Market movers today

Fears of a trade war between the US and Europe could reignite today after Trump’s announcement yesterday that the US is proposing tariffs on EU goods worth USD11bn in response to EU subsidies to Airbus. While the amount is less than 0.1% of EU GDP, it would further increase tensions between the EU and US and stoke fears that Trump could move on to add tariffs on cars from the EU.

Focus continues on Brexit news today . PM Theresa May visits Chancellor Merkel and President Macron ahead of the EU summit tomorrow, Wednesday, see Reuters . Meanwhile, in London, law makers will have a 90-minute debate on May’s proposal to delay Britain’s departure date to 30 June from 12 April. For more on Brexit see Brexit Monitor: Long extension despite Brexit fatigue , 8 April 2019.

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On the data front, US small business optimism for March is due. After a big drop from November to January, the index rebounded in February and consensus looks for a small further increase.

An EU-China summit will take place in Brussels today. The two sides have struggled to agree on a joint declaration in preparation for the meeting, see SCMP .

Otherwise the markets will be waiting for the ECB meeting as well as the EU summit on Brexit tomorrow.

Selected market news

Risk appetite remained intact yesterday, as equities eked out further gains. Stock markets were mixed overnight in Asia, though, with Chinese stocks higher but Japanese equities trading in red territory. The news on Trump tariffs on EU will probably cause headwinds for European equities today.

Oil prices continued to push higher, with Brent oil moving above USD71 per barrel. Concern over supply in Libya continues to lift prices.

EUR/USD moved up yesterday following news that the ECB is in no hurry to review a tiering system. Bloomberg cited people with knowledge on the matter saying that EU President Mario Draghi’s call to reflect on softening the impact of negative rates on banks had spurred limited action inside the ECB.

US-China trade talks continue , albeit not physically but via video conference. A White House official said yesterday that the US is not yet satisfied about all outstanding issues but that progress was made at high-level talks last week, see Reuters . Trump said last week the talks would likely take another four weeks, but that a deal was very likely.

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