Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
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Morning Brew February 18 2025
Erik Schafhauser
Senior Relationship Manager
Summary: Rheinmetall soars to unprecedented levels and pulls the Dax to records
Good Morning,
Rheinmetall was the stock to watch yesterday, ending the day 14% higher and pulling the DAX to a stunning 22,800.
All eyes remain on politics, where Marco Rubio is meeting a Russian delegation to discuss Ukraine—without Ukrainian or European representatives. It will be interesting to see if there will be any backlash. He also discussed Gaza with Saudi Crown Prince Mohammed bin Salman. In Paris, European leaders indicated a willingness to provide security guarantees to Ukraine.
After the US Holiday, 10-year yields are little moved, trading at 4.50%, and the USD Index is at 106.94. EUR/USD is at 1.0460, GBP/USD 1.2595, USD/JPY 151.95, and the Aussie 0.6355, as the RBA cuts rates as expected with no significant market impact. Gold and silver were fairly calm yesterday and are trading at 2913 and 32.40. Bitcoin is looking for inspiration and is hovering at 95,200.
Headlines:
- The Telegraph reports that the US is demanding huge repayments from Ukraine to the tune of USD 500 billion.
- Samsung announced a share buyback of approximately USD 2 billion.
- Fed's Waller said he expects little inflationary impact from Trump’s tariffs.
- Staff responsible for reviewing Neuralink were fired in the first round of layoffs announced over the weekend.
- Tencent rises on testing Deepseek in app
There is a lot of data today of second-tier importance; they will have an impact with substantial surprises the focus will be on politics and any clear outcomes for Ukraine, Gaza, or tariffs.
European equities have preempted a lot of good news. Let us hope politics can deliver. Trade safely.
- Tuesday Australia Cash Rate, UK Labor data, Sweden, France and Canada CPI,
Earnings Baidu, Toll Brothers, Unisys, - Wednesday: Japan Trade, UK CPI,
Earnings Etsy Wix Garmin, Vale, - Thursday: China Loan Prime Rates, Denmark GDP, US Initial Jobless Claims, Philly Fed, EU Consumer Confidence, AU PMI,
Earnings Alibaba, Wallmart, Rivian, Dropbox, - Friday: Japan CPI, UK Retail Sales, international PMI, University of Michigan Sentiment
Earnings Arbor
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