- US tariffs on China worry Asian markets
- EU inflation data waited
- Reserve Bank of Australia dilemma to be shown tonight
By David Johnson
The US has instigated work to place tariffs on $200 billion of Chinese imports. However, the tariffs may be 10% rather than the originally mooted 25%. That news knocked Asian shares overnight and escalates tension between the US and China. The US Dollar was largely unmoved and this afternoon’s Empire State Manufacturing Survey Index is unlikely to be enough to impact the USD to any great extent.
Next steps for Euro unclear…
Eurozone inflation data is due this morning and the forecasters suggest a small improvement is on the cards. The more significant news story is that there is pressure from within the European Central Bank (ECB) to start the process of unwinding the ECB’s massive bond holding – effectively reducing the level of quantitative easing they injected into the markets in the aftermath of the 2007 credit crunch. Restricting the amount of Euros in circulation will have an – as yet – unquantifiable impact on the value of the Euro, but we will watch with interest.
Reserve Bank of Australia in a pickle
Overnight tonight we will get the minutes from the last Reserve Bank of Australia (RBA) meeting. They are in a quandary; mixed economic data, but joint desires to boost the economy whilst not strengthening the Australian Dollar will keep the Aussie base rate flat for now.
UK awaiting key consumer data
Wednesday brings UK Consumer Price Inflation (CPI) data; a small dip to 2.4% is expected after last month’s 2.5%. That leaves wage price inflation running ahead of the cost of living rises, but we suspect Thursday’s UK retail sales figures will still show a small decline. I am sure someone will let us know whether it is Brexit, the weather, or something else that changed the number. There’s always a reason. And, of course, if the figure shows growth, that’ll be explained as Brexit, weather, or something, too.
Save the whales
And in a 41 to 27 vote, The International Whaling Commission (IWC) has rejected a proposal to lift the ban on commercial whaling. However, until they are stopped, Japan will continue to kill over 300 whales a year for ‘research purposes’ (presumably that is research into how much they can make from selling whale products) and Iceland and Norway will continue to kill 600 whales a year in total violation of the IWC agreement. So we fill the oceans with plastic, ping sonar at them to disorientate them and then harpoon the survivors. It’s tough being a whale, but maybe a little less tough if the IWC gets its way.