SMM News: early trading in the Asian market on Thursday, after the media said that the United States and Mexico did not agree on tariffs on Wednesday, the market risk aversion increased after the news, US stock futures fell, Dow futures fell more than 100 points at one point. Safe-haven assets, the yen and gold, rose in the short term. Investors will face a decision on interest rates from the European Central Bank on Thursday night, Beijing time, and markets expect the central bank to stand still, although ECB President Draghi's remarks at a news conference are likely to stir the market.
The United States and Mexico are said to have failed to reach an agreement on tariffs. U. S. stock futures fell sharply and safe-haven assets rose.
In early trading in Asia on Thursday, Beijing time, a piece of news came from the market about the negotiations between the United States and Mexico. A senior U.S. government official told NBC (NBC News) that trade negotiators between the United States and Mexico failed to reach an agreement at Wednesday's talks.
Neither the United States nor Mexico has reached an agreement on immigration or tariffs, according to the CNBC.
U.S. President Donald Trump has recently said talks with Mexican representatives on immigration are over and that some progress has been made, but not enough. Negotiations with Mexico will resume on Thursday. If no agreement can be reached, a 5 per cent tariff will be imposed next Monday.
"the higher the tariffs, the more companies will move back to the United States," he said. "
Mexican Foreign Minister Ebrad said after the talks that more negotiations will be held with the United States on Thursday and that a common position will be sought at Thursday's meeting. Today's meeting is not expected to solve all the problems, and tariffs were not discussed at Wednesday's meeting. But there is a consensus with the United States that the current immigration situation needs to change.
The Mexican peso fell short-term against the dollar after the latest news from the US and Mexico, extending its intraday decline to more than 1.3 per cent. At one point, the dollar broke through 19.80 against the peso.
Us stock index futures fell, the S & P 500 fell 0.5 per cent, Nasdaq futures fell 0.6 per cent and Dow futures fell more than 100 points at one point.
Us stocks continued their strong performance this week on Wednesday amid rising expectations for the Fed to cut interest rates.
The Dow Jones industrial average rose 207.39 points to 25539.57; the s & p rose 0.8% to 2826.15; and the Nasdaq composite index rose 0.6% to close at 7575.48. On Tuesday, after Federal Reserve Chairman Powell opened the door to a rate cut, the Dow soared more than 500 points, the second highest one-day gain of the year.
The safe haven assets, the yen and gold, have strengthened. The dollar hit a session low of 108.16 against the yen.
(dollar / yen 15-minute chart)
Gold rose slightly in the short term, hitting a session high of $1333.61 an ounce after closing at $1330.00 an ounce yesterday.
The White House talks came days after US President Donald Trump threatened to impose a 5 per cent tariff on all Mexican imports. During Trump's state visit to Britain, negotiators held talks to try to hammer out a deal.
The Trump administration has threatened to gradually raise these tariffs to 25 per cent by October unless Mexico blocks the flow of immigrants illegally entering the southern US border.
Trump announced the tariffs on an unexpected tweet on Thursday, saying they would "continue until illegal immigrants enter our country through Mexico."
The decision of the European Bank of Europe to attack and guard against the re-emergence of the big market in the market.
At 19: 45 Beijing time on Thursday, the European Central Bank will announce an interest rate resolution. At 20: 30 Beijing time, ECB President Draghi (Mario Draghi) will hold a press conference.
Markets expect the ECB to keep interest rates unchanged, although the ECB will release its latest forecasts, and Mr Draghi's speech has attracted a lot of attention. Mr Draghi is likely to provide more details about (TLTRO), the third round of targeted long-term refinancing, which will begin in September.
The ECB left interest rates unchanged at its April meeting and expects rates to remain at current levels until at least the end of 2019. European Central Bank President Draghi warned at a subsequent news conference that economic growth in the euro zone has cooled further this year and is likely to continue to deteriorate.
Mr Draghi said at the time that the current slowdown in the eurozone economy was likely to continue throughout 2019. "Executive committee members recognize the weakness of the cycle, the weakness of the economy and the fact that this weakness will continue into the rest of the year," he said. "
With inflation weak in the eurozone, investors need to guard against the risk of Mr Draghi's dovish comments this week.
This week, eurozone CPI rose 1.2 per cent in May from a year earlier, below expectations of 1.3 per cent and 1.7 per cent, falling to a more than one-year low. The core harmonic CPI rose 0.8 per cent year-on-year in May, also below expectations of 0.9 per cent and 1.3 per cent.
Bank of America Merrill Lynch (BofAML) said in a research note on Wednesday that the downside risk of the euro had increased by the time tomorrow's ECB policy decision arrived. "We have learned not to doubt the power of Draghi," said Bank of America Merrill Lynch in a research note released on Wednesday.
"while growth was unexpectedly strong in the first quarter, we do not expect the ECB to adjust its economic outlook, given the overall weakness in the second quarter," said analysts at Bank of America Merrill Lynch. At the same time, given the trade disputes and the uncertainty of Brexit, we believe that the overall risk is still downward. We think President Draghi is likely to release the sound of pigeons again. "
Bank analysts added: "overall, we believe the euro remains bearish, even though the currency is already under pressure because of weak economic data and trade tensions and the risk of Brexit."
Christina Iacovides, an assistant economist at the Capital Economics agency, pointed out that with energy price inflation falling and inflation falling below 1 per cent soon, the bank is expected to strengthen its monetary outlook on Thursday and further ease policy next year.
Stephen Hubble, chief analyst at Centtrip, commented, "there are a lot of considerations about the Bank of Europe's decision, and the content of Thursday's news conference will be a top priority." With the Trump administration's tariff threat to the European Union still on the table, Draghi will be forced to take action to deal with the storm. "
Frederik Ducrozet, institutional strategist at Pictet Wealth Management, said the fall in core inflation this week would only increase the dovish statement at Thursday's meeting of the European Bank of Europe, predicting lower expectations of inflation.
Bert Colijn, senior economist at Rabobank, said there was no doubt that the ECB discussion would be hot on Thursday as pressure was forcing the committee to step up its action.
Analysts point out that if Mr Draghi makes dovish comments today, it could hit the euro / dollar.
Kathy Lien, managing director of BK Asset Management, wrote a few days ago that the European Central Bank will hold a meeting on Thursday, which will be an important meeting. Details of the TLTRO plan will be released and economic forecasts will be updated. At that time, ECB President Draghi will decide whether the European economy is weak enough to signal the need for more stimulus.
The Lien noted that the eurozone was in a phase of low growth and that although it had improved since the last monetary policy meeting, the most important drivers of monetary policy-consumer spending, inflation, manufacturing activity and retail sales-had weakened. The euro fell sharply against the dollar after the last meeting, when they launched the TLTRO, if the ECB cut its growth and inflation expectations, the euro / dollar could fall further.