It’s a Barbie world

Daily update

The manufacturer of Barbie dolls has warned that higher prices are coming to US consumers, as a direct consequence of tariffs. Moving production to the US does not seem to be an option. Rationing dolls to two per child while raising prices has limited consequences, but US President Trump has signaled medicines will be next. Rationing medicines with higher prices may have more significant consequences (raising health insurance prices, for instance).
US March trade data is due. In the past, this was almost ignored by markets, but politics has elevated the status of trade. Being March data, this reflects the before times, and will probably show a sizeable deficit as companies and consumers rushed to buy before tariffs forced them to hand over sizeable amounts of money to the US government.
European business sentiment polls are due. They are unlikely to add much useful information. The comments in yesterday’s US service sector sentiment polls showed considerable business angst about policy uncertainty (both from trade taxes and from disrupted government services).
Eurozone March producer price data will not reflect Trump’s non-US disinflation effect yet. It is enough that investors know this is likely to happen, however, and expectations for additional ECB easing are established.