The United States will impose tariffs on steel and aluminum imports from the European Union, Canada and Mexico from midnight Thursday, May 31, ending months of uncertainty over potential exemptions and sharply escalating the risk of a trade war. The announcement by Commerce Secretary Wilbur Ross was sure to cast a long shadow over a meeting of finance ministers from the world's Group of Seven top economies that opens later in the day in Canada.
When oil markets are headed towards rebalancing, any shocks due to supply shortage may lead to a huge spike in prices. Brent prices fell on Tuesday to a low of $73.47 per barrel, indicating that $75 may be a short-term top.
Not only is the dollar on the verge of a potential comeback, but there is the possibility that the Bank of England on Thursday might sound a lot less upbeat about the economy than the market currently expects.
The US dollar depreciated against majors in a week that had few economic indicators for investors to digest and left the market speculating about the chances of a US tax overhaul and the impact of the developments in Saudi Arabia over the weekend.
After yesterday’s big sell-off, a lot of people would be wondering if this is the start of something big, a long-overdue correction or a mere short-lived pullback in what has been a very strong bullish trend for the stock markets.