Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European indices were rehearsing slightly higher. In an environment marked by the specter of a trade war spurred by US protectionist measures and the prospect of the Fed’s monetary future policy, today’s ECB meeting loses some prominence. As no decision on interest rates or debt acquisition program is expected, the focus of the investors will be on the content of the meeting’s announcement and in the words of Mario Draghi at the press conference. The ECB is preparing the market for the normalization of its monetary policy (the first step being the end of the debt acquisition program) by gradually adjusting the content of its announcements. The main question of today’s meeting will depend on the evolution of inflation. On the one hand, economic indicators continue to point to robust growth in the Euro Zone. On the other hand, specific inflation indicators do not note any increase in inflationary pressure. In order to find a consensus within the institution, it can not be ruled out that the release from today’s meeting will no longer include the phrase “the ECB is prepared to increase the size and / or duration of the debt acquisition program if necessary”. This phrase may be replaced by a more vague reference that signals a greater likelihood of this program ending in September than prolonging or increasing it.
US markets closed with contained oscilations after an under pressured start. The issue of customs tariffs remains the central theme on Wall Street. The resignation of Gary Cohn, Donald Trump’s senior adviser and free trade advocate, has given rise to fears about the consequences of the (still unclear) trade policy of the Trump Administration. However, in the second part of the session, a White House spokeswoman noted that Canada and Mexico, two of the largest US trading partners and NAFTA (free trade area) could be exempted of the customs duties that are likely to be introduced. According to the same source, the Trump Administration should announce between today and tomorrow more information on its customs policy.
The ADP report, which measures job creation in the private sector, indicated that 235,000 jobs were generated in February. This number, which surpassed the 195 thousand anticipated, confirms the dynamism of the labor market. The trade deficit deteriorated in January, having reached the maximum of the last 10 years (56 600 M.USD). The trade balance deficit was higher than estimated due to the 1.30% drop in exports, which is explained by the lower sales of aircraft and their components to foreign countries. Imports remained virtually unchanged. Interestingly, steel imports, which are at the heart of the recent controversy over tariffs, have remained broadly unchanged.
Asian markets continued to wobble according to the flow of news regarding the American customs policy, ending with modest gains. Although potentially tampered by lunar year celebrations, Chinese export values rose 44.50% in February, compared to forecasts of 13.60%. On the other hand, the growth of imports was more modest: 6.30% compared to the expected 13.60%