The “Heated Rivalry” threat

Daily update

US President Trump’s social media accounts published an attack on Canada, threatening to block the opening of a US-Canada bridge (named after a Canadian hockey player), and suggesting a Canada-China trade deal would end the playing of ice hockey in Canada. This seems an unlikely outcome in the post-“Heated Rivalry” environment. Despite the tone of the statements, markets are likely to discount this rhetoric (tariffs on US importers of goods from Iranian trading partners, 100% tariffs on US importers of Canadian goods, and 50% tariffs on US importers of Canadian aircraft have yet to materialize).
The UK BRC January retail sales data was strong, with non-food items rising in real terms. Consumers seem to be wary of profit-led inflation, and waited to spend until the post-Christmas price discounting (though the rising value of food sales is all due to price hikes by retailers).
US December retail sales data should show the consumer defiantly spending. The roughly 0.8% GDP cost of tariffs has been met by consumers cutting monthly savings rates. That, combined with rising nominal incomes, should allow consumer spending to continue.
US import and export prices are due, but these are less of a focus now the narrative about tariff cost pass through has become clear.