Daily update
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.