Good morning, traders! The first Monday of February has come in hot, bringing a whirlwind of geopolitical and market-moving developments. Here’s everything you need to know to start your trading day.
Tariff Turmoil: Trump Strikes Again
The biggest headline shaking global markets is Trump’s latest tariff order, which has sent shockwaves across equities, currencies, and commodities. Here’s the breakdown:
✅ 25% tariffs on Mexico and Canada (except for a 10% rate on Canadian energy products).
✅ 10% additional tariffs on China, piling on top of existing levies.
Retaliation Incoming
- Canada wasted no time, swiftly announcing countermeasures.
- Mexico is expected to unveil its own response later today.
- China is taking a legal approach, planning to challenge the tariffs at the WTO.
Global Markets in Risk-Off Mode
Equities Getting Slammed
- APAC markets took a beating overnight.
- US equity futures are deep in the red:
- S&P 500 (ES): -1.9%
- Nasdaq 100 (NQ): -2.4%
- European futures suggest a weak cash open, with Euro Stoxx 50 futures down 2.3%.
FX & Yields – Dollar Strength Dominates
- The US Dollar Index (DXY) surged, touching 109.88.
- EUR/USD dropped to the 1.02 handle.
- GBP/USD (Cable) slipped below 1.23.
- JPY is holding up better than other currencies but is still weaker against the USD.
Crude & Bonds – Volatility Ahead
- Crude futures jumped at the open as markets digested the tariff news.
- The US 10-year yield pulled back but remains stable above 4.5%.
Key Events to Watch
Markets will be hyper-focused on upcoming macro events today, including:
📌 Eurozone HICP (Inflation Data)
📌 US ISM Manufacturing PMI
📌 Fed’s Senior Loan Officer Opinion Survey (SLOOS)
📌 OPEC+ JMMC Meeting
📌 Fed speakers: Bostic & Musalem
📌 US Treasury Financing Estimates
With tariffs rattling the market, expect heightened volatility, flight-to-safety trades, and potential policy responses from affected nations. Keep a close eye on headlines, as retaliation measures from Mexico and China could bring further market-moving surprises.
IBAFIN 
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