Market resilience challenged by Trump weekend tariffs salvo

(Bloomberg) – Financial markets showing an increase in insensitive to tariff threats from the US face tests at the opening Monday after President Donald Trump declared the 30% rate for the European Union and Mexico on August 1.

Most of them read from Bloomberg

Trump has formulated trade measures, pledged to bring in Brazil, Algeria and more tariffs from Canada to everyone, and has invited trading partners to negotiate more. JPMorgan Chase & Co. Despite warnings of self-complaintness from CEO Jamie Dimon, investors have so far acted as if they were relying on his previous U-turn from his administration to bring the US president back.

“Investors should not take Trump’s banks with a 30% tariff threat on EU goods,” wrote Brian Jacobsen, chief economist at Annex Wealth Management, in an email. “That level of tariffs are punitive, but it’s probably more likely to hurt them than the US, so the clock is ticking.”

Bitcoin (BTC-USD), traded throughout the weekend, bringing the new record high, a high of $119,489 in early trading on Monday.

The currency market suggested that risk appetite was beginning to fade in early trading, as the dollar and Japanese yen were framed higher for more than 10 peers while Australian dollars and euros were led. The euro touched on the strongest level against the dollar since 2021 this month as investors assessed the region’s relative growth outlook. Meanwhile, the Mexican peso set a year-high of 18.5525 against the July 9 dollar.

Criticism of President Trump and his allies Jerome Powell dealing with expensive renovations to the Fed headquarters can be weighed in the market earlier in the week as some administration officials are filing lawsuits to remove Powell from the Fed’s board.

George Saravelos, AG strategist at Deutsche Bank, said Powell’s potential layoff is a major, low-cost risk that could cause a sale in the US dollar and the Treasury Department.

“If Trump forces Powell, we’ll see a drop of at least 3% to 4% in trade-weighted dollars and a sale of bonds of 30-40 points in the next 24 hours.

Greenbacks and bonds will carry a “sustainable” risk premium, he said in the memo, adding that investors may also be worried about the potential politicization of the Fed’s exchange line with other central banks.