Macro Weekly – From Trade War to Trade Talks?

The EU and Japan look set to start trade talks with the US, following on the heels of the negotiatons between the US and China.Although encouraging, the threat of an escalation of protectionist measures remains, as the proposed US tariffs on the EU show.While there is also a looming risk of US tariffs on cars, which would hit the EU and Japan hard, while also having wider effects on confidence.Signs of a bottom in global cycle rather mixed, though conditions for modest improvement in future are coming into place.Financial conditions have eased in the US and Asia and the ECB this week signalled its readiness and ability to provide additional stimulus.