TARIFFS: Trump Trade Advisor Navarro Denies Reports Of Metals Tariff Reductions
Feb-13 15:22
White House senior counselor for trade, Peter Navarro, has denied to CNBC the Trump administration has plans to reduce tariffs on steel and aluminium products, per Reuters. Comes after Bloomberg reported, citing an FT piece, that “The Trump administration is working to narrow its broad tariffs on steel and aluminum products that companies find difficult to calculate and the European Union wants reined in as part of its pending trade deal with the US.”
- According to FT, “Officials in the Commerce Department and [USTR] believe the tariffs are hurting consumers by raising prices for goods including pie tins and food-and-drink cans.”
- Bloomberg noted, “Aluminum fell along with other metals as traders reacted to a possible reduction in the scope of US import tariffs on some aluminum and steel products. Prices fell as much as 2.7% on the London Metal Exchange, extending initial losses after [the FT report].”
- The speculated move has echoes of a November drawdown of tariffs on beef, coffee, tropical fruits, and other commodities, which appeared to acknowledge that tariffs had some impact on prices, ahead of a midterm election campaign that is likely to centre on affordability. AP noted in November that Trump’s “abrupt retreat from his signature tariff policy... is significant, and it comes after voters in off-year elections this month cited economic concerns as their top issue.”
- Reuters noted today, “Voters nationwide are worried about prices, and cost-of-living concerns are expected to be a major factor for Americans [at midterm elections] ... 30% of Americans approved of Trump’s handling of the rising cost of living, while 59% disapproved…”
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TARIFFS: Supreme Court Doesn't Rule On Tariffs Today
Jan-14 15:15
The Supreme Court is issuing 3 opinions today and none are on the White House's tariffs.
- The next date for opinions is not currently known.
- We await any updates to the Supreme Court's schedule to see if they will be issuing opinions next week.
GBP: EURGBP Testing Trendline Support, MS Recommend Buying Call Spreads
Jan-14 15:14
- It is worth highlighting that EURGBP has been testing trendline support in recent sessions. Drawn across the March and June lows from last year, the line intersects at 0.8653 today. Morgan Stanley have noted this level and believe EURGBP looks poised for a rebound, given both RSI and Bollinger bands suggest the cross has entered oversold territory, while also highlighting that positioning is stretched with GBP/EUR in the 92nd percentile.
- MS economists are below consensus on the upcoming UK employment data and their forecast of 3.99% for RPI is noticeably below RPI fixings (4.23%). This contrasts with market pricing of only 1-2bp of cuts at the February meeting, while their economists expect a 25bp cut.
- MS say at the same time, volatility is favourable for EURGBP longs and recommend buying a 1m 1x1 EUR/GBP call spread (buy ATMF, sell 0.8840 strike) at market. Importantly, the one-month covers both employment and CPI data, as well as the next BOE decision.
- We highlight that on the upside, primary resistance to watch is 0.8727, the 50-day EMA. A break of this average would be needed to indicate a possible technical reversal.
US: Second SCOTUS Ruling Still Not Tariffs, Could be 1-2 More Cases
Jan-14 15:09
- Supreme Court's second opinion of the day is not tariffs: Fourth Amendment case Case v. Montana, Scotusblog reports
- Judging by the amount of boxes presented to press, there could be 1 or 2 further case rulings today - but still no certainty IEEPA tariffs will be covered.
