Trump tariffs spark market jitters....again | FX Research

Asian markets have shown mixed performance on this Monday. Treasury Secretary Bessant announced plans to relax the supplementary leverage ratio this summer, potentially lowering government borrowing costs by enabling banks to trade more treasuries, while dismissing concerns about rising US bond yields.

However, US fiscal challenges persist with deficits over 6% of GDP and a 120% debt-to-GDP ratio—historically stabilised only by high inflation or asset bubbles—raising doubts about sustainable debt reduction without fiscal reform. President Trump's recent moves, including a 50% tariff on European goods, a 25% levy on foreign smartphones, and the blocking of international students at Harvard, continue to fuel market uncertainty, amplified by US and UK market closures for public holidays.

Key US data this week includes the FOMC minutes, GDP estimates, and the core PCE price index.

Exclusive FX research from LMAX Group Market Strategist, Joel Kruger