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On April 3, Kimberly Clausing, a former Biden administration official and nonresident senior fellow at the Peterson Institute for International Economics, called Trumps tariff announcement on Wednesday "very stubborn and much worse than I expected." "I expected things to be bad, but I didnt expect this level of self-harm. Its shocking that anyone thought this was a good idea. Id be shocked if we can get through this without a recession and Trump doesnt have to reverse his policies."On April 3, some economists worry that if Trump does not quickly cancel the latest round of tariffs, it may push the US economy into a recession. "If the US government implements these higher tariffs without major exemptions, it will be difficult for the economy to digest this. A recession seems more likely." said Mark Zandi, chief economist at Moodys Analytics. Zandi said, "In many ways, the tariffs announced by Trump are even worse than the worst case scenario he envisioned. If they stick to it, I will buckle up and prepare for the impact." Zandi added that on a static basis, tariffs account for nearly 2% of GDP (not considering the impact of tariffs on the economy and taxes), which makes this round of tariffs the largest tax increase since the tax increase used to finance the war during World War II.German Automobile Industry Association VDA: The EU must now speed up and make up its mind on the issue of free trade agreement.On April 3, the Reserve Bank of Australias latest report for the banking industry warned that continued uncertainty in US trade policy "could have a chilling effect on business investment and household spending decisions, and pose a significant headwind to the outlook for global economic activity and inflation." The Reserve Bank of Australia said there was also considerable uncertainty about the impact of possible changes in fiscal, regulatory and other government policies on global growth and inflation.The Hang Seng Index in Hong Kong opened on April 3 (Thursday) down 564.32 points, or 2.43%, to 22,638.21 points; the Hang Seng Technology Index opened on April 3 (Thursday) down 168.53 points, or 3.11%, to 5,257.91 points; the CSI 300 Index opened on April 3 (Thursday) down 219.05 points, or 2.57%, to 8,312.46 points; the H-share Index opened on April 3 (Thursday) down 61.24 points, or 1.59%, to 3,800.76 points.

GBP/JPY finds support close to 167.30 as focus shifts to UK inflation and BOE policy

Alina Haynes

Dec 12, 2022 15:42

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The GBP/JPY pair is gauging demand after slipping to approximately 167.30 during the early Asian session. After failing to surpass the 168.00 round-level barrier, there was selling pressure on the cross. In the interim, the GBP/USD pair has retraced ahead of the Federal Reserve's (Fed) monetary policy, suggesting a cautious market tone.

 

As the policy divergence between the Bank of England (BOE) and the Bank of Japan (BOJ) is projected to widen further in the wake of the Bank of England's (BOE) interest rate hike on December 15, the cross is forecast to recover significantly.

 

Despite the recession, the Bank of England will increase interest rates by another 50 basis points (bps) next week, boosting the cost of borrowing to 3.50 percent, according to a Reuters poll. To eliminate inflationary pressures in the United Kingdom, additional policy tightening is necessary.

 

But before that, investors will focus on the United Kingdom's inflation data on Wednesday. According to projections, the annual inflation rate for November would likely increase from 11.1% to 11.5%. The recent rise in food price inflation, caused by a labor shortage and rising input costs, has raised expectations for the headline inflation rate.

 

As a result of a decrease in Gross Domestic Product (GDP) data, the likelihood of a dip in Tokyo's inflation has increased. A decline in demand never causes the price increase index to rise. Even if salaries climb by 3%, Bank of Japan (BOJ) Governor Haruhiko Kuroda believes the BOJ would retain its current easy monetary policy until inflation reaches 2%.