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Trump tariffs gain some qualifiers, it’s decision day at the ECB, and ‘buy the dip’ is still a winning strategy. Here are some of the things people in markets are talking about today.

Exceptions

The White House appears to be softening its position on trade tariffs already, even before an executive order is signed. President Donald Trump’s adviser Peter Navarro said yesterday that Mexico and Canada would be initially excluded from the tariffs, a decision that would be reversed should the nations fail to negotiate a new North American Free Trade Agreement. He added that other American allies could use a similar system to ask for exemptions. Not likely to be on that list is China, which warned of a "justified and necessary response” in the event of a trade war. While the new rules were expected to be signed by Trump today, it now seems that may be pushed back to allow more time to prepare legal documents. 

ECB day

At 7:45 a.m. Eastern Time, the European Central Bank will announce its latest monetary policy decision, followed 45 minutes later by a press conference with Mario Draghi. Recent geopolitical developments, such as heightened risk of a trade dispute and the recent elections in Italy, coupled with continuing low inflation have analysts projecting no change in the bank’s forward guidance on its asset-purchase plan. Today also sees the publication of the ECB’s latest quarterly projections, which are said to show continued robust growth for the region. 

BTD

The selloff in U.S. stocks that was sparked by the resignation of Gary Cohn turned out to be very short-lived, with the S&P 500 Index finishing yesterday’s session broadly unchanged after dropping as much as 1 percent earlier. The move is seen as another vindication for the ‘buy the dip’ strategy that has consistently worked throughout the nine-year bull run in U.S. stocks. During the rout earlier this year, news stories featuring the bullish injunction surged to a record, with stock forecasters making the call vindicated during February’s recovery. Like all strategies, this one will probably work until it doesn't, with JPMorgan Chase & Co. executive Daniel Pinto warning that equities could fall as much as 40 percent in the next two to three years amid monetary tightening and rising inflation. 

Markets calm

Irrespective of the long-term outlook, markets, for now, are relatively calm. Overnight, the MSCI Asia Pacific Index rose 0.7 percent, while Japan’s Topix index closed 0.4 percent higher as trade fears eased due to the apparent softening of the White House position. In Europe, the Stoxx 600 Index was 0.2 percent higher at 5:45 a.m. in quiet trading as markets await the ECB decision. S&P 500 futures were flat, the 10-year Treasury yield was at 2.885 percent and gold was unchanged.

Coming up…

While the big event today is the ECB decision, this week’s main data point is tomorrow’s payrolls number. With that in mind, investors will keep an eye on weekly jobless claims data due at 8:30 a.m. following last week’s drop to the lowest level in almost fifty years. There is also news in takeovers, as details emerge of insurer Cigna Corp.’s $67 billion offer to buy Express Scripts Holding Co. 

What we've been reading

This is what's caught our eye over the last 24 hours.

To contact the author of this story: Lorcan Roche Kelly in Dublin at lrochekelly@bloomberg.net.

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