• The euro clawed back earlier losses on Monday but remained prone to volatility as initial results in Italian elections pointed to stronger-than-expected showing for euro-skeptic parties, with no major party blocs winning an outright majority.
The common currency found some support as Germany’s Social Democrats (SPD) decisively backed another coalition with Chancellor Angela Merkel’s conservatives.
The euro traded at $1.2320, slightly above its late U.S. levels, off its seven-week low of $1.21545, which it touched on Thursday.
The dollar index, which measures the greenback against a basket of major currencies, was mostly unchanged at 89.971, after falling against most currencies on Friday.
• Analysts caution that the Trump administration’s plan lacks details, but say tariffs would hurt manufacturers.
“Domestic producers of steel would make more money, while domestic consumers of steel would make less money,” said Steve DuBuc, a director at consulting firm AlixPartners’ automotive and industrial practice, noting that U.S. steel makers will“have increased pricing power” as steel imports become more expensive.
U.S. automakers stand to be among the most impacted. The sector accounted for 26 percent of U.S. steel demand in 2017, behind the construction industry’s 40 percent, according to data provider Statista.
Appearing on CNBC on Friday, U.S. Commerce Secretary Wilbur Ross said tariffs would have a“trivial effect.” He said the one ton of steel used per vehicle, at $700 per ton (0.907 metric tonnes), would have little impact on vehicle costs.
• The Bank of Japan must avoid a premature exit from its ultra-easy policy to ensure the economy is completely out of deflation, Masazumi Wakatabe, one of the two nominees for BOJ deputy governor, said on Monday.
• China aims to expand its economy by around 6.5 percent this year, the same as in 2017, while pressing ahead with its campaign to reduce risks in the financial system, Premier Li Keqiang said Monday.
The goal was kept unchanged even though the economy grew 6.9 percent last year and exceeded the government’s target. Sources previously told Reuters that China will maintain its growth target at“around 6.5 percent”.
China aims to pursue“stable and healthy development” of the property market in 2018 with an increased focus on providing affordable housing and developing the rental market, Premier Li Keqiang said in a government work report released on Monday.
China must make strong efforts this year to keep foreign trade stable and improving, the country’s top economic planner said on Monday in a work report at the opening of the annual meeting of parliament. And china opposes protectionism and supports the settlement of trade disputes through negotiation, but will“resolutely safeguard” its legitimate rights and interest, Premier Li Keqiang said in a government work report on Monday.
• A top trade adviser to U.S. President Donald Trump said on Sunday a process will be in place for businesses to get exemptions from the White House plan to place steep tariffs on steel and aluminum, offering the first indication a tariff hike could be less broad than first thought.
• “The messy Italian election result adds a bit to the nervousness to global equity markets at present,” said Shane Oliver, Sydney-based chief economist at AMP.
“The Italian election...does run the risk of making Italy’s public finances worse than they already are with no progress in addressing Italy’s long-term competitiveness problems.”
• Investors will keep an eye on a deluge of data this week, culminating in the U.S. non-farm payrolls on Friday. The annual opening of the National People’s Congress in China was another focus for investors. China’s parliament has kept the economy’s growth target at percent for this year.6.5
• Oil prices rose on Monday ahead of a meeting between OPEC and U.S. shale firms in Houston, raising expectations that oil producers would discuss further how to clear a global oil glut.
International benchmark Brent crude was up 19 cents, or 0.3 percent, at $64.56 a barrel by 0752 GMT.
U.S. West Texas Intermediate (WTI) crude rose 17 cents, or 0.28 percent, to $61.42 per barrel.
Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) and other global oil players are set to gather in Houston as CERAWeek, the largest energy industry conference, begins on Monday.
Reference: Reuters, CNBC
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