Chartbook: February 27

US inflation printed below expectations for a fifth consecutive month in June as tariff-led price increases in core goods categories were offset by softness in the services sector and in automobile costs. According to data published by the Bureau of Labor Statistics this morning, the core consumer price index – with highly-volatile food and energy prices excluded – rose 2.9 percent in June...

Financial markets are beginning the week in a remarkably-calm state after the Trump administration spent the weekend escalating its trade war and stepping up its assault on Federal Reserve chair Jerome Powell. The dollar is trading on a slightly firmer footing after posting its best performance since February last week, Treasury yields are up incrementally, and equity futures are pointing to modest...

Currency markets are headed for another bruising open when trading begins in Asia tomorrow afternoon after President Donald Trump delivered another set of letters threatening to impose higher tariffs on Mexico and the European Union. In two missives posted to his social media platform, the president said taxes on imports from two of America’s most important trading partners would rise to 30 percent...

The dollar looks set to end the week on a more supportive footing after Donald Trump redoubled his efforts to revive the forgotten art of letter writing, threatening to substantially raise tariffs on Canadian goods and warning that he would soon announce increases in levies on most other countries. Ten-year yields are little changed, equity futures are setting up for a softer session, and currencies...

Update: Bloomberg is reporting that a US official has clarified that the new tariff threshold is NOT intended to apply to USMCA-compliant goods, suggesting that the impact on the Canadian economy could be far smaller than might otherwise have been the case. Our admittedly-unscientific estimates suggest that roughly 80 percent of Canadian exports to the US could ultimately meet the qualification criteria...

• Holding on. US sends out more tariff letters. Equities unfazed with S&P500 pushing higher. Bond yields dip. USD consolidated. AUD range-bound.• RBNZ steady. RBNZ on hold. But underlying tone & outlook still points to a bit more easing over coming months. This should act as a NZD handbrake.• AUD trends. AUD hovering near top end of its multi-month range. We think the risks of a USD rebound...

Currency markets remain firmly rangebound even after President Donald Trump warned “no extensions will be granted” to his August 1 tariff date, threatened to raise levies on copper and pharmaceutical imports to 50 percent and 200 percent, respectively, and said at least seven additional countries would receive updated trade letters this morning, with the European Union getting one in two days. Stock...

The dollar is losing altitude once again after Donald Trump reignited trade tensions with a fresh round of tariff threats, unsettling global markets and complicating the outlook for monetary policy. Trump sent letters to 14 countries last night—including close allies and key trading partners Japan and South Korea—threatening them with the reimposition of tariffs from August 1, and more are expected...

The dollar is holding near a three-year low and measures of risk appetite are pointing to subdued trading action after the Trump administration seemingly extended its tariff deadline to August 1—reducing fears of a violent selloff around Wednesday’s original drop-dead date. Measures of trade policy uncertainty* have fallen sharply from their heights. At an event dubbed “Liberation Day” in early April,...

• Upbeat tone. US equities, bond yields, & the USD edged up overnight. EUR eased back, as did NZD & AUD, though they remain at high levels.• US data. US jobs report a bit better than expected. But topline result masks some pockets of weakness under the hood. Private payrolls were soft.• Event radar. US on holiday tonight. Next week RBA & RBNZ meet. RBA expected to cut rates. US’ ‘pause’...