March 2 financial breakfast: Trump levy high tariffs Meilong Brexit speech countdown

On Thursday (March 1), US President Trump announced that tariffs on imported steel and aluminum will be imposed, with tax rates of 25% and 10%, respectively. Due to unfair treatment of US steel and aluminum products companies, possible tariff details will be announced next week. After the announcement of this decision, the market reaction was fierce, and investors speculated that with the rise of US trade protectionism, the global trade war may start. The three major US stock indexes fell rapidly. The Dow once fell more than 500 points, and the decline expanded to 2%. The rapid decline in market risk appetite has boosted the price of gold.

Federal Reserve Chairman Powell attended the Senate Banking Committee hearing and read the statement. During the speech, Powell pointed out that the US economy is growing steadily, wages are growing moderately, and slower wage growth is mainly affected by limited productivity growth. The labor market will further strengthen, and it is expected that the gradual rate hike will still be appropriate. Fiscal policy is one of the factors that affect the interest rate outlook and will greatly boost demand.

The British cabinet agreed that Teresa May’s Brexit speech would be a big step forward, and the cabinet held a two-hour discussion on the Brexit speech. A spokesman for the British Prime Minister said that the talks on the transitional agreement are progressing smoothly. The UK's goal is to reach a transitional agreement for the Brexit this month. Both sides should work hard to promote ambitious partnerships. Mei’s speech will announce the British negotiating position, and the speech still needs to be finalized after the cabinet discussion is over.

Oil prices closed down on Thursday and hit a two-week low. The dollar's strength and fears that US production soaring may weaken OPEC's fear of reducing global crude oil supply pressured oil prices, and both US and Brazil oil prices hit a new low in two weeks. For other currency holders, the price of goods denominated in dollars is higher. After the consumer inflation data showed the biggest increase in 12 months, the US dollar index hit a nearly six-week high on Thursday.

Italy will hold a general election on March 4, which is expected to push the complexity of the country's election to a new level. As the Italian people are disappointed with the unprecedented immigration and continued economic difficulties, anti-constitutional parties are booming. Coupled with a new, untested electoral system and a large number of undecided voters, observers say the unpredictability of the election results is very high.

Friday Preview

12:00 The Japanese House of Representatives held a parliamentary hearing on Bank of Japan officials, and Bank of Japan Governor Haruhiko Kuroda delivered a speech.

--:-- British Prime Minister Teresa May gave a speech on the Brexit, which will announce the Brexit strategy and its future relationship with the EU.

Review on Thursday

1 US President Trump: will impose tariffs on imports of steel and aluminum products;

2 European Commission President Juncker: US tariff decision is to openly intervene in the market;

3 Federal Reserve Dudley: Whether it will speed up monetary tightening remains to be seen;

4 Federal Reserve Chairman Powell testified on monetary policy in the US Senate;

5 EU's chief Brexit negotiator: The EU cannot and will not make concessions in principle;

6 The number of US initial jobless claims fell to the lowest level since 1969;

7 British Prime Minister Spokesperson: The UK's goal is to reach a transitional agreement for the Brexit this month;

8 Russian President Putin State of the Union Address: Russia needs to enter the world's top five economies;

[List of major global markets]

stock market

The Dow Jones Industrial Average closed down 420.222 points on Thursday, down 1.68% to 24,608.98 points. The S&P 500 index closed down 36.27 points on Thursday, down 1.34% to 2,677.56 points; the Nasdaq index closed at 92.45 points on Thursday. The decline was 1.27%, at 7180.56 points.

commodity

Federal Reserve Chairman Powell and the Federal Reserve's permanent voting committee Dudley both issued a hawkish speech to boost the dollar, suppressing the price of gold, and the price of gold fell by more than 1%. However, due to the sharp decline in the US dollar, the gold price almost recovered all the losses in the day. As of now, spot gold reported $1317.08 per ounce, a drop of 0.09%.

For other precious metals, spot silver prices rose to $16.47 per ounce, or 0.30%; spot platinum to 966.45 dollars per ounce, down 1.74%; spot palladium to $990.86 per ounce, down 5.01%.

US WTI crude oil closed at $61.34 per barrel on Thursday, down 0.49%; ICE Brent crude closed at $64.20 per barrel on Thursday, down 0.82%.

In addition to the above quotes for gold, silver and crude oil, Huitong.com also quotes the Shanghai Gold Exchange for you.

