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ECB President Emphasizes Softening of Negative Rates | US-China Trade Negotiations Set to Resume

Published March 27, 2019

• The US and China are prepared to resume trade talks tomorrow with trade negotiator Robert Lighthizer and Treasury Secretary Steven Mnuchin due to speak in Beijing tomorrow with China’s Vice Premier Liu He. This comes as US February trade data is due, with markets expecting a smaller deficit from current levels.
• Today UK Parliament will vote on competing strategies to Prime Minister May’s Brexit deal. The array of possibilities range from a softer Brexit to a second referendum. Speaker of the House John Bercow will be deciding this morning which proposals to put to a vote. The move comes ahead of the EU’s Friday deadline for an agreement.
• President Trump’s possible nominee for the Federal Reserve, has caught many market participants unprepared in recent statements regarding monetary policy. Steve Moore stated in an interview that the Fed should immediately reverse policy and cut rates by half a percentage point.
• ECB President Mario Draghi spoke at an event in Frankfurt this morning and emphasized a softening of negative rates if they are found to harm overall euro monetary policy. Draghi continued to reinforce the need for an accommodative stance, stating that growth in the euro area will eventually recover.
• US 10-year bond yields dropped another five basis points this morning, while spreads from the three-month rate inverted further. Treasuries have rallied after the Federal Reserve signaled a conclusion to raising interest rates, of which has directed yields on 10-year notes down.