Friday’s big takeaway was that politics, not policy, set the tempo again. The US Supreme Court’s decision to curb President Trump’s use of emergency powers for sweeping tariffs has left investors trying to work out what comes next. Not whether tariffs go away. Just which legal route they come back through, and how messy the handover might be.
That uncertainty mattered because tariffs are one of the few levers that can change the inflation story in a hurry. If tariffs are dialled back, the “prices stay higher for longer” fear eases a touch. If they’re reintroduced quickly via another mechanism, markets are back to guessing what the next quarter looks like. Either way, it’s not the sort of backdrop that encourages calm, orderly trading.
Back in the UK, the domestic picture ended the week on a brighter note. Stronger retail spending and a chunky January surplus gave sterling a bit of lift, even if the bigger debate hasn’t gone away: whether the Bank of England starts trimming rates again at its next decision in March. That timing question is still the anchor for UK pricing this week.
In the eurozone, the euro’s story stayed more political than statistical. Reports around ECB leadership churn briefly unsettled sentiment, before pushback helped to steady the mood. The problem is the same as in the US: central bank credibility is easier to dent than to repair, and markets are quick to price the risk.
For Monday morning, the watch-list includes more headlines on US trade policy, and any clues on whether this week’s data keeps central banks on their current track. It’s a week where “one line” from Washington, London, or Frankfurt can do as much as a full dataset.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 7898 0541 to get started.
