A look at the day ahead in European and global markets from Kevin Buckland
And so it begins.
Trump took to his Truth Social platform late Monday to threaten 25% tariffs on Mexico and Canada if they don’t better control their borders, and additional tariffs on China.
Suddenly, Asian investors, still sipping their morning coffee, were racing to hit the sell button, sending the Mexican peso down more than 2% against the dollar at one point, and Japan’s Nikkei index down nearly 2%. Automakers were notable losers. Toyota shares fell by nearly 3% and Nissan shares fell by about 5%.
Most markets had regained some calm by midday in Asia, but European STOXX 50 futures were still pointing to a decline of around 1%, with traders worried that Europe would soon be in Trump’s crosshairs.
The episode brings up uncomfortable memories for markets accustomed to reacting to scheduled events such as Federal Reserve policy announcements and monthly payroll reports during Joe Biden’s term as president. Now, investors should prepare for Trump’s market-moving posts at any hour, as was the case during his first term.
One analyst quipped that it’s time to consider downloading Trump’s Truth Social app since X, formerly known as Twitter, is no longer the incoming president’s platform of choice.
But as Trump’s first term wore on, social media posts and reality didn’t always match up. There’s still a long way to go before Trump is sworn in again in January, which means sentiment toward Mexico, Canada and other tariff targets could change.
Ultimately, Trump has said multiple times, all he cares about is making deals.
There’s not much on the European calendar to distract from Trump’s post, other than some central bank talk from around the region.
The Bank of England’s chief economist, Hugh Bell, is scheduled to appear in the House of Lords to answer questions about the health or otherwise of the British economy.
ECB Governing Council member Elizabeth McColl speaks in Frankfurt and her counterpart Mario Centeno presents the Bank of Portugal’s financial stability report.
Riksbank Deputy Governor Anna Sim joins a seminar in Stockholm and Bank of Finland Governor Olli Rehn answers questions in Parliament.
Later today, the Fed will release minutes from its early November meeting when it cut interest rates by a quarter point, following the first significant half-point cut in the current easing campaign in September.
Key developments that may impact markets on Tuesday:
– Bank of England decision in the Senate
– The European Central Bank’s McCaul and Centeno speak on two separate occasions
– Sim from the Riksbank speaks
– Rennes Bank of Finland in Parliament
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