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Donald Trump, with his aggressive economic policy, continues to profoundly influence global financial markets. For example, in 2024 the US stock market experienced a 7% decline due to uncertainty related to his trade policies. His strategy, based on customs duties and the reduction of the trade deficit, is generating complex dynamics in the bull and bear sectors. Currently, President Trump has accelerated the implementation of tariffs on Canada and Mexico, moving up the expected timelines. This type of measures has generated immediate economic repercussions, triggering a domino effect in the international markets. Donald Trump: the domino effect of tariffs and the risk of inflation The use of customs duties as a negotiation tool has created a chain reaction. The tightening of trade policies could result in an increase in import prices, causing a risk of global inflation. Another possible effect is the competitive devaluation of currencies in the affected countries, an attempt by the involved nations to balance the economic impact. Financial markets are already reacting to this situation, with out-of-scale movements that deserve in-depth analysis. An interesting fact is the performance of the European stock exchanges compared to Wall Street. Since the end of November 2024, the European stock exchanges have recorded a +5.2%, while Wall Street has lost 3.8%. This scenario is an anomaly in the global market. “`html The bond market and Trump’s strategy “` If in the stock sector there is a strengthening of the European exchanges, in the bond sector the opposite is happening. The spread between the 10-year US Treasury bonds and the German Bund is narrowing rapidly. In a few weeks, it has gone from 230 basis points to 160 basis points, indicating an increase in purchases of US securities. This means that, while Wall Street appears weaker, American government bonds are being…

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Filed under: News - @ March 5, 2025 12:21 pm