Trump breaks rate calm with new salvo

By Jamie McGEEVER Orlando, Florida, – – Handaging makes sense of the forces that float world markets through Jamie McGEVER, the columnist of the market, just when it appears that some calm has established the global markets, despite a worrying rise in many countries’ long -term returns, US President Donald Trump has given a serious reminder of his trade. In the threat of 50% tariffs on European goods filed on June 1, forcing a 25% charge on Apple iPhones in the US, Trump shook investors from any complacency that could bring about the recent unbundling. European and US stocks have fallen – the S&P 500 has sealed its steepest weekly fall since March – to ensure it will be a nervous and anxious long weekend for investors. US and British markets were closed for holidays on Monday. The optimistic view is that it is a well -known negotiating tactic – comes from all guns that burn, chaos, create safe concessions, refugees, and then demand the victory, because the agreement entered into is nowhere as bad as the original scenario in the worst case. Analysts at Citi are a confident tariff fear contained, and that a 50% charge on Europe will not last long, even if implemented. The disadvantage for risky assets is ‘manageable’. This could be the path that follows us-Europa conversations, as is the case with the US-China negotiations. But large doses of uncertainty and risk have been injected into markets, and investors need price assets accordingly. Barclays economists estimate that if 50% tariffs were realized on EU goods, the total trade-weighted tariff rate on all US imports would rise to 21% from 14%, and an extra 0.5 percentage point hit to GDP growth would put the US economy at the tip of the recession. The other main focus for investors this week was sovereign effects, specifically longer expiry dates, in many G7 countries, including the US, Japan and Britain. Poor auctions, debt and shortage concerns, and fear of policy paralysis has driven long -term returns to perennial or record heights. Moody stripped the US from its Triple-A credit rating a week ago. Concerns offered no support to the dollar and eventually began to weigh on Wall Street. Indeed, the slump in US stocks immediately after Wednesday’s 20-year note auction was the third worst market response to a mortgage auction ever, according to Kevin Gordon at Charles Schwab. The US and UK vacation on Monday and monthly ends will probably always distort the markets next week. A re -record of global trading tension and historically high effects is now in the mix. I would love to hear from you, so reach out to comment. You can also follow me at @reudersjamie and @reutersjamie.bsky.social. This week’s most important market movements * Wall Street’s most important indices end the week, with the S&P 500 2.6% for its worst week since the end of March. * Apple shares’ fall Friday expands their weekly decline to 7.5%. They have dropped eight straight days, their worst run since January 2022. * European stocks are rising for a sixth consecutive week, but just. Germany’s DAX scored a record high above 24000 points and is 30% higher than April 7 low. * The dollar index drops almost 2%, its first weekly loss in five. * Japan’s 30-year-old bond yield rises 10 BPS to a record height of 3.20%during the week. US and British equivalents also hit historical highlights of 5.16% and 5.60% respectively. Graph of the week The dollar’s slide is striking. I wrote this week that there are many valid reasons in the long run to be clumsy about the dollar-physical misery, policy credibility, end of “US exceptionalness”, de-dollarization, to name a few-the rate of sale was unsustainable and a short-term reversal probably seemed. The dollar’s sloping is down on Friday after Trump’s latest tariff salvo’s that put any correction on ice. But it is still on the maps, if the exposition of the dollar’s correlation with yield distribution is any guide. The link of the dollar to the yields of the SU Euro zone is usually very strict -as the dollar’s yield benefit increases, the currency rises; If it shrinks, the dollar weakens. But that correlation collapsed all around … Liberation Day. The link is broken, but history indicates that it will not be long. Here are some of the best things I read this week: 1. Why is the Federal Reserve Independent, and what does it mean in practice? – Brookings 2. Fed Framework Review must address communication problems – OMFIF 3. Rates as cost -shok shocks: implications for optimal monetary policy – NBER 4. QUESTION TO OPERATION: What is more important for inflation? – San Francisco Fed 5. FareWell, America – Carl Bildt What can the markets move on Tuesday? * South Korea Consumer sentiment * Hong Kong Trade * Bank of Japan Governor Kazuo Ueda Speaks * Germany GFK Consumer sentiment * US 2-year Treasury Note * US durable goods * US Consumer confidence * Minneapolis Fed President Neel Kashkari Talking opinions are opinions expressed. It does not reflect the views of Reuters News, which are linked to integrity, independence and freedom of prejudice under the trust principles. The trading day is also sent by e -mail every weekday morning. Do you think your friend or colleague should know about us? Send this newsletter to them. They can also report here. This article was generated from an automated news agency feed without edits to text.