In case you missed it, we had a WSJ report overnight saying the Trump was weighing broader and higher tariffs with hikes potentially as high as 20%.
This weighed on an already negative sentiment that was triggered by last Friday’s final University of Michigan consumer sentiment survey where the data showed an even worse picture with long term inflation expectations being revised even higher.
It’s all about the US reciprocal tariffs plan now. We have a couple of important US data tomorrow but the focus remains on the tariffs plan as that will shape the future expectations the most.
We can see in the snapshot above the classic risk-off environment with commodity currencies selling off while USD, CHF and especially the JPY outperform.
We have a similar story in other risk assets with the US indices trading near the lows of the day and bitcoin threatening new lows.