Trump behaves like the absolute master of a chess game in which he dictates the rules. But one must not forget the famous bishop’s diagonal. Is the king mad, or should we look for the king’s fool? While waiting for an answer, the markets experienced strong declines last night and this morning. And what about Bitcoin?
While waiting for an answer, the master of the game disrupts European markets
In Europe, the consumer confidence index came in at -13.6 in February, as expected, compared to -14.2 in January. But it was mostly Trump’s impact on tariffs that weighed down the markets. The CAC 40 lost 0.51% to 8,102 points, and the Euro Stoxx 50 dropped 1.12% to 5,465 points. The DAX fell 1.2%, while the FTSE 100 gained 0.28%. Ferrari took a hit, losing nearly 8% after Exor, the Agnelli family’s holding company, announced the sale of around 4% of its shares. Meanwhile, in England, Rolls-Royce (a defense-linked stock) soared by 16% after raising its annual targets and announcing a dividend payout.
In Switzerland, the SMI closed down 0.65%. Roche (-0.5%) and Nestlé (-0.6%) weighed on the index. Swiss Re, however, reported strong 2024 results. However, first-quarter 2025 earnings will be impacted by the wildfires in California. As expected from an insurer, premium prices will continue to rise. Swiss Re surprised positively with a higher-than-expected dividend and a smaller-than-anticipated impact from the Los Angeles wildfires. Meanwhile, the Swiss Confederation’s president expressed confidence that Trump’s retaliatory measures against the EU would not affect Switzerland. An interesting certainty in a completely unstable world where the U.S. Secretary of Health may take decisions that could impact Swiss pharmaceutical exports to the U.S., which account for 40% of total export value.
In the European bond market, a slight easing is underway, with French OATs down 1.5 basis points to 3.14% and German Bunds down 2.5 basis points to 2.415%. Across the Channel, Gilts remain stable at around 4.564%.
In the United States
Economic figures in the U.S. continue to follow a familiar pattern. Jobless claims increased more than expected last week, while another report reaffirmed that economic growth slowed in the fourth quarter. Today, new data on personal consumption expenditures will be released. The U.S. yield curve inversion deepened on Thursday, with three-month Treasuries (4.33%) yielding more than ten-year bonds (4.27%).
The Dollar Index, which measures the greenback against a basket of currencies, rose by 0.72% to 107.23, marking its biggest daily gain since December 18. The euro fell 0.74%, heading for its sharpest drop since January 2, trading at $1.0405. The Canadian dollar weakened by 0.69% against the U.S. dollar to 1.44 CAD, while the Mexican peso lost 0.12%, reaching 20.464 per U.S. dollar.
Spot gold fell 0.1% to $2,874.69 per ounce, down 2% for the week so far. Silver rose 0.4% to $31.37 per ounce, platinum firmed by 0.3% to $951.95, and palladium gained 0.1% to $920.34.
Commodities, except oil, are also suffering
Brent crude futures rose by $1.43, or 2%, to $73.90 per barrel. WTI crude futures increased by $1.46, or 2.1%, to $70.08 per barrel.
Three-month copper on the London Metal Exchange (LME) edged down 0.1% and was down 1.9% for the week. Among other metals, LME aluminum rose 0.08%, tin gained 0.2%, LME zinc fell 0.2%, nickel dropped 0.6%, and lead declined by 0.2%.
Corn fell by 12-1/2 cents to $4.81 per bushel after hitting its lowest level since February 3. Wheat lost 16-3/4 cents to $5.63 per bushel, marking its lowest point since February 4. Soybeans dropped 4 cents to $10.37-1/4 per bushel.
And Trump continues playing chess…
On Thursday, Donald Trump told Keir Starmer that a minerals agreement was the only security guarantee Ukraine needed against Russia. He also pretended not to remember calling Ukrainian President Volodymyr Zelensky a “dictator” last week. Thus, the U.S. position remains unchanged: no discussion of peacekeeping forces before an agreement is signed between Russia and Ukraine. And just like that, Trump keeps the upper hand…
This morning in Asia
Japan’s Nikkei dropped 2.4% at the start of trading, while South Korea’s Kospi lost 1.8%, and Australia’s benchmark index slipped 0.9%. Chinese stocks performed relatively better, with the Hang Seng down 1% and the CSI 300 falling 0.3%.
Bitcoin was last down over 5% on the day, trading at $79,666—falling below $80,000 for the first time since November 11. Ether followed the trend, dropping nearly 6% to $2,149.38, hovering around its lowest level since January 2024.
