Strong Sentiment And Eased US-China Tension

Market Reviews

Sentiment at the US stock market have been significantly improved. DOW increased 230.94 points (0.96%) to 24264.30. Nikkei rose 1.5%. US and China finished concluded a so-called “first round of a trade war”. The date for execution of tariffs hasn’t been set yet and US have to go through the process of public input until May 22. Meanwhile, Loonie have been broadly boosted by NAFTA advance, and now it’s trading as the firmest. Swiss Franc and Japanese Yen are trading as the softest.

The US President Donald Trump softened his main NAFTA demand for more North American content in automobile production. This was considered as a step towards reconciliation between the negotiating countries. The offer will apply that threshold (85% of major components) to crucial parts, such as transmissions and engines. Canadian Foreign Minister Chrystia Freeland expressed her optimism, saying: “We’re making good progress in Nafta talks overall. Having said that, we’re not there yet.”

The greenback is recovering but the dynamic is so far uncertain. James Bullard (St Louis Fed President) stated that federal funds rate at 1.50-1.75% is more “neutral” comparing to 2017. That’s why, Bullard urged, there is no need in 2 more rate hikes.

Australian trade surplus lowered to 0.83 billion Loonie in February. German factory orders were up 0.3% mom. Today, Swiss will feature Consumer Price Index, Eurozone will publish Services PMI final, Purchasing Price Index and retail sales, Britain will release PMI, Canada will announce trade balance and the US will present Challenger job cuts, unemployment claims as well as trade balance.