UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Better German growth'
May 23, 2025
Tensions rise as President Trump's tax threats on EU products add to market uncertainty. Recently released data reveals a stronger German economy than initially believed, shifting investor sentiment. The podcast also highlights the robust resilience of the retail sector, overcoming weather disruptions and holiday timing challenges. Additionally, a pivotal Supreme Court ruling supports the independence of the US Federal Reserve, underscoring its vital role in ensuring global economic stability.
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Trump's Tariff Threats and Uncertainty
- US President Trump's threats to increase taxes on EU-made goods are often followed by retreats.
- Markets usually discount these threats but policy uncertainty remains high in the US.
US Firms' Pricing Shapes EU Impact
- US manufacturers' pricing responses determine Europe's trade dispute impact.
- If US firms prioritize profit over market share, Europe's real economy faces less damage.
Pessimistic Bias in German Data
- German economic data tends to be initially pessimistic.
- The economy usually performs better than first reported, affecting investor sentiment.