A path to progress
Today's news headlines:
‘EU and US agree to suspend tariffs in Airbus-Boeing dispute’. US trade conditions under President Biden appear to be softening. Both the EU and US have now agreed to suspend punitive tariffs over a longstanding aircraft subsidies disagreement. It looks as though finally the 16-year long battle over state aid to Airbus and Boeing is set to end. Tariffs have been suspended for at least four months as they look to forge a permanent agreement on permissible aircraft subsidies. The news came a day after the US and UK also agreed to suspend punitive tariffs, which might be a signal that Trump-era political tensions are subsiding, allowing for a new era of US trade co-operation. (Financial Times)
‘US hiring roared back in February as Covid cases declined’. Friday’s non-farm employment release, which had the US economy creating 379,000 jobs in February, pointed to a sharp rebound in labour market conditions, stemming from a decline in coronavirus cases nationwide. The report triggered another sell-off in US government debt, as Treasury yields rallied to their highest since February 2020, with investors positioning for a period of higher inflation. However, the US is still 9.5m jobs short of pre-pandemic levels, with unemployment standing at 6.2%, almost double the March 2020 figure. (Financial Times)
Today's events, rates, and data
The US Dollar strengthened, and US equity futures fell since markets opened last night, caused by the latest sell-off in Treasuries. Equities elsewhere were mixed, with UK and European futures modestly appreciating overnight. Sterling was firm after a report that Japanese investors bought the most UK sovereign bonds in at least the past 15 years in January.
German Industrial Production: -2.5% vs 1.9% previously
BoE Gov Bailey Speaks: 10.00am