Stock markets, especially tech stocks, are trading higher after this week opens in Asia, following Trump's decision to temporarily exempt electronic goods from the new retaliatory tariffs.
- Stock markets are trading higher almost everywhere as the new week opens, due mostly to President Trump's announcement at the end of last week that electronic imports such as smartphones, tablets, and computer chips would be exempt from the new retaliatory tariffs announced by his administration. This was especially good news for companies such as Apple which rely heavily upon these supply chains. Although Trump clarified that the exemption will only be temporary, and that a rate for semiconductors would be announced this week, there is so much uncertainty around the issue that this has been sufficiently good news to lift stock markets in both Asia and in off-hours trading around the world. The Chinese HSI is trading more than 2% higher and the Japanese Nikkei 225 Index is up by more than 1.5%.
- Markets are still digesting Friday's important US economic data releases, which saw PPI, a key inflation metric watched closely by the US Federal Reserve, come in much lower than expected. Month-on-month, PPI fell by 0.4% while it was expected to increase by 0.2%, suggesting a considerable lowering of inflationary pressure which may increase the likelihood that the Fed will cut by 1% over 2025 and not 0.75%. Preliminary UoM Consumer Sentiment data was also considerably lower than expected, suggesting that consumer sentiment in the US is declining further on fears that the new tariffs will raise prices of consumer goods.
- The Forex market is dominated today by a declining US Dollar, with the US Dollar Index reaching a new 4-year low last Friday. The two major currency pairs, the EUR/USD and the USD/JPY are in strong long-term trends, albeit with a high degree of volatility. Many traders will see an opportunity to profit by shorting the US Dollar, especially in the EUR/USD currency pair, which reached a 3-year high on Friday, and is now again showing short-term bullish momentum at the time of writing.
- Precious metals, Bitcoin, and WTI Crude Oil are showing little price movement this morning, although metals and commodities mostly gained last Friday. Gold traded at a record high on Friday above $3,245 and that has attracted interest from trend traders on the long side.
- There are no high-impact market data releases due today. Markets will certainly be dominated by speculation over the next moves by the US administration on tariffs.
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