UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Of mountains and molehills'
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May 9, 2025 The discussion kicks off with a critical look at the recent Anglo-US trade framework, revealing it as more hype than substance. Next, it highlights the mixed fortunes of US and UK exporters amid shifting conditions. It emphasizes the importance of the Bank of England's recent rate cut, influencing market reactions and economic sentiments. Finally, there’s an analysis of central bank officials' impact on market trends and a looming slowdown in China's export growth, signaling potential shifts in U.S. supply chains.
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Minimal Impact of Trade Framework
- The Anglo-US trade framework showed minimal real change despite extensive media spin.
- It ultimately leaves US consumers worse off than January but better than the prior week.
Trump's Import Tax Stance and Impact
- President Trump signaled that the 10% import tax on US consumers is here to stay.
- This policy risks lowering US living standards by treating imports as a negative.
Trade Policy Risks Lower Living Standards
- Trump's belief that all imports are negative sets the stage for weakening US consumer living standards.
- This approach will disrupt trade frameworks and trade relations going forward.