Government reopens, Trump imposes solar tariffs, and the Bank of Japan does nothing.
Open for business
The U.S. government will remain open for business until at least Feb. 8
following a deal brokered in the Senate yesterday in which Majority
Leader Mitch McConnell agreed to address Democrat concerns about
protection for young undocumented immigrants. Getting a deal on immigration
is likely to remain the biggest sticking point, and the hottest topic
for debate, during the three-week window secured yesterday. A revision
to the wording of the bill may
hinder congressional oversight of intelligence agencies, according to
Senator Richard Burr, the North Carolina Republican who chairs the
Intelligence Committee.
Tariffs
President Donald Trump slapped a 30 percent tariff on imported solar panels,
and duties of up to 50 percent on washing machines in response to
two U.S. International Trade Commission rulings on unfair practices.
While the headlines look bad for exporters to the U.S., the market
reaction has been relatively muted, with the tariffs announced less severe than feared. It will also help domestic producers, who have struggled in the face of cheap imports. That said, the imposition of these duties further inflames trade tensions.
Monetary decisions
The
Bank of Japan kept its massive stimulus on track while making no
changes to inflation and economic forecasts. In the post-decision news
conference, Governor Haruhiko Kuroda said that it’s too early to consider policy normalization. Thursday
sees the European Central Bank’s latest monetary-policy decision, and
while no change is expected, economists have been bringing forward their
predicted end date for the asset-purchase program.
Markets mixed
S&P 500 futures pointed to a weaker opening, the
10-year Treasury yield was 2.630 percent and gold was slightly higher.
Overnight, the MSCI Asia Pacific Index rose 1 percent, while Japan’s
Topix index closed 1 percent higher as benchmark indexes across the
region hit new all-time highs. In Europe, the Stoxx 600 Index
edged higher at 5:45 a.m. Eastern Time.
Davos
The annual meeting in Davos, Switzerland is underway,
and with the end of the U.S. government shutdown lifting doubts over
Trump’s attendance, it now seems that this play will get its prince.
Keep up with the latest from the event with Bloomberg’s rolling coverage.