Trade war knocks marketsBy Arnaud Masset
Gary Cohn’s resignation as Director of the US’s National Economic Council suggests that President Trump is serious about a trade war. So global markets switched to risk-off, and Japan’s yen and Switzerland’s franc gained against the greenback 0.50% and 0.35%. The Euro hit 1.2434 during the European morning: we see 1.2550 as next target.
Developments in Korea are positive: Kim Jong Un, the North Korean leader, says he is willing to give up on its nuclear programme. Still, the South Korean KOSPI index followed the global trend and fell slightly. Maybe the inconsistency and unpredictability of Kim Jong Un is keeping investors on their toes.
Canada flatlines interestBy Vincent-Frédéric Mivelaz
Bank of Canada Governor Stephen Poloz is expected to maintain monetary policy at tomorrow’s meeting in Wellington, Ottawa. Currently at 1.25%, BoC’s lending rate benchmark is not expected to rise until the second half of 2018 (the last hike was this January).
Canada faces growing tensions with its prime commercial partner, the USA, on free trade in general and in particular on proposed tariffs for aluminium (10%) and steel (25%), Canada’s S&P/TSX index remained stable at 15’545, supported by major sectors and particularly Health Care, Materials, Energy and Financials while the only laggard remained Industrials. There was further weakness of CAD against major currencies. USD/CAD, EUR/CAD and GBP/CAD trade at 1.2929 (+5.41%), 1.6063 (+4.67%) and 1.7962 (+2.65%) since 1 February.