Asia Summary and Highlights 27 March
Trump's 25% auto tariff on foreign-made cars start on April 2nd
Trump has allowed a one-month tariff exemption for auto parts imports
Trump said he may reduce tariffs on China to help facilitate TikTok US operations sale
Asia Session
The tariff man strikes again as Trump announced a 25% auto tariff in late NA session on Wednesday. Risk sentiment was poor globally and see U.S. Treasury yields lower. USD/JPY is trading 0.19% lower at 150.27 and hears the Japanese government wans of significant impact from the latest tariff given the significance of the Japanese auto industry.
The broad risk sentiment remains choppy after Trump's latest tariff. Both the U.S., Chinese and Hong Kong equities are off session lows and recouped partial overnight losses while Japanese equity remain low. AUD/USD is up 0.24% to 0.6312, NZD/USD also up 0.24% to 0.5741 while USD/CAD is unchanged. Else, EUR/USD is up 0.22% and GBP/USD is up 0.26%.
North American session
The UK spring statement had little impact, but GBP maintained its post-CPI losses. The USD had a generally positive tone early on, supported by stronger than expected February durable goods orders, up 0.9%, 0.7% ex transport, and USD/JPY advanced to a high of 150.75.
News that Trump was planning an announcement on auto tariffs sent equities lower. The hit to USD/JPY was modest, to around 150.50, but EUR/USD slipped to 1.0750 from 1.0785 while USD/CAD rose to test 1.43 from a low of 1.4235, despite Bank of Canada minutes from March 12 showing caution over future easing. AUD/USD fell below .63. Fed’s Musalem warned over the inflationary risks of tariffs.