Daily Global Macro Update
Whipsaw of tarif have left businesses across continents especially in US? temporarily frozen, anxiously waiting to see what’s next - now appears consumers are reacting too as well.
Apart from the tariff impact, Trump 's arbitrary approach towards allies is what is? unsettling the markets.Crisis moments like this normally fade and relationships trend back toward historical norms. But this time appears bit different.A new world order is possibly emerging. So currencies pause to measure the impact.
Growth has been unsung hero supporting stocks through all this policy volatility .The fear is that in case growth starts to give away,? equity market could come under pressure - After weak Jan retail sales data, weak flash Feb PMIs & plunging consumer confidence - some subtle indications ..
The biggest risk now? is that the inflation story kind of rears its ugly head again in the second half-would entail “inflation not just being sticky, but picking up” more than expected, either through wage growth or price acceleration in? U.S. services sector.
Germany’s political landscape : almost? certain of Grand coalition -? marginal? chance of a "Kenya" govt- less fragmented Parliament & a two-party govt -Germany's presence in the EU will likely be stronger compared to previous govt- grand coalition could bring tax cuts for households and corporates without cuts in social expenditures, as well as some deregulation
As Merz plans to pivot from US ,Germany will suddenly look like it has? backbone. Its a seismic shift- may read like hyperbole, but what we are now experiencing in terms of transatlantic relations is unprecedented in 80 years since the end of WWII - might change how capital flows happen into US from Europe -US will be loser - in markets , Wunsch: We must not “sleepwalk” to cutting rates to 2%. 1.0430- 1.0530
US Europe friction tilts China to Europe .China tech rally - Catchy monikers - Six Little Dragons, Seven Sisters and the Terrific Ten- rival 'Mag Seven' in US- private sector embraces DeepSeek,?integrates model?into their products and services. DeepSeek set to buoy ByteDance value? to $ 400 bio
Lombardelli, Ramsden, and Dhingra spea k today . Its all about Dollar weakness - 1.2616- 1.2734Source based story?
BoJ is not too worried about the moves higher JGB? yields, "which are grinding rather than abrupt" - too good to believe - break below 149.30 still looks a false one - should close past 149.30.
Operational exercise to push the maturing forwards into three year bucket through whole sale means - unintended consequence is that it could create spot demand if corporates choose to hedge - Carry & growth prospects normally shield rupee and with both easing off, USDINR to stay well supported? - 86.55 86.85 still..?