Crude on the rise, as markets await inflation report

• Mixed trade in Europe despite sharp declines in Asian.

• FTSE 100 well positioned despite steel tariffs.

• Crude on the rise, as markets await inflation report.

European trade has kicked off on a relatively indecisive tone, with tariff fears casting a shadow over the bulls for the time being. Trump’s promise that he will apply reciprocal tariffs today brings a high degree of uncertainty that has sparked sharp declines for the likes of the Hang Seng, Nifty, and ASX200. India is a particularly interesting case, with the country’s relatively high import tariffs (14%) put them in the firing line when Trump imposes new action around midday Eastern time. The dominant areas that will be in focus are South America (Argentina, Brazil, and Mexico) and Asia (India, Korea, China, and Indonesia), with tariffs rates relatively elevated in those particular nations. 

For the UK, the imposition of tariffs on steel imports does pose a problem for Starmer & Reeves, with the PM thus far indicating that they seek to engage in discussions rather than instigate a trade war with this key trade partner. It is early doors, but the relatively balanced trade relationship and friendly approach to negotiations has helped position the FTSE 100 as a relatively safe bet for traders and investors.

Crude oil is on the rise once again today, as energy markets turn higher following a period of weakness that has dominated since Trump took office. Coming ahead of tomorrow’s US CPI report, there is a hope that we will see those recent oil & gas declines drive monthly inflation lower after a concerning 0.4% figure last month. However, the faltering Gaza peace process, coupled with falling Russian output and fresh sanctions on Iranian crude provide renewed tightness in the face of demand concerns. On the flip-side, the prospect of a tariff-led slowdown in global growth rates does provide the basis for a weaker demand outlook for crude, highlighting the potential volatility once Trump announces his latest measures today.