U.S. trade partners fight back, it’s decision day at the Bank of England, and OPEC inches towards an output deal. Here are some of the things people in markets are talking about today.
India became the latest country to hit back at U.S. tariffs when it announced new import duties on a slew of items from agricultural produce to chemicals and steel products. China said that it is “fully prepared” to respond to fresh U.S. trade measures, with a spokesman saying Beijing is prepared to use a combination of quantitative and qualitative measures. Tomorrow sees the European Union’s retaliation for President Donald Trump’s steel and aluminum measures kick in, with a 25 percent duty on 2.8 billion euros ($3.2 billion) of U.S. imports. The tariffs are paying off for Washington in the short term at least, as the administration has collected more than $775 million in duties so far.
Bank of England
At 7:00 a.m. Eastern Time, the Bank of England will publish its latest monetary policy decision. All 38 economists surveyed by Bloomberg expect no change in rates, with a consensus for a 7-2 vote split. Investors will look to the minutes of the meeting to try to gauge the timing of the bank’s next hike, with the outlook clouded by increasingly downbeat economic data. Leaving the European Union still remains one of the biggest uncertainties, a risk that was not alleviated by Prime Minister Theresa May’s vote victory in Parliament yesterday, which may actually serve to increase the chances of a so-called hard Brexit.
Tomorrow’s meeting of OPEC and its allies in Vienna is coming down to the wire on whether changes to the current production deal can be agreed. The latest attempt from Saudi Arabia sees a 600,000 barrels a day increase, with the number based on a complex calculation of how much countries have reduced production beyond the initial cut target in 2016. A barrel of West Texas Intermediate for August delivery traded at $64.73 by 5:45 a.m. as rumors and counter-rumors continue to move crude prices.
Overnight, the MSCI Asia Pacific Index fell 0.6 percent as the region’s markets remained under pressure from the trade standoff. The Philippine Stock Exchange Index sank 2.3 percent on Thursday, pushing the gauge into a bear market. In Europe, the Stoxx 600 Index was 0.3 percent lower at 5:45 a.m. with most industry sectors except consumer staples and health care falling. S&P 500 futures pointed to a drop at the open, the 10-year yield was at 2.913 percent and gold was lower.
There was some good news for Argentina and Saudi Arabia yesterday when both countries were added to MSCI Inc.’s group of emerging markets. Analysts say that the upgrade could spur a relief rally for the embattled asset class. Investors in Turkey needs some good news ahead of the election on Sunday, with bond, currency and stock markets all under pressure.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Trump retreats on family separation, signing order he says will end policy.
- Jack Dorsey’s Twitter, Square are both on the verge of doubling this year.
- America is less white, getting older, and more urban.
- Daimler becomes first to predict profit hit on trade war.
- The city that defined Brexit has given up.
- How to sign up for Bloomberg on WhatsApp.
- Growing Neanderthal brains.
©2018 Bloomberg L.P.