Has the Impact of Trump Tariffs Subsided? Markets Shift Focus to EU and UK Tariffs

Has the Impact of Trump Tariffs Subsided? Markets Shift Focus to EU and UK Tariffs

■ Recent Market Developments

📌 Markets Initially Shaken by Trump Tariffs but Stabilizing Gradually

• At the start of the week, the implementation of tariffs on Mexico, Canada, and China triggered a strong dollar and yen appreciation.
• Temporary agreements with Mexico and Canada granted a 30-day to 1-month grace period, easing market concerns.
• A 10% tariff on China was officially enacted, prompting China to retaliate with rare metal export restrictions and possible Google-related sanctions.

📌 Next Targets: Europe, the UK, and Possibly Japan?

• The Trump administration is now turning its tariff policy toward the EU and the UK, with a focus on automobiles and agricultural products.
• Japan may also be on the list, which could sustain yen appreciation pressure.

📌 Market Reaction Is Easing

• Stock markets rebounded after initial declines, and yen and dollar appreciation slowed.
• Markets may have developed “immunity” to Trump tariffs.

■ Market Strategy Going Forward

✅ Bullish Outlook

AUD (Australian Dollar) & NZD (New Zealand Dollar)

• Limited direct impact from Trump tariffs → Last week’s sell-off may have been an overreaction.
• Oceania currencies could benefit from the recovery in risk assets → Bullish bias remains.

U.S. Stocks (S&P 500 & NASDAQ)

• With trade risks easing, equities may continue their recovery.
• Particularly, tech stocks (NASDAQ) have room for a rebound depending on earnings reports.

Cryptocurrencies (BTC, ETH, SOL, etc.)

• Brief sell-offs triggered by tariff concerns present buying opportunities.
• Bitcoin’s push toward $100,000 remains a key focus.

Gold (XAU/USD)

• As long as risk-off sentiment persists, gold will attract safe-haven buying.
• A pause in dollar strength could further support gold’s upside.

✅ Bearish Outlook

EUR (Euro) & GBP (British Pound)

• EU and UK tariffs are now in focus, which could weigh on the euro and pound.
• ECB rate cut expectations remain strong, maintaining selling pressure on the euro.
• The Bank of England (BOE) is also moving toward a rate cut, making the pound vulnerable.

USD/CAD (Canadian Dollar)

• Among the most impacted currencies by Trump tariffs.
• Despite a short-term recovery, the long-term outlook remains bearish for CAD.

■ Entry Points

■ Upcoming Key Events

📌 February 6 (Tuesday)

• U.S. December JOLTS Job Openings (Insight into labor market strength)
  📌 February 7 (Wednesday)
• BOE (Bank of England) Interest Rate Decision (Impact on GBP)
  📌 February 8 (Friday)
• U.S. January Nonfarm Payrolls (Crucial for the Fed’s monetary policy outlook)

■ Weekly Trading Plan

✅ Follow short-term trends and enter trades accordingly.
✅ Sell currencies highly exposed to tariffs (EUR, GBP, CAD).
✅ Maintain a bullish stance on risk assets (AUD, NZD, BTC, Gold, U.S. stocks).
✅ First half of the week: Trump tariffs dominate, second half: BOE & U.S. payroll data take center stage.

■ Summary

The Trump tariff shock appears to be fading, but the next targets could be the EU, UK, and Japan.
In the short term, risk-off sentiment is retreating, presenting buying opportunities in AUD, NZD, U.S. stocks, gold, and cryptocurrencies.

Conversely, EUR, GBP, and CAD remain vulnerable to tariff risks, making them primary targets for selling.

With high market volatility, careful position management and flexibility in trading are crucial.
This week’s trading strategy revolves around Trump tariffs + U.S. payroll data, requiring a strategic yet cautious approach to capitalize on market moves.🔥💹