This article is from the source 'guardian' and was first published or seen
on .
It last changed over 40 days ago and won't be checked again for changes.
Markets shrug off trade war fears and Spanish vote ahead of US jobs data - business live
Markets shrug off trade war fears and Spanish vote as US jobs beat forecasts - business live
(about 1 hour later)
Here’s Liberal Democrat leader Sir Vince Cable on the US tariffs, courtesty PA:
Here’s ING strategist Viraj Patel on the US jobs numbers:
As well as being petty and most probably illegal, Trump’s trade war is ultimately self-defeating.
Hard to find a -ve in the US jobs report. Decent jobs, lower u/e rate, lower U-6 rate. +0.3% MoM wage growth was a rounding effect (+0.298%) which might be the only -ve one could cite (& lower participation rate). Soft reaction in #FX. NFP days mattering less these days... $USD pic.twitter.com/wrTOIpqzkb
In the inevitable retaliation, there will end up being tariffs on a plethora of US products from jeans to Trump Tower merchandise.
The US unemployment rate has fallen to a new 17 year low of 3.8%, slightly better than the 3.9% expected.
This shows how absurd it is for the likes of [UK international trade secretary Liam] Fox to pin their hopes on - and entrust our economic future to - a bilateral trade deal with the US.
yup, he knew.
We know he’s illogical and stubborn, but he claims to be a good businessman. Trump must back down.
April’s jobs figure was revised down from 164,000 - already weak - to 159,000 but March was higher than originally reported, up from 135,000 to 155,000.
Following the news of the US move, Fox had told Sky News the tariffs were “patently absurd” but said they would not affect a post-Brexit trade deal between the US and UK. He said:
On the wages front, year on year earnings were up 2.7% compared to 2.6% in April, in line with forecasts.
The US administration has made clear again this week that they are very keen to see an agreement with the UK but regard steel imports as an EU issue.
Perhaps no surprise given Trump’s positive tweet, but the US jobs figures are much better than expected.
The European Union is pressing ahead with its retaliation to the US trade tariffs:
Some 223,000 jobs were created in May compared to expectations of a 190,000 increase.
The EU is opening a case at the World Trade Organisation, after the US imposition of a 25% duty on European steel and a 10% duty on European aluminium came into force this morning. Cecilia Malmström, the EU trade commissioner, is also expected to announce retaliatory tariffs on classic American products, such as Levi’s jeans, bourbon whiskey, cranberries and peanut butter, at a press conference later on Friday.
Back with the EC, and commissioner Malmstrom says we are not in a trade war yet but in a very difficult situation brought on by the US. It is a very worrying situation, she says, it could escalate and the economic recovery risks being diminished by this. “ The US is playing a dangerous game here.”
“The European Union will today proceed with the WTO dispute settlement case adding those additional duties on a number of imports from the United States,” Federica Mogherini, the EU high representative on foreign policy, told journalists this morning. “The European Union measures will be reasonable, proportionate and in full compliance with WTO rules and obligations.”
Meanwhile, on the US jobs data which is due shortly, President Trump has tweeted about them ahead of time:
She was the latest European politician to hit back at the US decision, which has was described by President Emmanuel Macron of France as a “mistake” and the international trade secretary, Liam Fox, as “patently absurd”.
Looking forward to seeing the employment numbers at 8:30 this morning.
Speaking on Friday morning, Germany’s economy minister Peter Altmaier said he hoped that a decisive response from the EU would prompt the US president to think again. “We hope that the European response will result in a process of reflection in the USA,” Altmaier told German broadcaster ARD, adding that the EU may look to work with Mexico and Canada on trade, also hit by the new tariffs.
This is the first time a president had ever sent a signal to investors about what the jobs numbers might look like an hour before they came out. https://t.co/M8PaXsHnhg
Bernd Lange, the German socialist MEP who chairs the European parliament’s international trade committee, said the tariffs were “illegal” and insisted the EU would “make some countermeasures, no doubt about”. He said: “We chose also some symbolic products like Harley-Davidson to make clear here is a red card.”
On the US tariffs, she says the EU is talking to Canada, Mexico, as well as Japan. There might be others as well who will react.
Here is the full story:
Malmstrom says the WTO| complaint about the US tariff will be made in the next few days, and the EU is also making a challenge against China on intellectual property. She says:
Markets so far continue to be fairly relaxed about the prospect of a global trade war, and the ousting of Mariano Rajoy as Spanish prime minister. The resolution of the turmoil in Italian politics certainly seems to be helping sentiment, with Italy’s FTSE MIB now up 2.5%.
We are not choosing any sides. We are determined to deal with the root causes of the current tension in the trade system. But we need to do that within the rules.
Elsewhere Spain’s Ibex is up 1.77% following the vote against Rajoy, Germany’s Dax has risen 0.9% and France’s Cac has climbed 1.24%. In the UK, the FTSE 100 is 0.65% better. On Wall Street, the Dow Jones Industrial Average is forecast to open nearly 120 points higher. Craig Erlam, senior market analyst at Oanda said:
Here’s a link to the European Commission press conference by Commissioner Cecilia Malmstrom on the response to the US tariffs.
The imposition of steel and aluminium tariffs by the US on Europe, Canada and Mexico has drawn plenty of criticism from officials but maybe in a sign of how markets can become less sensitive to certain issues, the response has so far been fairly muted. Focus will now be on the retaliatory measures that these countries have lined up and whether that in turn triggers a larger and quite unnecessary trade war. Investors currently appear at ease with the situation but that could quickly change.
And a handy guide to the potential global trade war from ING Bank:
We're at red alert now as Mexico, Canada hit back against US steel and aluminium tariffs! Global trade war threat moves to DEFCON 4. pic.twitter.com/17igIUUVAY
Here’s a US Federal Reserve member on the trade tariffs:
Trade talks are increasing uncertainty in the economy, says the Fed's James Bullard https://t.co/D66FcM3RUN pic.twitter.com/wF1qhTzpSc
The voting in Spain by the way showed 180 in favour of ousting prime minister Rajoy, 169 against, and one abstention.
The Spanish vote has had less impact than the turmoil in Italy, says Seema Shah, global investment strategist at Principal Global Investors:
Much of the market panic around Italy was about the threat to its membership of the Euro area but, by contrast, all of the main Spanish political parties are supportive of the single currency. Presuming Sanchez does not try to hang on to power, Spain is likely to see new elections later this year and a market-friendly, pro-European government should materialise from there. In the meantime, given that the support of Basque nationalist MPs required a promise to not change the budget, Sanchez is unlikely to make sweeping changes to the budget.
Material economic progress has been made in recent years - Spain’s fiscal position has improved; unemployment has fallen; and the banking system has been strengthened - the latest political disruption does not upset the generally positive outlook for the Spanish economy. Of course, political uncertainty is never welcome, but it has been telling that Spanish bond yields have fallen again today. It seems that Italian politics are more important for Spanish markets than Spanish politics.
Here is Sanchez receiving the applause after becoming prime minister elect:
Its done. PM Rajoy ousted. Pedro Sanchez becomes PM-elect as Spain turns left.
The confidence vote is underway in Spain and here’s a link:
WATCH: Confidence Vote Underway In Spanish Parliament https://t.co/WWITKcZgC8
