India increased taxes on US products, in retaliation for US taxes on products partially made in India. Markets are getting used to this process, and have not really reacted as a result. It is escalation and not retaliation that worries investors.
Fed Chair Powell's remarks yesterday were consistent with a steady rate hike schedule (of course). Powell did comment that there were reports of firms cutting investment and hiring plans because of the trade uncertainty. If companies think the trade taxes will last, they may start firing workers and reversing investment in the US. Investors should monitor President Trump's approval rating alongside the level of tariffs.
The Bank of England is not expected to do anything today, but there is a sense that the bank would like to raise rates at some point. Signals will be looked for. The interminably tedious process of exiting the EU cleared another parliamentary vote last night. The process goes on, and on, and on.
The Bundesbank's Weidmann speaks today. The normal process is: the ECB tightens policy; ECB President Draghi sounds so dovish as to make markets question the tightening; Bundesbank president Weidmann points out that the ECB has, in fact, tightened policy.