Today marks a turning point in Donald Trump’s tariff policy. It is the day the tariff threat will materialize – unless there is a surprise U-turn – and hammer hopes that the aggressive tariff threats were not just a negotiation tactic. US stocks are sold on expectation that higher tariffs will boost inflation, prevent the Federal Reserve (Fed) from giving the necessary support and slow growth.
The European stocks on the other hand are in demand – appetite for defense stocks increasing by the day. It’s crucial to note that market sentiment is now influenced less by the central bank policies and the level of yields, and more by growth expectations. And the latter supports the European equities vs US peers, and the euro vs the US dollar. In energy, crude oil fell 2% below the $70pb psychological mark – not necessarily on trade fears – but on news that...
