MNI EUROPEAN OPEN: Trump Raises Steel/Aluminium Tariffs
EXECUTIVE SUMMARY
- TRUMP RAISES TARIFFS ON ALUMINIUM, STEEL IMPORTS IN LATEST TRADE WAR SALVO - RTRS
- HAMAS SAYS IT WILL STOP RELEASING ISRAELI HOSTAGES, THROWING GAZA CEASEFIRE INTO DOUBT - RTRS
- BOE’S MANN SAY WEAK DEMAND OUTWEIGHS INFLATION RISK, FT REPORTS - BBG/FT
- BOJ OFFICIALS HAVE FOUND CONSENSUS ON INFLATION AND WAGES DIFFICULT - MNI
Fig 1: Gold To Fresh Record Highs
Source: MNI - Market News/Bloomberg/Refinitiv.
UK
BOE (FT/BBG): “A Bank of England voting member who backed an outsized interest rate cut last week sees companies struggling to raise prices as consumers pull back on spending, according to an interview with the Financial Times.”
POLITICS (BBC): “The UK must respect President Donald Trump's "strong and clear mandate for change", the new UK ambassador to the US has told the BBC on his first day in the role.”
EU
EU (POLITICO): “The Greek government is fiercely lobbying France to halt the sale of radar-guided, air-to-air Meteor missiles to Turkey.”
GERMANY (ECONOMIST): “On Tuesday Alice Weidel, the co-chair of the populist and xenophobic Alternative for Germany, will pay Viktor Orban a visit in Budapest. Ms Weidel is an admirer of the reactionary Hungarian prime minister. The meeting comes soon after Europe’s hard-right held a triumphant get-together over the weekend in Spain.”
FRANCE (POLITICO): “French President Emmanuel Macron has picked one of his closest allies to lead France’s highest constitutional authority, just weeks before it is slated to rule on a case likely to impact Marine Le Pen’s political future.”
FRANCE (FRANCE24): “France is "back in the AI race", President Emmanuel Macron declared Monday evening at Paris's artificial intelligence summit. His comments came just days after the Élysée and the UAE announced their agreement to develop a vast AI campus and data centre in France.”
UKRAINE (FRANCE 24): “Ukrainian President Volodymyr Zelensky is set to discuss the Trump administration's push for an end to the almost three-year war between Russia and Ukraine with US Vice President JD Vance at the Munich Security Conference this Friday, a source in the president's office said.”
UKRAINE (POLITICO): “Ukrainian President Volodymyr Zelenskyy said Monday that “serious” members of U.S. President Donald Trump's team will travel to Ukraine this week, the first such visit since Trump took office.”
ROMANIA (BBC): “Romania's President Klaus Iohannis has resigned, a day before he faced an impeachment vote sparked by the cancellation of the country's presidential election last year. Opponents had been pushing to suspend him over his decision to remain in office until a new vote in May.”
US
TARIFFS (RTRS): “President Donald Trump substantially raised tariffs on steel and aluminum imports on Monday to a flat 25% "without exceptions or exemptions" in a move to aid the struggling industries but which increases the risk of a multi-front trade war.”
INFLATION (MNI BRIEF): Inflation expectations in January remained unchanged at the short- and medium-term horizons but the longer term measure jumped three tenths to the highest since May, according to the New York Fed's monthly survey of consumers Monday.
FED (MNI INTERVIEW): Fed To Look Through Trump Price Bumps-Shelton
MIDDLE EAST (ECONOMIST): “On Tuesday King Abdullah of Jordan will meet Donald Trump at the White House. He will be the first Arab leader to meet the American president since his return to office.”
TECH (WSJ/BBG): “ A group of investors led by Elon Musk has offered to buy the nonprofit that controls OpenAI for $97.4 billion, escalating a clash between the Tesla chief executive and the artificial intelligence company he co-founded.”
OTHER
MIDDLE EAST (RTRS): “Hamas on Monday announced it would stop releasing Israeli hostages until further notice over what the Palestinian militant group called Israeli violations of a ceasefire agreement in Gaza, raising the risk of reigniting the conflict.”
JAPAN (MNI): BOJ officials have found consensus on inflation and wages difficult. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
CHINA
CONSUMPTION (YICAI): "China must prioritise raising consumption levels to expand domestic demand, said Premier Li Qiang during a State Council Executive Meeting."
