US President Trump proposes new Auto Import Tariffs up to 25%

The US is considering new tariffs of up to 25% on imported vehicles and the President has instructed the Commerce Department to investigate the proposal on section 232 national security grounds. This has seen risk sentiment remain subdued with USDJPY down to fresh lows around 109.400 after falling from highs of 110.800 yesterday. This is negative for auto companies selling into the US but plans are in their early stages. US equity markets are off the lows from yesterday but Asian markets fell lower overnight with the Japanese market down to 22400.00 as a result. Reports from North Korea added to the negative sentiment after they suggested that they are reconsidering their upcoming meeting with the US after a verbal spat with the US Vice President. AUDUSD recovered earlier losses to trade around 0.78890. The US dollar selling accelerated after the FED minutes with 10 year yield falling under 3.00% after a strong hint of a rate hike at the 13TH of June meeting. Eurozone Markit Manufacturing PMI (May) was 55.5 against an expected 56.0 from 56.2 previously. Markit Services PMI (May) was 53.9 against an expected 54.6 v 54.7 previously. Markit PMI Composite (May) was 54.1 against an expected 55.1 from 55.1 prior. This data came in softer once again after hitting highs in December and January. The continued fall in this data will be of concern for the ECB and may slow the path of monetary policy. EURUSD fell from 1.17169 to 1.16984 at which point buyers stepped in and brought price back up to 1.17474. UK Consumer Price Index (YoY) (Apr) was 2.4% against an expected 2.5% from 2.5% previously. Core Consumer Price Index (YoY) (Apr) was 2.1% against an expected 2.2% from 2.3% prior. Consumer Price Index (MoM) (Apr) was 0.4% against an expected 0.5% from 0.1% prior. Retail Price Index (MoM) (Apr) was 0.5% versus an expected 0.5% against 0.1% previously. Retail Price Index (YoY) (Apr) was 3.4% against an expected 3.4% from 3.3% prior. These data points show CPI slipping slightly again. The yearly figure is still above the Bank of England’s 2% target since March of 2017 due to the change in the value of the pound after brexit. However the BOE says that inflation is likely to move back to 2% in 2018. Producer Price Index – Input (MoM) n.s.a. (Apr) was 0.4% against an expected 1.0% from -0.1% previously which was revised up to 0.1%. Producer Price Index – Input (YoY) n.s.a. (Apr) was 5.3% against an expected 5.8% from 4.2% previously which was revised up to 4.4%. Producer Prices increased from previous readings, with higher revisions, but not by the amount expected. GBPUSD fell from 1.33832 to 1.33459 after this data release. US Markit Services PMI (May) was 55.7 against an expected 54.9 v 54.6 previously. Markit PMI Composite (May) was 55.7 against an expected 55.0 from 54.9 prior. Manufacturing maintained its strong improvement since a low in May 2016. US New Home Sales (MoM) (Apr) were 0.662M against an …