Trump’s EU U-turn
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Why did Trump’s EU tariff deadline get pushed back to July?
Wrong way, go back. It must have been a sign in a dream that Donald Trump had on Sunday night because he did a U-turn on Europe. Well, at least he kicked the can down the road, and European equities have bounced back as a result. It doesn't mean the problem has gone away, of course. And is the Chris in the card making matters worse from the ECB? Having a pitch for the reserve currency. It's a quiet day ahead with the US and UK returning from their holidays and And today we get consumer confidence starter for Europe and the United States. And some interesting moves in currencies we'll look at today, including the Aussie hitting the highest for the year to date. I'm Phil Dobby. This is the morning call from NAV for Tuesday, the 27th of May, 2025.
It was a public holiday on Monday in the United States and in the UK, so nothing to tell you about shares in either of those places. We did see a big move in the DAX, though, up 1.7%, and 1.3% for the Eurostocks 50, no doubt driven by the news that we touched on at the end of yesterday's podcast. A last-minute reprieve for Europe when it comes to tariffs, well, kick down the road anyway, to July. Bond yields down, four basis points for Ten years in Canada, down one in Germany, two in France, three in Italy. Aussie ten years were down four basis points yesterday to four point three eight percent on futures now, down another five basis points. Uh just a naught point one percent drop in the US dollar on the DXY.
Now at ninety nine, uh it got below ninety eight point seven this session. The Aussie uh is marginally down, uh just above sixty four point eight US cents, but it did reach uh the highest for the year to date. We'll come to that uh shortly. The euro and the pound, uh both up 0.2%, but you know, not really big currency moves today. Uh and the moves in oil, small. So small it's not even worth mentioning. But gold down 0.7% today, still pretty elevated of course. Uh Bitcoin down as well, but not much. But year to date it is up seventeen percent compared to the SP Which is down slightly year to date. And Rodrigo Cotrill joins me this morning.
How did the tariff postponement affect European equity markets?
It's a fairly quiet morning. The US still on holiday for the next few hours at least, anyway. Same in the UK. But in Europe, shares are up a fair bit because of that July the 9th deadline. Somewhat better than June the first, isn't it? And I guess everyone is thinking, you know, if they've negotiated to push back the debt. Does that also mean that they are going to not have to pay that fifty percent? But even if that fifty percent was to come down to twenty five percent or twenty percent in a month's time, that is still pretty disastrous for Europe, isn't it?
Well yeah, so th that that's that's absolutely right. So I I I think there's a couple of takeaways from this. One, uh there's a consistent pattern that is is is starting to appear when it comes to President Trump. Um, you know, there's a big threat, um, then you know, create a bit of panic and then we we go back to where we were. Um so um the more you do that, of course, the the less efficient um that strategy becomes and Um we seem to sort of be heading in that direction. Um but as you say, the the uncertainty as well is like well what is actually the negotiation level when it comes to the ninth of July? Are we back to that twenty or is the fifty the starting point? So um again another layer of uncertainty in terms of uh the trade negotiations.
Um but what it also does suggest is that um uh the US and President Trump in particular particular, they are looking for a deal. Uh they want to reach a you know an agreement that benefits uh both parties and particularly the the US and um and they they kind of showing their cards in a sense because um they obviously they they want or they are just as keen as as striking a deal as soon as possible. So um hopefully that's good news in terms of where we land for for terrorists uh but In terms of the the uncertainties, um there appears to be a level or a heightened level of discomfort in terms of how the negotiations are going with Europe.
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Chapters
8 chapters
1
Why did Trump’s EU tariff deadline get pushed back to July?
0:01–2:03
2
How did the tariff postponement affect European equity markets?
2:03–4:55
3
What is Christine Lagarde’s view on the future of the US dollar as a reserve currency?
4:55–8:23
4
What pattern does Rodrigo Cotrill see in Trump’s ‘threat‑then‑recede’ trade strategy?
8:23–10:38
5
Why are the Australian dollar and Chinese yuan moving higher right now?
10:38–13:20
6
How are Japan’s upcoming elections influencing its trade talks with the US and Europe?
13:20–15:57
7
What impact could the delayed US‑Europe deal have on the Federal Reserve’s rate‑cut timetable?
15:57–16:17
8
Is US consumer confidence still falling, and what does that mean for the market?
16:17–16:19