CONSUMPTION (CSJ/BBG): "Sales of cars, home appliances, and digital products under trade-in programs totaled 31 billion yuan during the Chinese New Year holiday, showing that government policies have boosted consumer confidence, according to a report in the China Securities Journal."
LOCAL GOVERNMENT DEBT (EID/BBG): " Local governments have issued or announced plans to issue special bonds totaling 378 billion yuan this year to refinance their hidden debts, as part of efforts to reduce financing costs and boost domestic spending, according to a report in the Economic Information Daily."
CHINA MARKETS
MNI: PBOC Net Injects CNY33 Bln via OMO Tuesday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY33 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY33 billion as no reverse repos mature today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.6429% at 09:35 am local time from the close of 1.8038% on Monday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 54 on Monday, compared with the close of 46 on Saturday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Higher At 7.1716 Tues; -1.53% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 7.1716 on Tuesday, compared with 7.1707 set on Monday. The fixing was estimated at 7.3072 by Bloomberg survey today.
MARKET DATA
UK JAN. BRC LIKE-FOR-LIKE RETAIL SALES +2.5% Y/Y; EST. +1.0%; PRIOR +3.1%
AUSTRALIA FEB. WESTPAC CONSUMER CONFIDENCE 92.2; PRIOR 92.1
AUSTRALIA FEB. WESTPAC CONSUMER CONFIDENCE +0.1% M/M; PRIOR -0.7%
AUSTRALIA NAB JAN. BUSINESS CONDITIONS +3; PRIOR +6
AUSTRALIA NAB JAN. BUSINESS CONFIDENCE +4; PRIOR -2
MARKETS
US TSYS: Futures Slightly Weaker, More Tariff Headlines, Fed Chair Testimony Due
TYH5 is 109-06, -0-01 from NY closing levels.
- Headlines have continued to rattle markets & squelch sentiment.
- Since the market close, headlines have stated that US President Donald Trump signed an order imposing 25% tariffs on steel and aluminium, with no exemptions. The tariffs also target finished metal products and take effect on March 4. Trump indicated tariffs on cars, drugs, and chips could follow, with further reciprocal tariffs expected within two days.
- That said, “US President Donald Trump has declared he would give "great consideration" to a tariff exemption for Australia.” (per ABC)
- There has been no cash trading for US tsys in Asia-Pac session today with Japan out for the Foundation Day Holiday.
- The focus turns to Fed Chairman Powell's testimony to the Senate Banking Committee today at 1000ET (text, Q&A). There is also a $58bn 3-year Treasury note sale.
AUSSIE BONDS: Slightly Richer, Tariff Exemption For AU?, Fed Chair Testimony Due
ACGBs (YM +1.0 & XM +1.0) are slightly stronger after today’s confidence data drop.
- Westpac’s measure of consumer confidence was little changed in February rising 0.1% m/m to 92.2 as the positive effect of increased talk of a February rate cut following the Q4 CPI data was offset by global uncertainty and continued cost-of-living pressures.
- NAB January business confidence picked up to +4 from -2, its highest in three months. The series has been oscillating around the zero mark for around two years. Conditions moderated further to +3 from +6, in line with the November outcome.
- “US President Donald Trump has declared he would give "great consideration" to a tariff exemption for Australia.” (per ABC)
- Cash ACGBs are 1-2bps richer.
- There has been no cash trading for US tsys in Asia-Pac session today with Japan out for the Foundation Day Holiday. TYH5 is little changed.
- The focus turns to Fed Chairman Powell's testimony to the Senate Banking Committee today.
- Swap rates are 1bp lower.
- The bills strip is flat to +1 across contracts.
- Tomorrow, the local calendar will see Home Loans data.
- This week, the AOFM plans to sell A$400mn of the 2.75% 21 May 2041 bond tomorrow and A$700mn of the 1.50% 21 June 2031 bond on Friday.
BONDS: NZGBS: Closed Slight Mixed After NZ$5.5bn Syndicated Tap Of May-35 Bond
NZGBs closed slightly mixed in the middle of the session’s ranges on a data-light day.
- NZGBs did, however, manage to slightly outperform ACGBs, with the NZ-AU yield differential 1bp tighter on the day.
