US tariffs and the expanding global trade war continues to dominate markets. Trump effected the 25% tariff on Canada and Mexico and increased the Chinese tariff to 20%. Trump announced reciprocal tariffs would commence April 2nd and apply globally. Markets are clearly concerned about the impact of a global trade war and equities have been battered. The ADP Jobs Report in the US, saw a sharp decline in jobs added to the private sector economy, suggesting a weaker than expected Non-Farm Payroll number on Friday. The US Dollar lost further ground, with the EUR jumping to 1.0770, while the GBP spike to 1.2870.Chinese leaders met in the National People's Congress and set the growth target of 5% for the year, while increasing the debt to GDP to 4%. This confirms that the Chinese Government expects massive fiscal stimulus in the current year. This was also indicated by Germany, who are looking at abolishing the ‘debt brake’, to enable expended deficit/debt spending. The solution to ballooning deficits and debt appears to be more deficit and debt. Commodity currencies gained on the tumbling reserve, with the AUD reaching 0.6300, while the NZD looks to regain 0.5700.
