A look at the coming day in European and global markets by Kevin Buckland
And so it begins.
Trump took to his Truth Social platform on Monday night to threaten 25% tariffs on Mexico and Canada if they don’t better control their borders, and additional tariffs on China.
Asian investors, still sipping their morning coffees, suddenly rushed to hit the sell button, sending the Mexican peso down more than 2% against the dollar at one point and Japan’s Nikkei down nearly 2%. %. Automakers were the big losers. Toyota fell about 3% and Nissan almost 5%.
Most markets regained some composure by midday in Asia, but pan-European STOXX 50 futures are still pointing down around 1%, and traders fear Europe will soon be in Trump’s crosshairs.
The episode evokes uncomfortable memories for markets that have become accustomed to reacting to scheduled events such as the Fed’s policy announcements and monthly payroll reports during Joe Biden’s tenure as president. Now, investors should prepare for market-moving releases from Trump at any moment, just like during his first term.
One analyst joked that it was time to consider downloading Trump’s Truth Social app, since X, formerly known as Twitter, is no longer the incoming president’s preferred platform.
But during Trump’s first term, social media posts and reality have not always coincided. There is still a long way to go before Trump is sworn in again in January, meaning sentiment toward Mexico, Canada and other tariff targets could change.
Ultimately, Trump has said many times that all he seeks is to reach agreements.
There is little on the calendar in Europe to distract from Trump’s office, save for a few central bank spokesmen across the region.
The Bank of England’s chief economist, Huw Pill, is due in the House of Lords to answer questions about Britain’s economic health, or lack thereof.
Elizabeth McCaul, member of the board of directors of the ECB, speaks in Frankfurt and her counterpart Mario Centeno presents the financial stability report of the Bank of Portugal.
Riksbank Deputy Governor Anna Seim takes part in a seminar in Stockholm and Bank of Finland Governor Olli Rehn answers questions in parliament.
Later that day, the Federal Reserve releases minutes from its early November meeting, when it cut rates by a quarter-point, following the first huge half-point cut of the current easing campaign in September.
Key developments that could influence markets on Tuesday:
– The BoE pill in the upper house
– ECB’s McCaul and Centeno speak at separate events
– This is Seim from the Riksbank
– Rehn of the Bank of Finland in parliament