SUMMARY
The U.S. dollar began the week under pressure amid renewed trade tensions. China’s Ministry of Commerce issued a statement accusing the United States of breaching the terms of their recent trade agreement. In response, former President Donald Trump announced plans to double tariffs on steel and aluminium to 50%, with the increase set to take effect on Wednesday. The UK is reportedly urging the U.S. administration to uphold their zero-tariff agreement, while the EU has voiced strong opposition to the proposed measures, threatening to implement countermeasures of its own.
Attention this week will largely center on Friday’s U.S. employment report, with markets closely monitoring for any signs of labor market strain stemming from trade policy uncertainty and the potential economic impact of tariffs. Expectations are for a softer report, indicating a possible cooling in job market conditions.
Ahead of that, Monday will see the release of ISM manufacturing data, followed by ISM services on Thursday—both anticipated to reflect weakness amid the ongoing trade tensions.
In the Eurozone, focus turns to the ECB meeting on Thursday, where a 25 basis point rate cut is widely expected. Prior to that, Eurozone CPI data on Tuesday is projected to show easing inflationary pressures.
