Market Commentary: Wednesday 22nd January

The headlines are all related to President Trump:

• Trump threatens to impose 10% tariffs on all Chinese imports, possibly by February 1, citing unfair trade practices.
• Trump targets the European Union, saying they treat the U.S. "very, very badly" and will face tariffs due to a $350 billion trade deficit.
• Trump's administration is taking a methodical approach for future tariff actions, holding off on immediate tariffs on China.

The backdrop to this is that stocks are performing well: the Dow Jones closed +1.24%, and the Nikkei +1.58%. SoftBank Group’s shares rose more than 11% as the company was named as a participant in the ‘Stargate’ AI joint venture. Yields are relatively stable; U.S. 10-year Treasury yields advanced one basis point, and the dollar strengthened against every Group-of-10 peer.

In other markets:

• Bitcoin fell 1.1% to $105,610.48.
• Ether fell 0.3% to $3,323.80.
• Japan’s 10-year yield advanced 1.5 basis points to 1.200% (rate decision on Friday).

In commodities:

• West Texas Intermediate crude was little changed at $76.40.
• Spot gold rose 0.4% to $2,755.23 an ounce.

Data-wise, it’s a quiet day. The U.S. Conference Board leading index is the highlight, and there is a speech from President Lagarde at 15:15.

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