Markets have reinforced after recent trade war jitters. Nikkei is steady, Hong Kong HSI reduced nearly -0.5%, Singapore Straits Time index rose 0.17%. WTI crude oil remained over 70 handle. Gold dropped to reach the 1253 minimum. Japanese Yen is still the firmest. Greenback and euro follow suit. New Zealand dollar is the softest, waiting for RBNZ rate statement.
Robert Lighthizer (US Trade Representative) opposed retaliatory tariffs from European Union and other World Trade Organization countries. He claimed the US actions were “wholly legitimate and fully justified”. The Trade Representative also declared: “these retaliatory tariffs underscore the complete hypocrisy that governs so much of the global trading system.” According to him, the EU and others claimed to champion the WTO but “their recent tariffs prove that they simply ignore WTO rules whenever doing so is convenient.” And: “when the EU and others falsely assert the U.S. steel and aluminum duties are safeguard measures, and impose retaliatory duties under this pretense, they do great damage to the multilateral trading system. Indeed, they show that they are willing to distort WTO rules to mean whatever they want, whenever they want.”
Raphael Bostic (Atlanta Fed President) expressed his doubts about this year’s rate path, caused by the impact of Donald Trump’s trade policy. He said there was “some likelihood I will be moving away from four as a real possibility”, adding: “progresses the way it has been the last couple of days” regarding the trade threats of Trump’s administration to trading partners. And Bostic noted that “the more it progresses in this more contentious way, the more it leads me to feel the risks are on the downside for the broader economy.” Bostic also noted: “the disruption that comes from this type of trade war is not going to be good for the cost basis for businesses and it makes me a bit concerned how robust the economy will perform moving forward.”
New Zealand ANZ Business Confidence fell from -27.2 to -39.0 in June. The Own Activity index lowered from 14 to 9. Trade surplus increased to NZD 294 million in May. Goods exports were up 10% to NZD 5.4 billion. Goods imports grew 5.7% to 5.1 billion. Today, Eurozone will release M3, US will announce durable goods orders, trade balance, wholesale inventories and pending home sales.