President Trump has returned to his theme of threatening to impose tariffs not just on certain countries but also on certain categories of goods, which will be making waves in an already turbulent market, and is boosting the USD.
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- In recent hours, President Trump has threatened to impose new and relatively high tariffs on:
- Countries that pose security threats to the USA
- Computer chips
- Pharmaceuticals
- Steel
- Aluminum
- Copper
- Notably, Trump suggested that the targets could escape the tariffs by building plants in the USA. It seems that Trump is trying to use tariffs both as a means to create jobs within the USA and as a disincentive to hostile or subversive behavior towards the USA. These threats have boosted the USD, which may rise further over the course of today.
- Yesterday saw stock markets hit hard in most of the world, with the American NASDAQ 100 Index having a very bad day, trading lower by approximately 1,000 points at one time, after Chinese AI firm DeepSeek launched a new chatbot which appeared to perform as well as ChatGPT while using fewer resources. AI-related equities plunged dramatically, with NVIDIA losing 12% of its value. There has been some recovery in the non-Chinese tech sector, but almost all stock markets are notably lower than they were at the end of last week. Arguably, stocks have become overvalued and so are vulnerable to knocks such as this, with even non-technology shares losing value. DeepSeek will be a wake-up call to the American tech industry, which seems to be facing a serious AI challenge from China.
- In the Forex market, since todays Tokyo open, the US Dollar has been the strongest major currency, while the Japanese Yen has been the weakest, putting the the USD/JPY currency pair in focus. It has already been getting a lot of attention due to the Bank of Japan's rate hike last week and the expectation of further rate hikes later in 2025.
- Corn futures have lost value, but remain within a long-term bullish trend, despite not breaking to new highs.
- There will be a release of US Consumer Confidence data today.
- Yesterday saw lower than expected Chinese PMI Manufacturing data.
- It is a public holiday in China today.
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