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Trump calls for additional trade tariffs against China, while India’s central bank explores the possibility of creating its own digital currency. Here are some of the things people in markets are talking about.
Trade, the News That Keeps On Giving
President Donald Trump has ordered U.S. Trade Representative Robert Lighthizer to consider $100 billion in additional trade tariffs against China. Earlier, Trump called Chinese President Xi Jinping a “friend” but said it’s time to stop China from “taking advantage” of America. Meanwhile, China has signaled that U.S. shale fields may follow the nation’s farms as a target if a trade war escalates. Trump also said that the European Union is solidly against the U.S. on trade. That came, of course, after the EU and Japan asked to join the U.S.’s World Trade Organization case over China’s alleged discriminatory technology licensing. (The EU and Japan said they had a “substantial trade interest” in the dispute proceeding.)
U.S. Payrolls on Deck
U.S. nonfarm payrolls may have grown by 185,000 in March, compared with a 313,000 gain in February, according to economist estimates compiled by Bloomberg ahead of the report, which is set to be released on Friday. The unemployment rate is expected to drop 0.1 percentage point to 4.0 percent, while average hourly earnings are seen rising 0.3 percent month-over-month versus a prior 0.1 percent. That's after a report Thursday showed the trade deficit widened for a sixth month and the share of small businesses raising pay hit a 17-year high. Meanwhile, Treasuries are back in selloff mode, and some investors who remained bearish even in the face of trade-war angst and tumbling stocks say Friday’s jobs report may propel yields higher still.
India Moves on Crypto
India’s central bank is exploring the creation of a digital currency even as it escalates a crackdown on existing instruments such as bitcoin. The Reserve Bank of India has set up a panel to study the desirability and feasibility of introducing a virtual currency, and the group will submit its report by the end of June. However, it also said it is banning banks and other regulated entities from providing services to users, holders and traders of cryptocurrencies. Also, the RBI painted a picture of a “Goldilocks” economy and lowered inflation projections.
Libor Fuels Pain in Asia, Too
Asian dollar bonds handed investors the worst first-quarter returns in two decades in 2018, as rising short-term interest rates cause some investors to unwind bets. Dollar-denominated notes in Asia ex-Japan lost 1.3 percent in the three months through March 31, according to an ICE BofAML index, the biggest decline for the gauge since its inception in late 1996. The three-month London interbank offered rate reached 2.33 percent this week, following a 62-basis point advance in the first quarter.
Investors in the Asian day will be keen to see if Japanese wage growth slowed again in February as economists estimate it did, and whether Hong Kong's PMI can climb even higher. LG Electronics reports earnings, while former South Korean President Park Geun-hye faces her first court ruling as prosecutors seek a 30-year sentence in a corruption scandal. The European day brings German industrial production numbers and French trade data.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Malaysia bans former premier Mahathir's party.
- JPMorgan's Jamie Dimon releases his annual letter to shareholders.
- Trump says he didn't know about his lawyer's payment to Stormy Daniels.
- A 1,200 percent stock surge turned this high-end builder into a billionaire.
- The former CEO of Mt. Gox is no longer a Bitcoin believer.
- A Brazilian judge orders the arrest of former president Lula.
- Could the party be over for synchronized global growth?
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