- There has been no cash trading for US tsys in Asia-Pac session today with Japan out for the Foundation Day Holiday. TYH5 is little changed.
- Swap rates closed 1-3bps lower, with the 2s10s curve flatter.
- RBNZ dated OIS pricing closed little changed. 49bps of easing is priced for February, with a cumulative 121bps by November 2025.
- “NZ’s residential construction market may start to recover in 2H of 2025, the Treasury says in Fortnightly Economic Update. ANZ business survey shows residential building intentions are highest since 2021.” (per BBG)
- Today, the local calendar was empty. Tomorrow Treasury Chief Economic Adviser Dominick Stephens will deliver a presentation titled ‘The State of the Economy’. The next data release is Card Spending on Thursday.
- NZ Debt Management has issued NZ$5.5bn of May 2035 bonds via a syndicated tap. The bonds, which carry a coupon of 4.50%, were issued at a spread of 11bps over the 15 May 2034 nominal bond, at a yield to maturity of 4.65%. Total book size, at final price guidance, exceeded NZ$21.5bn.
FOREX: Steady USD Trends, Tariff Headlines Only Cause Minor Risk Off
Aggregate G10 FX moves have been modest so far in Tuesday trade. The USD BBDXY index sits around 1304, near end Monday levels from the US session. there was an early slight risk-off tone for markets, which benefited the yen, but follow through did not eventuate.
- Early headwinds were dominated by Trump signing tariffs of 25% on steel and aluminium imports. Trump made other remarks in the oval office, stating Tariffs on autos and chips and other areas, including pharmaceuticals will be coming next Trump stated. Reciprocal tariff details will also be released in the next few day, Trump added.
- US equity futures are lower, although losses are not much beyond 0.20% at this stage. There has been no cash Tsy trading so far today, with Japan markets out. Futures in the Tsy space, are little changed.
- USD/JPY liquidity has no doubt been lighter, the pair last around 152.00 (range so far today 151.69-152.06).
- We had Australian consumer and business sentiment readings earlier from Westpac and NAB, but they didn't shift AUD, which was last 0.6270/75. NZD/USD was around 0.5640, also little changed for the session. The AUD/NZD cross is down slightly from recent highs, but still above 1.1100 (last 1.1115/20)
- USD/CAD is slightly higher, following the earlier tariff news, but at 1.4330/35, remains well within recent ranges.
- Looking ahead, the US January NFIB small business optimism prints and Fed Chair Powell testifies to the senate and Fed’s Hammack, Williams and Bowman speak. Q4 French unemployment is released and the ECB’s Schnabel appears, and BoE’s Mann & Bailey speak.
ASIA STOCKS: Tariffs Continue to Dominate, Most Markets Weaker.
- China’s major bourses were lower today as President Trump signing tariffs on steel and aluminium imports as he indicated that autos, chips and pharmaceuticals were next in his sights.
- The Hang Seng lead the way lower down -0.59%, with the CSI 300 down -0.36%, Shanghai Comp down -0.16% and Shenzhen down -0.31%
- Taiwan’s TAIEX bucked the trend rising +0.20% today.
- The Jakarta Composite continued its poor run down -1.50%, to be down for a fifth successive day of trading.
- As Indian markets get going on their trading day the NIFTY 50 is opening very weak, down -0.45% in what could be a fifth successive day of declines.
- Korea however is bucking this trend as discussions in parliament centre around a special budget to stimulate growth in the ailing economy. Yesterday the opposition proposed the idea of an additional budget and the ruling People’s Party said today, it does not oppose the idea.
- The KOSPI is a regional bright spot today up +0.83%
OIL: Crude Holding Onto Gains With Little Reaction To Latest Tariff News
Oil prices have been trading in a narrow range during the APAC session today with little reaction to tariff news and as markets wait for key US CPI data due on Wednesday. Brent is up 0.3% to $76.07/bbl after a high of $76.20 and a low of $75.90. WTI is 0.2% higher at $72.48 following a peak of $72.61 and trough of $72.31. The USD is 0.1% stronger.
- Oil rallied on Monday on a tighter supply outlook due to stricter sanctions resulting in Russia producing below its quota. It has held onto those gains today.
