Stocks Cheer Trump Tariff U-Turn
Trump Scraps EU Tariff Threat
Risk assets are rallying today in response to a shift in tone from Trump over Greenland. The US President yesterday scrapped upcoming tariffs on eight European countries which were due to come into effect on Feb 1st, saying that last minute talks had established the framework of a future deal on Greenland. Details of this framework remain unclear at the moment with Trump initially signalling that the deal would allow for the US to take control of Greenland. However, NATO has said that no change in sovereignty was discussed. For now, traders are awaiting further details but price action today reflects relief that a trade war has been avoided.
US Data on Watch
Looking ahead, stocks should continue to recover while tensions remain eased. Unless we see a breakdown in talks and fresh threats from Trump, risk sentiment should help keep equities underpinned while focus turns back towards typical macro drivers of US data and Fed expectations. With that in mind, traders will today be watching weekly jobless claims, final quarterly GDP and monthly core PCE. Any softer data should help drive stocks higher, feeding into dovish Fed expectations near-term. Current pricing for a March rate cut is less than 20% showing plenty of room for a dovish repricing if we get any downside data surprises ahead of that March meeting.
Technical Views
S&P
The sell off in the index found fresh support into a test of the 6,813.75 level with price now bounding back up and testing the 6,949.75 level. With momentum studies turning higher again, focus is on a fresh push higher and a breakout to new highs in coming sessions.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.