Trading in the Asia Pacific region today will likely range from quiet to listless. Despite the announcement of new tariff protection for US industry the real intent of the sanctions, and their impact, is not clear. Markets will await further details and important data due tonight.

In a surprise move the European Central Bank changed the language of its regular post-meeting statement. The promise to increase bond purchases should the economy require was erased. However ECB president Mario Draghi confirmed his status as the central bankers’ central banker with a superb performance, balancing the hawkish move with downward revision of inflation expectations and a dovish listing of potential downside risk. The Euro initially strengthened, then weakened, indicating the ECB’s even handed moves were taken at face value.

New US trade barriers will exempt important neighbours such as Canada and Mexico (contingent on a successful conclusion of NAFTA negotiations), and the exceptions may include friendlier nations such as Australia. However both China and Germany were singled out by the White House. This focus on giants of global trade means the risks of trade wars remain, although the holier than anticipated trade wall gave some comfort to investors. The measures are due to take effect in fifteen days, but the actual implementation and possible retaliations are unclear.

Regional futures markets favour Japan in this scenario, pointing to a one percent opening gain. More modest gains are indicated in Hong Kong and Australia. Sagging commodity prices a resurgent bonds could weigh on local investor sentiment. Volumes may remain subdued ahead of the non-farm payrolls report tonight.

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