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Markets Stabilise Even As Economic Pessimism Grows

Markets are finding a firmer footing this morning after intensifying worries about the US economy’s trajectory weakened the dollar and drove yields and equity bourses lower in yesterday’s session. Today’s data calendar looks relatively quiet, but this afternoon’s Nvidia’s earnings release could move markets, and political developments will continue to occupy centre stage. A widely-watched measure of consumer confidence dropped at the fastest monthly rate since August 2021 earlier this month, suggesting that uncertainty about the Trump administration’s policies is contributing to a rising sense of alarm among Americans. Data released yesterday morning showed the Conference Board’s confidence index sliding...

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New Tariff Threats Add to Unease

The US dollar is up only slightly against its peers this morning after Donald Trump said tariffs on Canada and Mexico are “going forward on time, on schedule”. Speaking with reporters after yesterday afternoon’s meeting with French president Emmanuel Macron, Trump claimed the United States had been “led, in some cases, by fools,” saying “I look at some of these [trade] agreements, I’d read them at night and I’d say, ’Who would ever sign a thing like this?’ So the tariffs will go forward, yes, and we’re going to make up a lot of territory… Our country will be extremely...

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Dollar Retreats as ‘Tariff Exhaustion’ Kicks In, and Retail Sales Slump

The dollar is trading near a two-month low this morning after Donald Trump delivered a long-threatened “reciprocal” tariff plan that was distinctly short on tradeable detail. In an extensively-teased announcement from the Oval Office, the president signed a memo directing federal agencies to investigate raising import taxes on shipments from countries with “unfair” economic barriers in place against US exports—things like tariffs, regulations, subsidies, manipulated exchange rates, and domestic value-added taxes—but stopped short of imposing any deadlines or naming the product categories and countries that could be targeted. “On trade, I have decided, for purposes of fairness, that I will...

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Markets Look Through Renewed Tariff Threats

The dollar is up modestly against its major rivals after Donald Trump verbally threatened to increase tariffs for the third weekend in a row. In a press briefing conducted on Air Force One ahead of yesterday’s Super Bowl, the president told reporters that he would unveil new reciprocal tariffs—levies designed to match foreign protectionist measures—in the coming days, and will impose 25 percent tariffs on steel and aluminum products from all US trading partners today. Reciprocal tariffs—which are designed to match protectionist measures in other countries—are generally well supported on both sides of the aisle, and are not terribly impactful...

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Markets Stabilise as Policy Risks Recede

Financial markets are overcoming post-traumatic stress syndrome three days after Donald Trump started—and then temporarily paused—a potentially-catastrophic trade war with Canada and Mexico. Benchmark ten-year Treasury yields are inching lower and major equity bourses are headed for a stronger open after Treasury Secretary Scott Bessent called tariffs a “means to an end,” and said the new administration is focused on bringing down interest rates. The dollar is holding firm against its rivals. The number of Americans submitting initial applications for unemployment benefits rose incrementally to 219,000 in the week ended February 1, and continuing claims fell slightly in the prior...

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