US bourses extended earlier losses after US President Trump confirmed his intention to announce import tariffs on steel and aluminium next week. The tariffs do not only ignite trade-war concerns, they also carry the risk of putting upward pressure on inflation which could prompt a faster pace of tightening at the Fed. New York Fed President Dudley echoed such concerns and also pointed out that four rate increases across 2018 would still constitute a gradual pace. His comments were largely ignored by the Greenback in the immediate aftermath but plunged as the session unfolded with the Dollar Index lower by just under 0.5% at the bell while the Japanese Yen clawed back gains amid the equity drop. Meanwhile, the Euro derived a modicum of support from an ECB sources story that suggested the ECB are likely to discuss tweaking their communication stance next week. Elsewhere, oil prices closed in the red with US crude futures settling at $60.99 (-$0.65).
Following the US close, BoC Governor Poloz said it has taken time but the markets are adapting more to the BoC’s approach to stop providing forward guidance.
Ahead of the Asian open, New Zealand ANZ consumer confidence rises 0.6% m/m in February, while building permits climbed 0.2% m/m in January.
Looking ahead, we get Japan’s monetary base and Australia’s HIA new home sales.