Global macro overview for 01/05/2018

Global macro overview for 01/05/2018

The European Union strongly criticized the decision announced in March by President Donald Trump to introduce tax duties on steel and aluminum products imported into the United States. The Commission issued a statement on Tuesday morning after the US announced an extension to June 1 of the EU’s exemption from import duties on steel and aluminum. EU pointed out that the overcapacity in the steel and aluminum sectors is not the result of EU action. On the contrary, in recent months, “the EU has engaged at all possible levels (in talks) with the United States and other partners to find a solution to this problem “- the EU raport stressed. The EU also indicated its readiness to discuss current issues related to market access, but also stressed that as a longtime partner and friend of the United States, it does not intend to negotiate “under threat”. European Commissioner for Trade Cecilia Malmstroem has been in contact with US Secretary of Commerce Wilburek Ross and US Sales Representative Robert Lighthizer in recent weeks. These discussions will be continued. In reaction to the protectionist decisions of the White House, the EU announced the introduction of retaliatory duties on goods exported by the US, including, among others, products such as bourbon and Harley Davidson motorcycles. They come from states in which the Republicans are waiting for a hard break in the elections to the House of Representatives and the Senate in November of the current year. American trade sanctions were the subject of talks between President Trump and French President Emmanuel Macron and German Chancellor Angela Merkel who visited the White House last week. Mexico and Canada are currently renegotiating with the United States the historic NAFTA deal on free trade with the United States. Argentina, Brazil and Australia reached “essentially an agreement with the US” – avoiding additional duties on their steel and aluminum products and agreed to a quota system for these products. The US duties of 25 percent on steel and 10 percent on aluminum already includes exports to the US from Russia, China, Japan and other countries. Announced by President Trump in March this year, the decision resulted in falls in the stock markets, protests by heads of companies, whose production depends on these raw materials and the threat of retaliation by US trading partners. According to experts, the decision of President Trump was the fulfillment of the election promise for the electorate of the so-called “the rust belt” (mainly the Midwest USA), in which competition from cheaper steel and aluminum from abroad caused a breakdown in industrial production and high unemployment. The protectionist decision of the American president was supported by representatives of American steel and aluminum producers, the AFL / CIO trade union traditionally associated with the Democratic Party and a few legislators from the opposition Democratic Party, mainly from the Belt of Rust states. Let’s now take a look at the SP500 technical picture at the H4 time frame. The market has made a form of a Double Top around the level of 267.90 and then felt towards the support at the level of 264.12 (almost hit). The momentum is clearly below its fifty level and still points to the downside, so the lower levels might be tested pretty soon. The next important technical support is seen at the level of 260. 84.

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