The Federal Reserve has detected rising concern among US business about the potentially harmful impact of tariffs as growing trade tensions prompt some executives to freeze investment plans.

According to minutes of the Fed’s June meeting, some businesses indicated they had already “scaled back or postponed” plans for capital spending due to “uncertainty over trade policy”, while a larger group voiced concern about the impact of trade restrictions on future investment.

The minutes were released on Thursday, a day before the US is due to start imposing tariffs on $34bn of imports from China on Friday, with Beijing set to target an equal amount as a nascent trade war between the world’s two largest economies takes centre stage.

But on Wall Street the S&P 500 index finished the day up 0.9 per cent as sentiment was lifted by signs that President Donald Trump might abandon tariffs on the European carmaking sector in exchange for concessions.

In Asia-Pacific equities, futures tip Sydney’s S&P/ASX 200 to gain 0.5 per cent at the open, while Tokyo’s Topix is set to rise 0.8 per cent and Hong Kong’s Hang Seng is expected to gain 0.1 per cent when trading begins.

Corporate earnings reports out today include Samsung Electronics and LG Electronics.

The economic calendar for Friday has a subtle theme to it (all times Hong Kong):

  • 07.30: Japan household spending
  • 07.50: Japan foreign exchange reserves
  • 08.00: Japan overtime pay
  • 12.00: US tariffs on imports from China take effect
  • 14.30: Australia forex reserves
  • 15.00: Malaysia forex reserves
  • 15.30: Thailand forex reserves
  • 16.30: Hong Kong forex reserves
  • 19.30: India forex reserves
  • Forex reserves data for Indonesia and the Philippines are also slated for release today.
The Financial Times Limited 2018. All rights reserved.

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