U.S. stock futures also rose after a volatile start on Monday, as traders digested Trump’s remarks on economic policy and trade levies. For your partEuropean stocks make slight gains.
Nasdaq futures up 0.6% and S&P 500 futures up 0.5%. European automakers fell 0.4% (.SXAP) on Tuesday after Trump revoked a 2021 executive order signed by his predecessor, which sought to ensure that half of new vehicles sold in the United States by 2030 were electric .
Juan Manuel Franco, chief economist of Grupo SBS, pointed out that “The international market will closely follow the announcements of US President Donald Trump, especially linked to tariffs on imports to his country and measures with a fiscal impact.”
He added that it must be remembered that, in principle, Trump’s fiscal and trade policies would result in a stronger dollar globally, higher market interest rates in dollars and downward pressure on raw material prices.
“On the local side, meanwhile, the market will closely follow the dynamics of rates in pesos, with the BCRA not announcing changes in the reference rate for the moment. Liquidity in pesos will also be looked at, with a stock of LEFIs in the hands of private banks which, as of the latest official data (last Friday), has been at a minimum since the creation of this instrument,” he concluded.
Currencies under threat
The Mexican peso and the Canadian dollar plummeted on Monday nightreversing the sharp increases recorded earlier in the day, after Trump mentioned that he was considering imposing 25% tariffs on neighboring countries starting February 1. This caused the Mexican peso to fall 1.3% against the US dollar, while the Canadian dollar fell to a five-year low of $0.689.
About 11 hours earlier, the U.S. dollar had fallen against its major peers after a presidential memo, first reported by the Wall Street Journal, said the administration would investigate trade issues but ruled out imposing tariffs on day one. The dollar index, which measures the currency against six peers, rose 0.64% on Tuesday to 108.69, although it failed to recover the 1.2% lost on Monday in its biggest daily drop since November 2023.
Dollar: Trump’s turbulence
The dollar has risen about 5% since Trump won the Nov. 5 election, partly because of the strength of the U.S. economy and partly because investors brace for wide-ranging tariffs that are likely to hit U.S. trading partners. USA.
Many investors were expecting early action on the tariffs, hence the big moves generated by the memo indicating a lack of immediate action.
US Treasury yields fell 4 basis points on Tuesday to 4.57% after the market reopened after a public holiday. However, yields have risen nearly a percentage point since the Federal Reserve cut rates by 50 basis points in September, reflecting an economy that has continued to grow strongly.
Chinese stocks were volatile but ended higher as Trump avoided definitive threats against the country’s exports. The CSI 300 Index (.CSI) rose 0.1%. Trump warned that he could impose tariffs on China if Beijing did not approve a deal for a US company to co-own the short video app TikTok.
“At some point, we’re pretty sure Trump will start to act on tariff measures,” said Khoon Goh, head of Asia research at ANZ. “Just because I haven’t addressed this on day one doesn’t mean it’s off the agenda. It’s definitely firmly on the agenda; we just have to wait and see what shape it takes.”
Elsewhere, Trump’s new cryptocurrency token lost some of its strong gains on Tuesday, falling 20% to $35.27, after reaching a market valuation of over $10 billion at the start of the week.
Source: Ambito
