IronFX Daily Market Outlook by Angelos Zittis | 23/03/2018
US exempts EU from trade tariffs, hits China
• Media suggests that the US will exempt EU from its planned tariffs, while on the other hand hit China.
• EU Officials welcomed the possibility of their exemption, while China plans retaliation acts with imposing tariffs on pork, to begin with.
• Current Chinese retaliation act is considered as constrained, as the size of the imports affected is considerably lower than the US.
• There seems to be a concern also within the US, for the effect of a wider tariff plan against Chinese products, as prices would rise.
• Should there be a further escalation of the situation we could see the US Dollar weakening in the long run.
Bolton to replace McMaster as national security adviser
• Trump announced with a tweet yesterday, that national security advisor McMaster is to be replaced by John Bolton.
• John Bolton is a former Fox News analyst, a hawk that supported the use of military means against N.Korea and Iran.
• Overall, after the appointment of Pompeo and now the appointment of Bolton, a hardening of the US positions on foreign affairs could be expected.
• As uncertainty increases, the USD could weaken in the long run.
Today’s other economic highlights
• US: Durable Goods for February, Survey:+1.5% mom Prior:-3.6% mom,12:00 GMT, positive for USD
New Home Sales for February, Survey: 0.623M, Prior:+0.593M, 14:00 GMT, neutral to positive for USD
• Canada: Headline CPI for February, Survey: +2.0% yoy Prior:+1.7% yoy, 12:30 GMT, positive for CAD
Core CPI for February, Survey:+1.4% yoy Prior:+1.2% yoy, 12:30 GMT, positive for CAD
Retail Sales for January, Survey:+1.1% mom Prior:-0.8% mom, positive for CAD
• Speakers: FOMC Member Raphael Bostic (12:10 GMT), MPC Member Gertjan Vlieghe (12:30 GMT), Minneapolis Fed President Neel Kashkari (14:30 GMT) and Dallas Fed President Robert Kaplan (15:30 GMT) speak.
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