Look at the upcoming days in Wayne Cole’s European and global markets.
It was a bumper day for crypto fans after President Donald Trump went to social media to announce his digital assets proposals and announced that it would include Bitcoin (BTC-USD), Ether (ETH-USD), XRP, Solana and Cardano.
Bitcoin is up around 10%, but Ether will ease the touch as details of how the fund will work are still not clear and will likely be outlined at Friday’s White House Script Summit.
Analysts wonder exactly how the reserves are funded given the government’s $36 trillion in debt, so borrowing to buy crypto seems like a tough sell. Some have suggested that the government could use codes seized in criminal cases in recent years, but that is merely a paper transfer rather than a real new demand.
It is also uncertain whether Trump’s 25% tariffs in Mexico and Canada will move on Tuesday with an extra 10% in China. U.S. Secretary of Commerce Lutnick said it would take effect Tuesday with tariffs in Canada and Mexico on Sunday, but Trump has decided whether to stick to the planned 25% level, suggesting that it is not a deal that was made.
There is also a suggestion that if Mexico and Canada agree to place their own tariffs on Chinese imports, Trump may ease the blow if taxation could be delayed until April 1, when trade studies are finalized.
With recent US economic data shocking on the downside, all of the interests have been large, and we now swing the viewed Atlanta FED GDPNOW tracker from +2.3% to -1.5%. Tariffs are essentially taxes on US consumers, and analysts assume that they hurt consumption when states don’t look as exceptional.
The threat of tariffs alone caused a surge in imports in January, making the US trade deficit the most easily on record. Normally, that means a great resistance in GDP from net exports, but analysts said that many of the import jumps could be non-financial money that is not counted in GDP.
Statistical quirks aside, the market is not in the mood for weaker data, and today’s 50.5 ISM forecast errors could potentially increase bonds at the expense of stocks. The market already has a 73 basis points Fed cut by January next year, when investors thought a quarter-point cut was stretchy a few weeks ago.
All pay on Friday will be even more crucial, especially as the Fed chair speaks a few hours after the data was released.
Beijing’s possible response to the tariffs is unknown if they proceed. The National People’s Congress will meet on Wednesday, announcing 2 trillion yuan to 3 trillion yuan ($274 billion to $412 billion) with new stimuli, and perhaps retaliation for US actions.
The story continues