A little bit of relief was given to equity markets overnight as a report signaling a more gradual approach to implementing tariffs emerged from the Trump team. This would aim to monitor the effects on inflation and maintain negotiation leverage. This early-stage report will be a welcome relief against the growing evidence of price pressures, but tomorrow's CPI release will be of greater focus to potentially shift the Fed’s rate trajectory.
S&P 500 and Nasdaq 100 futures rose 0.3% and 0.5%, respectively, on the back of the news, while the USD Spot Index dipped 0.2%.
For those in London, you won’t be pleased to hear that 10-year gilts crept higher again yesterday, reaching 4.88%. Meanwhile, the BOJ Deputy Governor hinted at a possible interest rate hike next Friday, but JPY remained little changed in response.
In terms of news, we have U.S. PPI and some Fed speakers later today, but tomorrow will draw significant attention with several earnings releases alongside the U.S. CPI report.
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