May’s desperate attempt rebuffed, eyes on Draghi speech & Fed mins: Your Wednesday briefing

British PM May said she will include in her Withdrawal Agreement a requirement for MPs to vote on whether to hold another Brexit referendum.

Rejected

By offering this possibility and a compromise on customs arrangements, May hopes to win over opposition Labour lawmakers. But Labour leader Corbyn said Party will not support it describing May’s new offer as “largely a rehash of the government’s position“ in talks with the opposition that broke down last week.

Scottish First Minister Nicola Sturgeon too gave a quick reaction by denying May support as she said Scotland voted against Brexit and accepting the deal meant Brexit and not a second referendum.

Fed minutes

Markets worldwide are awating US Federal Reserve’s last FOMC meeting minutes later today.

Boston Fed President Rosengren said he is not as worried as some of his colleagues about inflation currently being below the Fed’s target. He said there is “no clarion call” to push interest rates either way.

St. Louis Fed President Bullart said, further weakness in inflation could prompt the US Fed to cut interest rates. “A downward policy rate adjustment even with relatively good real economic performance may help maintain the credibility of the FOMC’s inflation target going forward.”

ECB’s Draghi

On the other side of the Atlantic, and earlier the day, European Central Bank President Mario Draghi will appear in front of cameras to deliver a speech.

Lighthizer in Paris

USTR Lighthizer will meet with officials from the EU and Japan in Paris on Thursday on the sidelines of the ministerial meeting of the 36-member OECD in Paris on Wednesday and Thursday. They will discuss the non-market-oriented policies and practices of other countries, focusing on China’s subsidies. The meetings come ahead of Trump’s weekend trip to Tokyo where he will sit down with PM Shinzo Abe.

Japanese data and BoJ commentary

BOJ board member Harada called policymakers on Wednesday to ramp up stimulus “without delay” if a slowdown in the economy still prevents achieving its price target. Harada added the planned sales tax hike in October could weigh on inflation by reducing consumption and increasing the risk of recession.

Data showed Japan’s core machinery orders rose 3.8 percent in March from the previous month, beating the estimate of a 0.7 percent decline. Japan’s exports fell 2.4 percent in April from a year earlier, down for a fifth straight month. The data also showed Japan’s trade surplus with the US rose 17.7 percent in April from a year earlier, partly due to an 8.3 percent increase in auto exports.

OECD growth forecast

The OECD reported economic growth in China and the US could be 0.2–0.3 percent lower on average by 2021 and 2022 if the two economies do not ease on tit-for-tat tariffs. The global economy would grow by only 3.2 percent this year, the slowest since 2016, as growth in trade flows is nearly halved this year. Next year global growth would be slightly better at 3.4 percent if both nations pull back from tariffs.

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