All customs, always
Look at the upcoming days in Wayne Cole’s European and global markets.
President Trump announced a 25% tariff on aluminum imports into the United States using media scrum in Air Force 1, and promised more mutual tariffs on Tuesday or Wednesday.
At the same time, new Chinese retaliatory tariffs on the US will be implemented, and German Prime Minister Scholz said the EU is ready to respond to taxes “within an hour.”
Investors slipped the usual suspects early in the Australian dollar and euro, but then reduced their losses. Wall Street futures also started low, but didn’t stay long. It’s currently up about 0.3%. The future of Europe is also holding its nerves for now.
Maybe tariffs are losing shocking value, and the market suspects it’s all a negotiating bluff, and Trump will quickly turn the course back. Some analysts have argued that Trump is extremely sensitive to what he does on Wall Street and is another version of the Fed if the market is truly a tank.
Again, the market must tank first, and the current stability of the inventory will certainly make him even more audacious.
Trump also made comments on the Treasury Department market, frankly confusing. It has sounded some alarm bells, as Trump had in the past.
Such a move would be a global financial disaster, so analysts assume he would never do it. However, only a few hints on suggesting such risks can cause mayhem.
When he testifies before Congress on Tuesday and Wednesday, there is no doubt that all these questions will be set to feed Chairman Powell. He must do his best diplomatically to answer without involving the White House.
Wednesday’s appearance also occurs shortly after the release of consumer pricing data in January, allowing for real-time responses from the Fed itself.
As an aside, Gold hit another all-time high, aided by speculation that Trump could slap tariffs on metals. This is a strange move considering what John Maynard Keynes once called a “wild relic” but is popular among conservative US commentators.
Tax talk was shipped to the US ahead of new taxes in a hurry of physical metals in London, Switzerland and Asia. Apparently the demand was very high. The Bank of England could not maintain due to an outdated way to release bullion stores. It gives “Liquid Gold” a whole new meaning.