Wall Street’s Tariff Tango: The UK’s Big Reveal Looms
Where We Stand – Another Day, Another Tariff Story
yesterday’s market rode the wave of a fresh batch of tariff news, and the contour of the U.S. economic outlook remained as murky as a foggy London tea house. We’re in the middle of a “two‑step tariff regime” rehearsal – the Trump Administration dreams of a slick legal rigour that will let them slap tariffs on demand while dragging in the full weight of Section 301 investigations the following month.
- Emergency powers could put a tariff on the table instantly.
- Section 301 opens the gates for longer‑lasting levies.
- Businesses can’t plan more than a day ahead – not a great day for rock‑star entrepreneurs.
All of that comes with a good dose of uncertainty, probably the biggest gremlin in the market’s wish list. “Liberation Day” might just mean the start of the real drama, not the final act. In the meantime, equities survived another day of tulgey rabbit‑holes: a third straight win for the S&P, and a calm that was as fragile as a soufflé left out of the oven.
We’re left staring at the soft data that is quietly rattling the dollar – the trade of “new home sales,” “Richmond Fed manufacturing,” and “Conference Board confidence.” All missed whispers have pushed the DXY up to 104, the euro to 1.08, and the pound to about 1.29, but the FX space still feels like it’s stuck in a pothole that refuses to straighten out. The Treasury curve will probably keep dancing between … 20 bp swings, unless something new drops a seed of certainty.
LOOK AHEAD – UK Spotlight
Give the UK a spotlight for a day, and the market’s attention is a whole lot brighter. The morning’s CPI rolls out with headline inflation holding steady at 3.0% YoY but with core inflation at 3.6% and services at 4.9%. Even without PPI this time, the Bank of England should stay on the same path – but America’s next data slam will probably do much better.
The real drama is set for the mid‑day Spring Statement. Chancellor Reeves is expected to hawk £15 bn of spending cuts – a purge as bland as a jab of tofu. Those cuts are targeted at the benefits bill and the irrelevant government departments (those that aren’t defence or health). Treasury’s 2024 remit will be around £310 bn and the issuing of new gilts will keep front‑loaded.
- Reeves will share stale forecasts if their market credibility is as thin as stale bread.
- Short Gilts and short Reeves’ future in the cabinet are the trades that feel most attractive.
- Will the number of gill‑responses be a sign that the UK is burning its fiscal torch for the last time? Time will tell.
Elsewhere today – the U.S. durable goods orders report is due in the afternoon while a few FOMC and ECB policymakers will be giving their pearls of wisdom.
Stay Informed – Real‑time Updates
Upgrade your asset‑watching experience with a subscription that syncs directly to your device. We’re ready to drop the next wave of updates whenever your screen needs them.