- In recent weeks, there has been a large US crude stock build as Canadian flows rose sharply to beat tariff deadlines. Industry-based US inventory data is released later today and there may be a slowdown as Canada negotiated last week a 30-day delay in the imposition of US tariffs but then producers may continue frontloading shipments to the US just in case they are still implemented in March. A 10% import tariff on Canadian oil was proposed.
- While there hasn’t be a material reaction to US President Trump signing the steel/aluminium tariff order today, oil markets remain concerned that an increase in protectionism will reduce global demand. He said that pharmaceuticals, autos and chips will now be considered.
- Risks to the Gaza ceasefire deal are contributing to increased geopolitical tensions, as well as the US’ tougher stance on Iran.
- Later US January NFIB small business optimism prints and Fed Chair Powell testifies to the senate and Fed’s Hammack, Williams and Bowman speak. Q4 French unemployment is released and the ECB’s Schnabel appears, and BoE’s Mann & Bailey speak.
GOLD: Tariff Threats Lead Investors to Gold.
- News on potential tariffs on steel and aluminum by the US continues to reverberate through financial markets, shaking investor confidence.
- Gold safe haven status has seen another day of gains and its rise swift early in the day reaching a new high of $2,942.68, before giving back some of those gains to be at $2,919.75 – comfortably higher than the opening price of $2,908.26.
- Gold’s ‘safe-haven’ status ensures that in periods where the unpredictability of President Trump’s comments or threats on tariffs spooks markets, gold climbs.
- Evolving news out of China could have material impact for gold as a pilot program for insurance funds is being launched that allows diversification of their asset allocation into gold; with estimates ranging of US$25 to $30 billion could be allocated to the scheme.
- Gold’s appeal is having far reaching impacts globally with South African listed goldminers jumping 2.3% on Monday, following Trump headlines on tariffs.
- Given Gold is impacted by interest rate movements, the day ahead sees the Federal Reserve Chairman Jerome Powell’s semi-annual testimony to lawmakers where market observers will pore over every word for hints as to the direction of interest rates.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 11/02/2025 | 0700/0800 |  NO | GDP | |
| 11/02/2025 | 0845/0845 |  GB | BOE's Mann lecture on Economic Prospects | |
| 11/02/2025 | 1100/0600 | ** |  US | NFIB Small Business Optimism Index |
| 11/02/2025 | 1215/1215 | GB | BOE Bailey's speech on changes in financial markets | |
| 11/02/2025 | - | *** |  CN | Money Supply |
| 11/02/2025 | - | *** | CN | New Loans |
| 11/02/2025 | - | *** | CN | Social Financing |
| 11/02/2025 | 1330/0830 | * |  CA | Building Permits |
| 11/02/2025 | 1350/0850 | US | Cleveland Fed's Beth Hammack | |
| 11/02/2025 | 1355/0855 | ** | US | Redbook Retail Sales Index |
| 11/02/2025 | 1500/1000 | US | Fed Chair Jerome Powell | |
| 11/02/2025 | 1500/1000 | *** | US | US Fed Chair Speech |
| 11/02/2025 | 1630/1130 | * | US | US Treasury Auction Result for Cash Management Bill |
| 11/02/2025 | 1700/1200 | *** | US | USDA Crop Estimates - WASDE |
| 11/02/2025 | 1700/1800 |  EU | ECB's Schnabel in Nuremberg Talk Series' panel | |
| 11/02/2025 | 1800/1300 | *** | US | US Note 03 Year Treasury Auction Result |
| 11/02/2025 | 2030/1530 | US | New York Fed's John Williams | |
| 11/02/2025 | 2030/1530 | US | Fed Governor Michelle Bowman | |
| 12/02/2025 | 0030/1130 | ** |  AU | Lending Finance Details |
| 12/02/2025 | 0900/1000 | * |  IT | Industrial Production |
| 12/02/2025 | 1000/1000 | * | GB | Index Linked Gilt Outright Auction Result |
| 12/02/2025 | 1000/1100 | EU | ECB's Elderson in roundtable at the MNI Connect event | |
| 12/02/2025 | 1200/0700 | ** | US | MBA Weekly Applications Index |
| 12/02/2025 | 1330/0830 | *** | US | CPI |
| 12/02/2025 | 1330/0830 | ** | US | US CPI Annual Revised |
