Market Commentary: Monday 10th February

The U.S.-China tariff war continued overnight, with China imposing retaliatory tariffs on $14 billion of U.S. goods. This follows an antitrust probe into Google on Friday; their search engine remains blocked in China. It was hoped that the playbook used for Canada and Mexico would apply here, but apparently not. Donald Trump plans to unveil 25% steel and aluminum tariffs, according to a pre-Super Bowl interview.

So, what action do we have in store for the week ahead? On Tuesday and Wednesday, Fed Chair Jay Powell delivers his semi-annual testimony, where he is likely to stress a no-rush approach to future policy changes, particularly given the uncertainty surrounding new Trump policies. This leads neatly into the U.S. CPI data on Wednesday, which is expected to rise +0.3% M/M, up from the +0.2% M/M reported in December. On Friday, we have U.S. retail sales data, where the belief is that changes in consumer sentiment do not always translate into action. However, today is very quiet, with ECB President Christine Lagarde’s testimony to the European Parliament being the highlight.

Market-wise: Bitcoin rose 2% to $97,126.12, Ether rose 3.2% to $2,634.35, the yield on 10-year Treasuries declined one basis point to 4.48%, spot gold rose 0.8% to $2,884.89 an ounce, West Texas Intermediate crude rose 0.6% to $71.44 a barrel, and the British pound opens at 1.2410.

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