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CNY

New Trump Tariff Threat Punches Mexican Peso and Canadian Dollar

The Canadian dollar and Mexican peso are spiralling lower this afternoon after US president Donald Trump told reporters in the Oval Office that he would follow through with imposing 25-percent tariffs on the two countries in retaliation for allowing fentanyl smuggling across their borders. According to some reports, Trump also suggested that he will make a determination on whether oil imports will be covered “this evening”. The story is still developing, and is clearly triggering stops across currency markets, but may not have staying power: we would caution market participants against overreacting, and will again reiterate our view that tariffs...

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Currencies Stabilise As Threats (Seemingly) Subside

Currency markets are steadying this morning after several central bank decisions passed without triggering undue volatility, and President Donald Trump’s nominee for Commerce Secretary suggested that tariffs might not be implemented against Canada and Mexico. In comments during a confirmation hearing yesterday, Howard Lutnick* noted the import taxes were designed to force “action from Mexico and action from Canada,” and said “As far as I know, they are acting swiftly, and if they execute it, there will be no tariff. And if they don’t, then there will be”. The US economy expanded as expected in the fourth quarter of last...

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Renewed Tariff Threats Clobber Currency Markets

The dollar is back on the offensive after Donald Trump last night said he favours implementing universal tariffs “much bigger” than 2.5 percent. Speaking to reporters aboard Air Force One, the president appeared to double down on threats against auto manufacturers in Canada and Mexico, and said the US would soon hit pharmaceuticals, chips, semiconductors, steel, copper, and a range of other categories with import taxes. An earlier report from the Financial Times suggested that newly-confirmed US Treasury Secretary Scott Bessent supports applying an initial 2.5-percent tariff against all US trading partners, with an increase in the same amount coming...

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Tech tumbles

• Equity pressure. AI news out of China weighed on US tech stocks. The 7 US megacaps have driven the overall market strength the past few years.• Spill-overs. Risk off tone in equities washed through other markets. Bond yields fell as did oil. JPY outperformed while AUD & NZD slipped back a bit.• Event radar. Locally, Q4 CPI in focus this week (Weds). Offshore, the US Fed, Bank of Canada, & ECB meet. Tech stocks also report earnings. Global Trends Some nervousness returned to markets after what had been a relatively more positive period last week. US equities kicked off...

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Dollar Retreat Gains Momentum on Tech Sector Plunge

Futures on US stock markets are tumbling this morning as outsized performance gains from China’s DeepSeek artificial intelligence start-up raise uncomfortable questions about the competitive moats surrounding America’s biggest tech firms. According to artificial intelligence experts, a thinly-resourced open-source large language model released by the Chinese company last week shows comparable performance to those built by US firms like OpenAI and Meta, suggesting that the race among Silicon Valley firms to invest tens of billions of dollars in advanced chips may not pay off—at least not for those on the vanguard. DeepSeek’s chatbot topped downloads on Apple’s App Store over...

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