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(Bloomberg) – Financial markets, which have demonstrated a growing insensitivity to tariff threats in the United States, will face a test in the Monday open after President Donald Trump declared a 30% rate for the European Union and Mexico in force on August 1.
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Trump has increased commercial measures, promising that they reach everyone, from Canada to Brazil to Algeria and inviting commercial partners to negotiate more. In spite of the warnings of complacency of the tastes of JPMorgan Chase & Co., Executive Director Jamie Dimon, investors have behaved so far as if they are counting on the president of the United States to go back, since they have seen previous turns of their administration.
“Investors should not have Trump only to lampo with the tariff threat of 30% on EU’s assets,” Brian Jacobsen, Annex Wealth Management chief economist, wrote in an email. “That level of tariffs is punitive, but it is likely that it hurts more than the United States, so the clock is marking.”
Bitcoin, which is quoted over the weekend, rose to $ 119,489 in the first operations on Monday, a new record.
The currency markets suggested that the risk appetite is beginning to decrease, with the dollar and the highest Japanese against most colleagues in the 10 groups in early trade, while the Australian dollar and the euro led losses. The euro touched its strongest level against the dollar since 2021 this month, since investors evaluated the region’s relative growth prospects. Meanwhile, the Mexican peso established a maximum of one year of 18,5525 against the dollar on July 9.
The criticisms of President Trump and his allies about the management of Jerome Powell about the expensive renewal of the Fed headquarters, with some administration officials who build a case to eliminate Powell from the Board of Governors of the Fed, can also weigh on the markets at the beginning of the week.
Deutsche Bank’s strategist, George Saraveles, said Powell’s potential dismissal is an important and underestimated risk that could trigger a sale of a sale in the US dollar and treasure bonds.
“If Trump were to expel Powell, the subsequent 24 hours would probably see a drop of at least 3% to 4% in the dollar weighted by the trade, as well as a fixed income sale of 30 to 40 basic points, Saravelos said.
The Back and Bonds would entail a “persistent” risk premium, he said in a note, adding that investors may also be anxious for the potential politicization of Fed exchange lines with other central banks.
