intention was lower than expected. ICE The May cotton contract rose 1.42 cents, or 2.1%, to settle at 68.25 cents per pound, hitting a high of 68.32 cents since February 19.

We can really say that this is due to the market's delayed digestion of the USDA's planting intention report released the day before, but it is of no value and significance.

As the time node for the United States to announce a large-scale tariff increase policy approaches, the fluctuation of the overall market sentiment will naturally expand, and the degree of entanglement will also deepen.

On the one hand, combined with the previous market news and the corresponding market trend, the market actually hopes that the tariff policy can be clarified as soon as possible.

On the other hand, the market is also worried about the radical tariff policy and the negative impact of the radical policy on the global economy, and this high probability is the fundamental reason for the large fluctuation of most varieties in the external market last night.

Before the specific policy was announced, the White House press secretary said that Trump had made up his mind to levy additional tariffs, and the policy would take effect immediately after the announcement. However, the official also said that Trump would pay attention to the statements of overseas governments and enterprises on reducing tax rates later. At the same time, the US Secretary of the Treasury also said that the tariff to be announced is the ceiling, that is, the highest level tariff. After that, countries can take measures to reduce tariffs.

Did you find that the attitude of the US government is basically Trump's tough output, and then the relevant officials give a softening attitude, saying that the tariff matter can be discussed. But it is also true that terrorists can talk. What can a big country's government not talk about?

Moreover, Canada, the European Union, Mexico and other countries have given extremely tough responses to the threat of imposition. For example, the European Union reiterated yesterday that there are enough counter-measures at present, and all means can be considered for use. Among them, the most explosive ones have increased. Previously, it even threatened to directly power off three states of the United States, What is this equivalent to? Trump just wanted to eat more at the table and show his victory, but Canada directly lifted the table.

Therefore, considering the potential negative impact of the "indiscriminate" tariff levy model on the economy, and the risk of "lifting the table" of the levy objects, the US tariff policy may not be particularly radical, and there is also some room for discussion.

Then based on the existing information, the approximate rate of tariff policy will be announced at 4:00 a.m. Beijing time tomorrow. At that time, we will also give you an explanation at the first time. Please pay attention!