"The reaffirmation of a temporary 10% global tariff, potentially rising to 15%, keeps trade risks elevated and fuels concerns about new measures. A renewed escalation in trade tensions could revive the risk-off dynamics that previously weighed on US assets and the currency."
"Federal Reserve Bank of Boston President Susan Collins signalled that holding rates steady remains appropriate given labour market improvements and lingering inflation risks, while Richmond Fed leader Thomas Barkin emphasised that policy is well calibrated to manage current economic conditions. That messaging has supported a modest rise in Treasury yields across maturities, helping to anchor the dollar."
"Private-sector employment data showed steady momentum, with hiring accelerating for a fourth consecutive week. Attention now turns to the release of initial jobless claims. A reading consistent with labour resilience could reinforce yield support and stabilise the dollar, while a surprise deterioration would quickly challenge that narrative and weigh on the currency."
President Trump's State of the Union address reaffirmed a temporary 10% global tariff potentially rising to 15%, maintaining elevated trade risks and threatening US assets and currency strength. Federal Reserve officials adopted a cautious stance, with Boston Fed President Susan Collins supporting steady rates given labour market improvements and inflation concerns, while Richmond Fed leader Thomas Barkin noted policy is well calibrated. Private-sector employment accelerated for a fourth consecutive week, supporting modest Treasury yield increases across maturities. Upcoming jobless claims data will be critical—resilient labour market readings could reinforce yield support and stabilize the dollar, while deterioration would challenge this narrative and pressure the currency.
Read at London Business News | Londonlovesbusiness.com
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