First up, the biggest news for morning today is the news coming in on, of course, tariff. There is finally some news that has come out, with Japan they have struck a deal. It is the way the market is reacting especially the Nikkei has jumped up. It seems like investors had gotten way too pessimistic and the fact that this deal has come out it is a win-win for us because they are getting an investment of $550 billion, they will get 90% of the profits and from what we hear Trump is really expecting planned investments from players like SoftBank, OpenAI, Oracle, and so it is a win-win for us but what does it mean for Japan and also the other emerging markets for the deals to come?
Steve Englander: Well, in the short term it removes some of the risk premium that was weighing on Japanese asset markets. So, we have seen the Nikkei take a big jump and even Japanese bond yields have gone up, in this case not because of inflation or activity concerns, but kind of dragged up by equities. So, I think that the markets seem to be relieved that the worst has not hit. It also seems that the auto sector got itself like 15% tariffs which is a bit better than many were expecting. I would say that some of the other stuff is a little bit soft. I mean, promises to invest direct investment, sometimes they come to fruition, sometimes they do not. They always take a while. But I think that is going to set a pattern for other major economies to try and bargain down some of the reciprocal tariffs in return for direct investment and that seems to be acceptable to the US.
But any particular segments where you feel the impact is going to be felt more than the others?
Steve Englander: Well, in Japan there is always a focus on autos and steel and there are some headlines that suggest that steel and aluminium are not going to get the break that autos are. So, we will have to see if those headlines are true or not. There is also discussion of opening up of Japanese auto and some agricultural markets. We will have to see how much of that actually occurs as well. But I would say that one implication is that it puts pressure on other countries, Japan’s competitors for US markets to come to similar deals with the US because now that Japan is kind of in the clear, they do not want to run the risk that they get hit with harsher tariffs if no deals arrive.