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On April 3, White House aide Peter Navarro said that US President Trump’s tariffs could increase revenue by three times the size of the World War II tax increase in 1942, and could become the largest tax increase in US history.On April 3, a research report by CLSA indicated that ChinaSoft International (00354.HK)s revenue fell 1% year-on-year to RMB 16.951 billion last year, and the first disclosed AI-related revenue was RMB 957 million, accounting for 5.6% of revenue. The companys price reduction strategy has led to a decline in gross profit margin, and the main reason for the lower-than-expected net profit is a one-time impact. The bank expects the companys fundamentals to improve this year, mainly because the number of employees increased in the second half of last year. The bank expects the companys net profit to reach RMB 748 million this year, up 45.8% year-on-year, and lowered the target price from HK$7 to HK$6.5, maintaining the rating of outperforming the market.On April 3, the Australian bond market has experienced a dovish turn since the White House announced its new tariff agenda. IG market analyst Tony Sycamore said that the market has priced in an 85% chance that the Reserve Bank of Australia will cut interest rates by 25 basis points in May. Subsequent rate cuts are expected in August and November, with a cumulative rate cut of 75 basis points by November. He added that US tariffs have far exceeded expectations, increasing the likelihood of a trade war and recession in the United States. He also said that since goods from countries such as Vietnam are now effectively shut out of the United States, cheap goods are expected to flood other Asian markets.Japan’s Chief Cabinet Secretary Yoshimasa Hayashi declined to comment when asked about the possibility of retaliation against U.S. tariffs.Japanese Chief Cabinet Secretary Yoshimasa Hayashi: We believe that the recent US tariff measures may have a significant impact on the multilateral trading system, and we strongly call on the United States to exclude Japan from these measures.

In ahead of US NFP and Eurozone Inflation data, EUR/USD seeks a range break near 1.0600

Alina Haynes

Jan 05, 2023 15:11

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During the Asian session, the EUR/USD pair attempted to break out of the consolidation range it formed above the round-level support of 1.0600. Given the risk-on market mentality, it is expected that the major currency pair will continue its upward trend.

 

In Asia, S&P500 futures are indicating a modest retracement, but the overall risk profile remains sturdy following Wednesday's strong advances. The US Dollar Index (DXY) is languishing below 104.00 and is likely to continue on edge as further reduction of inflation expectations in the United States is expected to keep safe-haven assets under pressure in the short term.

 

According to the Federal Open Market Committee (FOMC) minutes, all Federal Reserve (Fed) policymakers favored a more gradual rate of policy tightening. For Fed members to abandon their hawkish view on monetary policy, greater evidence of inflation moderation is required.

 

According to Reuters, the president of the Minneapolis Fed, Neel Kashkari, emphasized on Wednesday that the Fed must avoid hastily lowering the policy rate and reigniting inflation. In order to attain the inflation target of 2%, he suggested that the interest rate should peak at approximately 5.4% and then remain stable.

 

This week, investors will closely monitor the second catalyst considered by the Federal Reserve when crafting monetary policy. Friday's Nonfarm Payrolls (NFP) are projected to be 200K, a decrease from the previous report's 263K. In addition, investors will pay attention to the Average Hourly Earnings (Dec) data, which is expected to be 5% lower. Given that consumers will continue to have more discretionary spending, a rise in wage expenses may cause the Consumer Price Index to grow (CPI).

 

Investors anticipate the release of the Eurozone's Harmonized Index of Consumer Prices (HICP) on Friday. According to the consensus, the headline HICP is projected to decrease from 10.1% to 9.7%. Consensus has diminished as a result of falling energy prices and the government's one-time reimbursement of family energy expenses. Certainly, the European Central Bank (ECB) will be fascinated by this in the future.

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