Equities rally on thin ice as trade negotiations take over the headlines

Show notes

The week started on a slow but hopeful note for European markets, with expectations that Trump’s latest 50% tariff threat on European imports would accelerate negotiations but that market optimism fascinates me. European markets are flirting with ATH levels, US futures were also up yesterday—but the reality is that with every piece of incoming information, the collective welfare deteriorates. Still, moving forward, fresh deals between the US and major trade partners could further boost market sentiment and send indices on both sides of the Atlantic to fresh ATH levels—but whether that optimism lasts is yet to be seen. The economic data—especially the inflation metrics—will be crucial.
The US dollar is better bid this morning, but remains under pressure from trade tensions and the worsening perception of the US’s ballooning debt. The debt issues are also making the headlines in Japan. The 30- and 40-year JGB yields have recently spiked to the highest levels on record, and the 10-year yield hit the highest since 2009.
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