As global markets kick off a new trading day, here’s a quick snapshot of the key movements and developments shaping the financial landscape:

European and US Markets Edge Higher

European stock markets are modestly firmer in early trade, while US futures point to gains with the Russell 2000 (RTY) outperforming its peers. Investors are digesting the implications of former President Trump’s return to office, marking a pivotal moment for market participants bracing for potential policy shifts.

Dollar Rebounds Amid Tariff Concerns

The US dollar has bounced back following Monday’s selling pressure, supported by renewed tariff rhetoric. President Trump has signaled the possibility of imposing tariffs on Canada and Mexico, adding to trade tensions. The Canadian dollar (Loonie) has notably underperformed amid these developments, reflecting investor unease about the potential economic impact.

Fixed Income and Commodities Mixed

• Fixed Income: Initial early-morning gains in equity benchmarks have moderated, with US Treasuries showing modest firmness. In contrast, German Bunds have slipped into negative territory, reflecting a cautious tone among European fixed-income traders.
• Commodities: Crude oil and base metals are on the back foot as markets weigh the impact of Trump’s tariff rhetoric on global demand and supply dynamics.

Key Data and Earnings to Watch

Looking ahead, market participants will closely monitor several critical data releases and earnings reports:

• Economic Data:
  • Canadian CPI: A key indicator of inflation and potential central bank policy shifts.
  • New Zealand CPI (Q4): Providing insight into the country’s inflation trajectory.
• Earnings Reports:
  Major companies set to release their results today include:
  • Charles Schwab Corp
  • D.R. Horton
  • KeyCorp
  • 3M Company
  • Fifth Third Bancorp
  • Forestar Group Inc.
  • Prologis
  • Netflix
  • United Airlines
  • Interactive Brokers Group Inc
  • Seagate Technology plc
  • Progress Software Corp.
  • Capital One Financial Corp

Market Sentiment: What’s Next?

As investors digest the latest developments, market sentiment remains cautious. The interplay between Trump’s tariff rhetoric and corporate earnings will likely set the tone for trading sessions ahead. With inflation data from Canada and New Zealand on the horizon, along with earnings from heavyweights like Netflix and 3M, the next 24 hours could provide further clarity on the trajectory of global markets.