CDN NEWS | 
US NEWS 
March 5, 2018, by Lorcan Roche Kelly
(Bloomberg)
America first
The verbal tit-for-tat trade rift across the Atlantic heated up over the weekend when President Donald Trump tweeted that he would target European car imports in response to an EU threat to American products following the president’s announcement of tariffs on steel and aluminum imports. Trump’s trade advisors said in television interviews over the weekend that U.S. allies would not be excluded from metal import duties, with Peter Navarro, director of the National Trade Council at the White House, saying there may be exemptions for specific products deemed necessary for business growth. The president is expected to sign a formal executive order for the tariffs by the end of next week.
Inconclusive
Vote counting continues after yesterday’s election in Italy that saw a huge increase in support for anti-establishment parties, with the euroskeptic Five Star Movement and the anti-migrant League the big winners. With no party projected to gain a majority of seats in parliament, the arduous task of forming a government is likely to create weeks of uncertainty. Market reaction has been relatively calm, with Italian stocks and bonds erasing much of their early session losses by 5:40 a.m. Eastern Time. Elsewhere in Europe, Germany’s Angela Merkel will serve a fourth term as chancellor after the SPD membership endorsed entering a coalition with her party.
China aims
Premier Li Keqiang delivered his annual report to the National People’s Congress in Beijing overnight in which he announced a growth target of around 6.5 percent for 2018, while lowering the deficit goal to 2.6 percent. Continued economic liberalization is also on the cards, with the telecom, healthcare and education sectors targeted for greater foreign investment. The National People’s Congress continues over the next fortnight, with the country’s debt pile a key topic for discussion.
Markets mixed
Overnight, the MSCI Asia Pacific Index fell 1 percent, while Japan’s Topix index closed 0.8 percent lower as concerns over a potential trade war weighed on exporters across the region. In Europe, the Stoxx 600 Index was 0.6 percent higher at 5:40 a.m., as the gauge bounced from a one-year low reached on Friday. S&P 500 futures were flat, the 10-year Treasury yield was at 2.846 percent and gold was slightly higher.
Oil outlook
American production will dominate the global oil market for at least the next five years, according to a report by the International Energy Agency this morning. The success of OPEC’s deal to cut output in lifting the oil price has “unleashed a new wave of growth from the U.S.,” IEA Executive Director Fatih Birol said. In the market, a barrel of West Texas Intermediate for April delivery was trading at $61.66 amid concerns over Libyan supply.
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