Foreign exchange

The Fed’s tone eclipsed the dollar, but the dollar was weakened by US President Trump’s announcement of high tariffs on imported steel and aluminum. As of now, the US dollar index has fallen to 90.27, a drop of 0.44%.

EUR/USD is now at 1.2267, up 0.60%; GBP/USD is now at 1.3777, up 0.12%; USD/JPY is now at 106.24, down 0.41%; AUD/USD is now at 0.7756, down 0.08%.

[International Finance News]

[US President Trump: Will impose tariffs on imports of steel and aluminum products] US President Trump believes that workers in the steel and aluminum products industry are not represented, and steel and aluminum products companies have been treated unfairly. He will impose tariffs on imports of steel and aluminum products, impose a 25% tariff on steel and a 10% tariff on aluminum products, and will prepare possible tariff details next week.

[European Commission Chairman Juncker: US tariff decision is to openly intervene in the market] The EU will propose countermeasures against the US steel import tariff policy. European Commission President Juncker expressed regret over the US decision on tariffs on steel and aluminum products. It is indicated that in the next few days, the EU will respond vigorously to US tariff decisions in accordance with WTO rules. Juncker believes that the US tariff decision is to openly intervene in the market, with the aim of protecting domestic industries, and has nothing to do with so-called national security considerations.

[Federal Dudley: Whether it will speed up monetary tightening remains to be seen] The global economy is in a period of common rise, and the Federal Reserve Dudley believes that the US economy will perform well in the next 1-2 years. The US commodity price is weak and the service price is moderate. He believes that raising tariffs will bring upward pressure on prices. It is increasingly believed that the Fed needs to raise interest rates and the development of the United States will surpass the trend. As inflation is still lower than expected, it is not too aggressive to raise interest rates. The four interest rate hikes this year are "gradual rate hikes." It remains to be seen whether the Fed will accelerate monetary tightening. In the case of low inflation, it is difficult to significantly tighten monetary policy.

[Fed Chairman Powell in the US Senate testified on monetary policy] Federal Reserve Chairman Powell attended the Senate Banking Committee hearing and read the statement. During the speech, Powell pointed out that the US economy is growing fairly steadily, wages are growing moderately, and slower wage growth is mainly affected by limited productivity growth. Powell expects that the gradual rate hike is still appropriate. He believes that the labor market will further strengthen regardless of whether inflation is raised or not. The unemployment rate in the US is at or near the natural unemployment rate. There is no evidence that the current economy is overheating.

[EU's chief Brexit negotiator: the EU cannot and will not make concessions in principle] The EU regrets the decision to leave the EU, but respects its choice. Barney, the EU's chief Brexit negotiator, believes that the disorderly Brexit will be a very bad result. I hope that the speech of British Prime Minister Teresa May will promote the Brexit process. Barnier said that the EU cannot and will not make concessions in principle, and the establishment of a free trade agreement with the UK is the only viable model. The UK may remain in the EU Customs Union, but it will have to take on more obligations, and even if it stays within the Customs Union, the UK will accept border inspections.

[The number of US initial jobless claims fell to the lowest level since 1969] The number of jobless claims in the United States to February 24 unexpectedly fell to 210,000, lower than the market expectations of 226,000, down to 1969. The lowest level. Tax cuts helped raise the savings rate to 3.2%, the highest since August, and 2.5% in December last year, the lowest since 2007. US inflation is expected to achieve a 2% target this year, as labor market tightening pushes up wage growth, tax cuts and increased spending also stimulate economic growth, leading to higher inflation.

[British Prime Minister Spokesperson: Britain's goal is to reach a transitional agreement for Brexit this month] The British cabinet agreed that Teresa May's Brexit speech will be a big step forward. The cabinet has made a long speech on the Brexit speech. 2 hours of discussion. A spokesman for the British Prime Minister said that the talks on the transitional agreement are progressing smoothly. The UK's goal is to reach a transitional agreement for the Brexit this month. Both sides should work hard to promote ambitious partnerships. Mei’s speech will announce the British negotiating position, and the speech still needs to be finalized after the cabinet discussion is over.

[Russian President Putin State of the Union Address: Russia needs to become the world's top five economies] Russian President Putin's State of the Union address pointed out that Russia needs to become one of the top five economies in the world and needs to increase per capita GDP by 50% in the mid-1920s. Medical expenses should be doubled during the year. Russia must ensure that GDP growth exceeds global levels. Putin said that the Russian central bank and the government must jointly promote economic growth and have the ability to cut interest rates if inflation growth does not accelerate.

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