A look at the day ahead in European and global markets from Kevin Buckland
And so it begins.
Trump took to his platform Truth Social late on Monday to threaten 25% tariffs on Mexico and Canada if they don't better control their borders, and additional tariffs on China.
Asian investors still sipping their morning coffees were suddenly racing to hit the sell button, sending the Mexican peso down more than 2% on the dollar at one point and Japan's Nikkei almost 2% lower. Automakers were standout losers. Toyota (NYSE:TM) tumbled close to 3% and Nissan (OTC:NSANY) nearly 5%.
Most markets regained some composure by midday in Asia but pan-European STOXX 50 futures are still pointing down by about 1%, with traders wary that Europe will soon be in Trump's cross-hairs.
The episode conjures uncomfortable memories for markets that have got used to reacting to scheduled events such as Fed policy announcements and monthly payrolls reports during Joe Biden's tenure as president. Now, investors must brace for market-moving Trump posts at any hour, like during his first term in office.
One analyst quipped that it was time to consider downloading Trump's Truth Social app since X, formerly known as Twitter, is no longer the incoming President's platform of choice.
But going by Trump's first term, social media posts and reality haven't always matched up. There's still some way to go before Trump takes the oath again in January, meaning sentiment towards Mexico, Canada and other tariff targets could change.
Ultimately, Trump has said many times, he's all about making deals.
There's little on the calendar in Europe to distract from Trump's post, barring some central bank speakers from around the region.
Bank of England chief economist Huw Pill is due at the House of Lords to take questions on Britain's economic health, or lack of it.
ECB board member Elizabeth McCaul speaks in Frankfurt and peer Mario Centeno presents the Bank of Portugal's financial stability report.
Riksbank Deputy Governor Anna Seim joins a seminar in Stockholm and Bank of Finland Governor Olli Rehn answers questions in parliament.
Later in the day, the Fed releases minutes of its early November meeting when it cut rates by a quarter point, following the first, super-sized half-point cut of the current easing campaign in September.
Key developments that could influence markets on Tuesday:
- BoE's Pill in upper house
- ECB's McCaul and Centeno speak at separate events
- Riksbank's Seim speaks
- Bank of Finland's Rehn in parliament
- Fed minutes
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