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Investment Bank

Investment Bank

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Tariffs for some, exceptions for others

Aziz Sunderji, Zoso Davies, Juan Prada

  • Risk assets retreated across the board after more details regarding the US administration’s plans for tariffs were announced. The Trump administration announced its intention to impose trade restrictions on a number of products imported from China in retaliation for its intellectual property practices. The restrictions and penalties are likely to come in the form of tariffs and could be placed on USD50-60bn worth of imports. We expect China to pursue a formal challenge through the WTO. At the same time it was revealed that a list of US allies including Europe and the NAFTA countries would be shielded from the steel and aluminum tariffs that take effect today.
  • We expect the Central Bank of Russia to cut its benchmark key rate by 25bp to 7.25% today. With inflation remaining well below the CBR’s 4% target and the outlook showing no signs of improvement, we expect three more 25bp cuts in the first half of this year.
  • Today’s key economic release is US durable goods orders, which we forecast to rise 2.3% m/m, mainly driven by transportation orders. Yesterday, the euro area “flash” PMIs surprised to the downside, driven equally by manufacturing and services. The normalization of PMIs in Q1 18 indicates a downside risk to our soft 0.6% q/q growth forecast.
  • As expected, the BoE kept monetary policy unchanged yesterday, with the vote regarding rates split 7-2 in favor of no change and the dissenting voters noting that rising wage growth would present upside risks to the medium-term inflation outlook. In Taiwan, although rhetoric from the central bank came across as more upbeat, it also chose to leave its benchmark policy rate unchanged at 1.375%. We expect both central banks to raise policy rates later this year. The central banks in the Philippines and Indonesia also kept rates on hold.
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Barclays Live app for iPad and Android tablets

The Barclays Live app for tablets helps institutional clients to cut through the information deluge. Interactive tiles allow clients to view the content they want, store it for offline use, annotate it on the go, and more. It's Barclays Live, now tailored for you on iPad and Android tablets.

More about Barclays Live app
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