Macro Minutes
A Little Less Tarrified
May 1, 2025
Elsa Lignos, Head of FX Strategy at RBC Capital Markets, and Blake Gwinn, Head of US Rates Strategy, dive into the complexities of the U.S.-China trade war and its ripple effects on the dollar and equity markets. They discuss evolving corporate earnings amidst tariffs and the sentiment shifts in the investor community. The pair also tackle the latest Treasury refunding announcements and the uncertain debt limit timeline, shedding light on these essential topics for market watchers.
24:20
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Quick takeaways
- The sentiment around the U.S.-China trade war is shifting towards cautious optimism, indicating a potential recovery in market confidence.
- Investor positioning on the U.S. dollar has transitioned to a net short stance, reflecting evolving expectations and divided sentiment on economic strength.
Deep dives
Optimism in Trade Relations
Current sentiment regarding the U.S.-China trade war has shifted towards increased optimism, as many believe that the worst may be behind us. In discussions with various investors and public sector officials, there is a consensus that the U.S. administration is eager to reach a deal, despite acknowledging that fine details will require time to negotiate. While some remain skeptical about potential resolutions, the prevailing mood is one of cautious hope, signifying a possible improvement in relations moving forward. This change in outlook reflects a more favorable view of trade negotiations, suggesting a gradual recovery in market confidence.
