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By HFblogNews · Posted
Date: 03rd February 2025. What do Trump's Tariffs Mean for the Financial Trading Markets? The announcement of the first Trump tariffs sends volatility through the roof. The market’s first reaction is to sell stocks and buy the US Dollar. The first countries to be hit by tariffs are Canada, Mexico and China. However, the US President also gave interesting indications on the government’s next moves. SNP500 - Tariffs on China, Canada and Mexico Send Stocks Lower! The SNP500 opens on a bearish price gap measuring 1.54% but trades 1.76% lower than Friday’s close. The decline is driven by a sharp drop in risk appetite from tariffs on Mexico, Canada, and China. The VIX, a risk sentiment indicator, is up over 8%, reflecting the fall in market confidence. Today’s sharp decline is one of the strongest seen in 2025 so far, but up to now remains weaker than the 2.95% decline from January 27th. The previous decline was due to the global repercussions of Chinese AI companies gaining momentum. However, this recent decline indicates that today’s downward trend may still gain momentum when the European and US sessions open. The only concern for traders is the price is trading close to the SNP500’s recent support level. The SNP500’s support level at $5,920 in the previous week triggered an upward correction, partially fueled by earnings data. Alphabet is due to release its quarterly earnings report tomorrow after market close and Amazon on Thursday. Therefore, traders should be cautious that while the downward risk remains great, the earnings data may prompt demand similar to the week before. China has also made a statement advising they are currently working on a trade proposal with the US in order to avoid tariffs. If an announcement is made indicating an agreement with China, the SNP500 could potentially gain bullish momentum. However, no such announcement has yet been made. The US 10-ear Bond Yields increase in value during the Asian session and the VIX index continues to rise as the European session edges closer. If bond yields and the VIX continue to increase throughout the day, the bearish bias is likely to strengthen. According to price action and price momentum indicators, the SNP500 is likely to witness sell signals at $5,924 and below. Euro - The Day’s Worst Performing Currency! The Euro is coming under pressure due to Trump’s latest interview as he was walking off Airforce One. President Donald Trump commented on the first tariffs on Mexico, Canada and China, but also said that tariffs “will definitely happen with the European Union”. Whereas, with the UK he was less concrete in his response. With the UK Trump advised there will likely be tariffs but they “may be able to work” something out. In terms of the European economy, December retail sales dropped 1.6% month-over-month (MoM) and slowed from 2.9% to 1.8% year-over-year (YoY). This reinforces the expectations of further interest rate adjustments by European Central Bank (ECB) officials. In the Eurozone’s largest economy, conditions for this shift are in place, as inflationary pressures ease and economic growth weakens due to sluggish demand and lower household activity. Additionally, Bank of Finland head Olli Rehn and Bank of Estonia governor Madis Müller emphasized the priority of a dovish policy stance in his speech on Friday. The Euro is currently the worst-performing currency of the day. The US Dollar - Safe Haven Status Increases Investor Demand! The US Dollar is currently the best performing currency due to its safe haven status. The USD Index is currently trading 1.25% higher and is the only currency index witnessing gains. The currency is witnessing the strongest gains against the Euro and the New Zealand Dollar. Consumer inflation in the country remains well above the 2.0% target, and some analysts believe it has stabilized at this higher level, raising the chances of a pause in monetary easing. This is likely to continue supporting the US Dollar, particularly if this week’s employment data beats expectations. Key Takeaways: Trump's announcement of tariffs on Mexico, Canada, and China sparks a sharp market decline, with the S&P 500 down by 1.76% and risk appetite falling. As the US 10-year bond yields increase and the VIX climbs, bearish momentum strengthens, signaling further declines in the S&P 500. The Euro weakens after Trump hints at potential tariffs on the European Union, with December retail sales and ECB policies adding to downward pressure. The US Dollar benefits from its safe haven status, rising 1.25% as investors seek stability amid tariff-related uncertainty. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission. -
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The indicator in Post #1 is now FREE and unlimited!
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By Stocks4life · Posted
GBTC Grayscale Bitcoin Trust ETF watch for a top of range breakout at https://stockconsultant.com/?GBTC -
By Stocks4life · Posted
PLTR Palantir Technologies stock, watch for a top of range breakout, earnings 2/3 aMkt at https://stockconsultant.com/?PLTR
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