Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
Oil prices fell to seven-week lows on Tuesday due to a weaker demand outlook, while bond, currency, and stock markets traded cautiously ahead of central bank meetings in the US and Japan.
Brent crude dropped to $79.70, with traders focusing on Chinese demand concerns. Copper, iron ore, zinc, and aluminium prices also declined, as China’s Politburo meeting did not announce new economic support measures.
“The US economy is expected to be softer this quarter and next, and the euro area isn’t compensating. China’s issues persist,” said Chris Scicluna, economist at Daiwa Capital.
The S&P 500 steadied after a two-week downturn, and futures were flat late in the Asia session. The MSCI All-World index was flat, and London’s FTSE 100 fell due to declines in basic resources stocks and a profit miss by Diageo.
Preliminary eurozone data is expected to show 0.5% annual economic growth for Q2. German 10-year Bund yields were steady at 2.355%.
'Calm Before the Storm' Interest rates are in focus. Japanese government bond yields fell, with the 10-year JGB yield down three basis points to 0.995%. US 10-year Treasury yields were steady at 4.182%.
Markets expect no US rate cut this week but foresee a 25-basis-point reduction in September. Japan’s central bank might hike rates by 10 basis points and provide details on reducing bond purchases.
The dollar and yen remained stable. The euro was at $1.08235, while the dollar/yen pair rose 0.45% to 154.72.
Microsoft and AMD will report earnings later, and preliminary CPI data for Germany and Spain is due. Australian inflation data and the Bank of England’s rate decision are also upcoming.
Key Takeaways:
- Commodities, including oil and metals, fell on demand concerns.
- Stock markets remained steady ahead of central bank meetings.
- US and Japanese central banks are key focus points for potential rate changes.
- Bond yields remained steady, and major currencies stayed within recent ranges.
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