January 21, 2025
United States:
US Bonds Rise as Tariff Respite for China Eases Inflation Fears
Treasuries rallied as fears that Donald Trump’s policies will fuel inflation eased, after the US president refrained from imposing China-specific tariffs for now.
The 10-year US yield fell as much as 10 basis points to 4.53% on Tuesday, as the market reopened after a US holiday.
Europe:
ECB’s Villeroy Says It’s Plausible to Cut at Each Meeting
It’s possible that the European Central Bank will lower interest rates at each of its upcoming meetings, according to Governing Council member Francois Villeroy de Galhau.
Officials’ task of bringing inflation back to 2% is on track, despite President Donald Trump’s threats of trade tariffs, the Bank of France chief told Bloomberg Television in Davos. That may allow the deposit rate to be lowered to 2% by summer from 3% now, he said.
Asia:
Yen Outperforms G-10 Peers as Traders Look Past Trump to BOJ
The yen was alone among Group-of-10 currencies in rising against the dollar on Tuesday as traders wagered that Donald Trump’s first salvo on tariffs won’t stop a potential interest rate hike from the Bank of Japan on Friday.
The Japanese currency appreciated as much 0.5% to 154.78 against the dollar, its strongest level since Dec. 19, despite broad gains in the greenback after the US president said he plans to enact tariffs of as much as 25% on Mexico and Canada in February.
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