Daily update
Daily update
- US trade policy uncertainty increased over the weekend. The Supreme Court ruling against IEEPA tariffs was not unexpected. US President Trump imposing a 10% universal tariff, then raising it to 15%, was less predictable. Details seem limited—will some goods be exempt? What about the revised NAFTA deal and imports from Mexico and Canada? What about trade deals involving lower tariffs (albeit not necessarily fully implemented) with countries like the UK? Administration officials are suggesting further tariffs against specific countries.
- Tariff rebates will increase the US fiscal deficit, and act as a fiscal stimulus. Any rebates will be paid to US importers (as they are the ones who made payments to the US Treasury). With new tariffs coming in, it seems unlikely anyone will rush to lower prices to their customers.
- German and US business sentiment data is due. German sentiment tends to bias toward pessimism (relative to reality). Spin rather than substance seems to dominate. The Dallas Fed manufacturing sentiment survey offers partisan bias, but the comments section may also hint at whether companies were coming to terms with policy uncertainty—before the latest wave of policy uncertainty.
- US December factory orders are not a major market focus. Surging chip sales boosted early South Korean export figures, offsetting weaker auto sales.