As we know, the trade war that started last year has precipitated once again and it has been affecting markets negatively. Yesterday we heard quite a few comments from China’s officials which sounded like they are preparing themselves for a prolonged trade war, which would be the worst thing for financial markets.

Today, the Chinese are still standing on their side of the fence, so here are some of today’s comments:

• China is to set up ‘unreliable entities’ list to combat foreign firms that cut supplies to China
• Will disclose details of the list in the near future
• Says to draft list of ‘unreliable entities’ targeting foreign parties that are causing harm to Chinese firms’ interests

So, the comments point towards an escalation of the trade conflict between the US and China. As a result, risk assets such as stock markets are tumbling down while safe havens such as the JPY and GOLD are surging higher. I expect markets to continue like this until the end of the day when they will close for the weekend, so I’m trying to find a place to sell risk assets and buy safe havens.