Tuesday starts with heavy news flow and heightened volatility. Overnight, Donald Trump made two impactful announcements that shook global markets. First, he declared that he is removing Fed Governor Lisa Cook, a move that adds more uncertainty to the future direction of U.S. monetary policy. Second, he threatened substantial new tariffs on all countries with digital taxes, immediately rekindling trade war concerns. These two developments are dominating sentiment at the start of the European session.
The calendar for today is also busy. We’re looking at durable goods orders from the U.S., expected to come in at minus 3.8%, followed by CB consumer confidence at 96.4. The day will wrap up with a speech from Bank of Canada Governor Macklem, which could bring some direction for the Canadian dollar.
On the markets, indices are opening in the red, though losses are relatively modest so far. In the FX space, European currencies are pushing higher against their peers, while the U.S. dollar, Canadian dollar, Australian dollar, and Japanese yen are flat, lacking any strong momentum. Oil, however, is seeing sharper moves — after a strong rally on Monday, crude is now correcting heavily to the downside. Metals, on the other hand, remain broadly positive, holding recent gains. Cryptocurrencies continue to struggle, extending their sell-off from the weekend. Bitcoin has slid to its lowest level since July 9th, marking a significant setback for the crypto market.