Risk sentiment has waned slightly again, with trade conflicts continuing after new restrictions on Nvidia and a probe into the need for levies on critical minerals. Gold (XAU) is setting new all-time highs, trading at $3,292, and the Swiss franc (CHF) also rallied overnight as investors move into non-USD haven assets.
In-person trade negotiations are beginning, with Japan’s chief negotiator arriving in Washington today to start formal talks, and Italian Premier Giorgia Meloni also due to land in the capital. All eyes will be on the outcomes, as the administration has previously stated that those who come to the negotiating table sooner will receive better deals. With the continued escalation between the US and China, negotiations with other nations may include more generous concessions—especially if they pivot away from Chinese partnerships.
UK CPI came in slightly below expectations and continues its downward trajectory, now at 2.6% YoY. This is a welcome relief, given the ongoing challenges from rising household bills, which could exert upward pressure in the months ahead. GBP saw little reaction, with a 25bps rate cut already well priced in for three weeks’ time.
Later this morning, we have Eurozone CPI, and this afternoon, all eyes turn to the Bank of Canada, where a 25bps cut remains on the table. Following yesterday’s softer CPI print (2.3% YoY vs. 2.7% expected), only 10bps are currently priced in—leaving today’s decision finely balanced.
