Daily update
Daily update
- Investors and the US administration are likely to keep focus on the US Treasury bond market, which weakened modestly in the wake of US President Trump’s latest tariff threats. The implications of additional tariffs are more US inflation pressures and a further erosion of the USD’s status as a reserve currency. So far, bond investors do not seem to be taking the threats too seriously. Trump also threatened to tax US drinkers of champagne and Bordeaux, if French President Macron refuses to join the Board of Peace for Gaza. Markets seem inclined to dismiss this too.
- The UK November/December labor market data showed relative firmness, with stable unemployment rates, high employment rates, and slightly above expected pay gains. Revisions were also biased toward a more positive picture.
- German producer prices remained in deflation in December, as expected. Ahead, there is the release of the ZEW business sentiment poll, which tends to get disproportionate attention from information-starved headline writers.
- France is to pass its budget using a constitutional device (Article 49.3), which basically declared the budget agreed unless the government loses a vote of confidence. The budget itself is not voted on in the National Assembly. A move like this was expected by investors.