📆 Tuesday, November 26
► European markets are bracing for declines as investor sentiment deteriorates due to heightened trade tensions. Futures for the Stoxx Europe 600 signaled a weak start, dropping over 0.6%, mirroring concerns from Trump’s proposed tariffs. The EUR slid against the re-strengthening USD, which surged 0.7% earlier before paring gains. Markets await vital inflation data from the Eurozone and Germany later this week.
► US markets turned cautious after Monday’s rally, with futures showing mixed performance. S&P 500 & Nasdaq 100 futures slipped slightly, down around 0.1%. The announcement of 10% tariffs on Chinese imports and 25% tariffs on Mexican and Canadian goods dampened optimism spurred by Trump’s Treasury pick, Scott Bessent, whose appointment had bolstered confidence in market-friendly fiscal policies. The Canadian dollar and Mexican peso fell over 1%, hitting multi-year lows, as markets priced in the impact of aggressive U.S. trade policies. Investors are now shifting their focus to the PCE inflation figures (Wednesday) and the FOMC meeting minutes (later in the day at 19:00 UTC+0; more important than usual today, according to SmartTrader chief analyst Robert Lindner), which are expected to provide insight into the Federal Reserve's monetary policy direction in light of the uncertainty surrounding Trump's fiscal policy. Economists warn that these tariffs could further strain cross-border supply chains, amplifying existing economic vulnerabilities. Tariffs would also increase costs resulting in an acceleration of inflation. The DXY trades flat again after earlier gains of the USD. US Treasury yields are slightly up (4 bps for US-10y).
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