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Key Points
  • Global markets remain unsettled by jitters from the ongoing U.S.-China trade war, with some reports suggesting that Washington could slap more tariffs on Beijing again soon.
  • At the same time, a growing economy has led to expectations of central bank tightening interest rates as they shift away from quantitative easing.
  • This has led to concerns over liquidity for emerging markets, which have already taken a hit this year as a result of economic crises in Turkey and Argentina.

Global stock markets remain rattled by uncertainty stemming from the ongoing U.S.-China trade war, with reports suggesting that tensions could rise again as Washington contemplates imposing more tariffs on Beijing.

The uncertainty on the trade front comes as the global economy continues to grow overall, with the U.S. Federal Reserve and other central banks expected to tighten monetary policy as they move out of quantitative easing. It could lead to a "liquidity squeeze" in some emerging markets, an expert has warned.

The concerns over future liquidity also come amid recent economic troubles in Turkey and Argentina, which have led to fears over contagion in the wider emerging market space. Some Asian currencies have been affected, such as the Indonesian rupiah which slid to its weakest level in more than 20 years, and the Indian rupee also took a hit.