Daily Brief – US Trade War Tariffs

US Trade War Tariffs

With all markets awaiting what emanates from POTUS later today, Trump has certainly achieved one aim: getting the world’s collective attention. Increasingly desperate TV pundits have spent the past hours dragging past Trade Negotiators into the studio in an effort to get them to predict what the tariffs will look like. This has been a fruitless exercise since trade negotiators both past and present are hardwired to give nothing away plus of course they literally have no idea, so they have nothing to give away. For a change, instead of lurking in the cabin doorway of Airforce One, POTUS will pronounce on the scale and timing of those tariffs from the Rose Garden of the White House this afternoon.

GBP/USD 1.2891.

EU

The good news of EU Consumer Price Inflation coming in at 2.2%, just under the expected 2.3% yesterday, needs to be viewed in the context of EU Services Inflation at 3.4% in 2024 which is carefully watched by the European Central Bank since it includes both consumer demand and more importantly wages inflation.  On top of that, today’s US tariff cliff is overshadowing the market. Those tariffs are estimated to knock off 1.4% from EU growth which is currently predicted to run at 1.3% in 2025 up from 0.7% in 2024. Hence the fear that the EU is headed for recession. And that despite that Services Inflation measure is why the ECB may well cut EU interest rates on April 17.

EUR/USD 1.0792.

Elon Musk

In an effort to better understand the thinking of the unelected but definitely (well) appointed US Efficiency Czar, I have embarked on reading Walter Isaacson’s book, Elon Musk.  The 2023, 688 page authorised biography is not for the faint hearted but not wishing to spoil it for you the book says much about how and why EM is as he appears this side of the Atlantic. No fear, addicted to risk, driven to extremes and without being encumbered by any filter when dealing with people are just some of the epithets which immediately spring to mind. Plus of course EM’s outright refusal to accept conventional wisdom let alone the word no.

EUR/JPY 161.26.

April 1

Out of the chocks yesterday morning were some decent pranks from top name brands: Heinz announced Dubai Beanz with a pistachio flavour; Brewdog announced Hot Beer as a change from cold beer; Terry’s came back with Chocolate Mint Toothpaste; Cadbury’s offered sachets of goo with the goo from the Crème Egg but without the chocolate. Even Love Island got in on the fun announcing that for their next series Majorca would be swapped for Essex’s Canvey Island. Only another 364 days…..

GBP/EUR 1.1944.

Swift Billionaire

Just one year ago on this day in 2024 Taylor Swift achieved billionaire status – the first musician to do so purely on album sales and performances. The notable other billionaire singer is of course Double B Billionaire Barbadian, Rihanna but that was mainly due to her Fenty beauty line. This song from 2012 is hailed as Taylor Swift’s best song ever: All Too well

I walked through the door with you
The air was cold
But something about it felt like home somehow
And I, left my scarf there at your sister’s house
And you’ve still got it in your drawer even now

Oh, your sweet disposition
And my wide-eyed gaze
We’re singing in the car, getting lost upstate
Autumn leaves falling down like pieces into place
And I can picture it after all these days

And I know it’s long gone and that magic’s not here no more
And I might be okay but I’m not fine at all

‘Cause there we are again on that little town street
You almost ran the red ’cause you were lookin’ over at me
Wind in my hair, I was there
I remember it all too well

Photo album on the counter
Your cheeks were turning red

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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