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Analysts at Danske Bank suggest that today’s key market event will be the implementation of US tariffs on USD34bn worth of Chinese imports (with a further USD16bn set to be levied at a later stage).  

Key Quotes

“China has stressed that it would not ‘fire the first shot’, but retaliate immediately in kind once US tariffs take effect. For markets it will be interesting to see how US President Trump reacts to Chinese retaliatory measures and whether he goes ahead with his plan to add further tariffs on USD200bn of Chinese products.”

In the US, the jobs report for June is due out: we estimate that payrolls rose around 190,000 and annual wage growth remained unchanged at 2.7% y/y.  Even if wage growth surprises on the upside, we do not expect the Fed to accelerate its hiking cycle, as it has said it tolerates inflation exceeding the 2% target temporarily.”

German industrial production will probably show a rebound in May.”