Since Monday, President Trump has decided to impose and then defer tariffs on Canada and Mexico. He then proceeded with a 10% levy on all imports from China, which immediately retaliated with its own levies on the U.S. As this activity starts to calm down today, we can focus on the Old Lady (the BoE). The Bank of England’s monetary policy meeting takes place at midday, and I believe rates will be cut by 25bps to 4.5%. The real interest will be in the voting pattern (8-1) and the projected path of rate reductions for the year ahead—82bps are currently priced into the curve. GBP opens at 1.2480, and selling rallies has been the name of the game.
Elsewhere, banking stocks are back in the news. ING Group NV missed analysts’ estimates for Q4 profit, UBS's share price is down 10% over the last two sessions, while Societe Generale announced a €1.7 billion ($1.8 billion) investor payout for last year, as Q4 profit beat expectations, driven by a recovery in French retail banking.
In other markets, Bitcoin rose 1.1% to $98,033.76, Ether rose 1.8% to $2,837.51, the yield on 10-year Treasuries opens at 4.43%, West Texas Intermediate crude rose 0.4% to $71.33 a barrel, and spot gold opens at $2,860 per ounce.
Data-wise, we have Eurozone retail sales, U.S. initial jobless claims, Amazon earnings, and speeches from the Fed’s Christopher Waller and Lorie Logan.
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