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Some countries may not face U.S. tariffs on steel and aluminum imports after all, while the European Central Bank meets Thursday. Here are some of the things people in markets are talking about.
Trade Tariff Carve Outs
The U.S. may exempt some countries from planned tariffs on steel and aluminum imports, White House Press Secretary Sarah Sanders said Wednesday. "There are potential carve outs for Canada and Mexico based on national security and possibly other countries as well," she said. Treasury Secretary Steven Mnuchin said Wednesday he believes tariffs will benefit American workers, despite the risk of retaliation. Meanwhile, the Trump administration is considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property, according to people familiar with the matter. An announcement by the U.S. Trade Representative's office about China's IP practices is expected in the coming weeks, potentially handing U.S. President Donald Trump further cause to impose trade restrictions.
What We Learned About the BOJ
The Bank of Japan is set to keep its massive monetary stimulus unchanged for the foreseeable future, with the three nominees to lead its board stressing that inflation is too far from target to begin normalizing policy soon. Taken from a combined 12 hours of testimony in parliament, we also learned that an exit may be considered, but not conducted, in fiscal 2019, according to Governor Haruhiko Kuroda. Deputy Masazumi Wakatabe pledged to support the governor, prompting some economists to see a low chance of his dissent from a majority in his first meeting in April. The other deputy, Masayoshi Amamiya, conceded that there are limits to monetary policy and he noted that the BOJ's policies are negatively affecting private banks.
It's ECB Time
With the euro having snapped a three-month rally in February, the European Central Bank may not allude to currency strength when it meets Thursday. Policy makers may instead be content with tweaking their forward guidance, analysts say. Recent news events, including an anti-establishment surge in Italy, underpin the argument for policy makers led by President Mario Draghi to avoid any sudden moves. Still, surprises could still come in the form of fresh quarterly projections from ECB staff economists.
The Fed's Looking at ‘Moderate Inflation'
A tight U.S. labor market was helping lift wages across most of the country through late February and contributing to “moderate inflation” in most areas, a Federal Reserve survey showed. The central bank's Beige Book economic report, based on anecdotal information collected by the 12 regional Fed banks through Feb. 26, showed that the nation's “modest to moderate” expansion was spreading the benefits of higher pay more widely. The survey also contained evidence that a pickup in inflation was more broadly based.
Coming Up…
A meaty day of Asian events starts with Japan's data dump of GDP and BOP releases, and also includes China and Aussie trade releases and Thai consumer sentiment. It will get even more exciting in the European session with an ECB policy meeting looming large. They aren't expected to change policy but the Governing Council may discuss changes to pave the way for the end of quantitative easing. The ECB also publishes economic forecasts. Other highlights include German factory orders and Dutch CPI. The American session will bring Mexican inflation data and reports from Canada on house prices and building permits.
What we've been reading
This is what caught our eye over the last 24 hours.
- Xi Jinping's bid for lifelong power could backfire.
- The biggest risk facing Asian stocks? Trump.
- Bitcoin's Tokyo Whale sold $400 million and isn't done yet.
- Australia is selling $280 steaks to the Chinese.
- Kim Jong Un comes around to talks while his currency reserves shrink.
- Why fewer women in India are working.
- Coke gives Japanese customers a new way to get buzzed.
--With assistance from Garfield Clinton Reynolds Andrew Mayeda Jennifer Jacobs Toru Fujioka Charlotte Ryan Anooja Debnath and Christopher Condon
To contact the editor responsible for this story: Boris Korby at bkorby1@bloomberg.net.
©2018 Bloomberg L.P.
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