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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

As conflicting Fed remarks put US dollar investors to the test and the UK/US PMI is in focus, GBP / USD pair is attempting to regain 1.2000

Alina Haynes

Mar 03, 2023 13:55

GBP:USD.png 

 

GBP / USD recovers from its weekly low as it re-establishes its hourly high near 1.1970 and records its first daily gain in four sessions on Friday morning. As the Federal Reserve (Fed) speakers struggle to defend the hawkish bias, the Cable duo pays little attention to the Brexit-negative headlines and the Bank of England's (BoE) officials' varying opinions.

 

According to Raphael Bostic, head of the Federal Reserve Bank of Atlanta, the central bank might be able to stop the present tightening cycle by mid- to late summer. Susan Collins, president of the Boston Fed, disagreed, telling Reuters that extra rate hikes are required to control inflation. She continued by saying that the size of interest rate rises will be determined by the inbound data.

 

On the other hand, Chief Economist Huw Pill told Reuters on Thursday that survey data that has since become accessible has surprised to the positive, suggesting that the present economic activity momentum may be a little better than expected. According to Reuters, the most recent decision maker panel (DMP) poll from the Bank of England (BoE) showed that "businesses' forecasts for their own-price inflation fell in February."

 

Boris Johnson, a former British prime minister, criticized Rishi Sunak, the current prime minister, for allowing the EU to maintain an excessive amount of power in the United Kingdom. Johnson of the United Kingdom added, "We must be clear about what is happening in this situation. This is not about the Kingdom regaining power. This is the EU kindly rejecting our requests in our own nation. Not by our rules, but by theirs." The Democratic Unionist Party (DUP) of Ireland voiced doubt about backing the most recent deal regarding the Northern Ireland Protocol prior to the debate in the British Parliament (NIP).

 

Wall Street finished on an optimistic note after a rough start, while the S&P 500 Futures were slightly down as of press time. In addition, the yield on US 10-year Treasury bonds increased to its highest level since early November 2022, crossing the 4% mark, while the yield on the 2-year bond increased to its highest level since 2007, reaching 4.94%. However, bond coupons have lately dropped from their multi-month peak.

 

Notably, the US-China friction at the G20 summit was stoked by the former's push for penalties against nations with close links to Russia and support for Moscow in the conflict with Ukraine. The following dovish Fed remarks and Sino-American trade discussion discourse appeared to have tempered the risk-averse mood.

 

Looking ahead, comments from lower-level BoE and Fed officials will be made to entice GBP / USD pair buyers after the final readings of the UK S&P Global/CIPS Services PMI for February, which are anticipated to support the original estimate of 53.3. However, the US ISM Services PMI for February, which is predicted to be 54.5 compared to 55.2 in January, will receive a lot of notice.

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