Macro Minutes

It is a unique time for economies and financial markets - political decisions are increasingly driving economic outcomes and asset markets rather than the other way around. Today's episode unpacks what it means for US & Canada and the implications for equity markets. Participants:Jason Daw (Desk Strategy), Head of North America Rates StrategyBlake Gwinn (Desk Strategy), Head of US Rates Strategy Lori Calvasina (Research), Head of U.S. Equity Strategy* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

Today is 11-April-2025 and my name is Peter Schaffrik. We have labelled this edition ‘Chaos Theory’ and I trust most listeners do not need and explanation as to what inspired us. Market swings have been very large on the back of the back and forth in the tariffs culminating in a 90 day pause being announced this week. Helping us to bring some order into the chaos, I am joined by Blake Gwinn, RBC’s head of US rates strategy and Elsa Lignos, Head of FX strategy. Participants:Peter Schaffrik (Desk Strategy), Head of UK/European Rates & EconomicsBlake Gwinn (Desk Strategy), Head of US Rates StrategyElsa Lignos (Desk Strategy), Head of FX Strategy* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

A twin resurgence is reshaping European financial markets. Bank equities and AT1 bonds are both surging—can the momentum last?Participants:Janet Wilkinson (Desk Strategy), Head of Global Markets Flow Sales, EMEAAnke Reingen (Desk Strategy), Global Co-Head of Financials ResearchMarc Sanchez Roger (Desk Strategy), Head of European Financials Credit Sector* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

Explore how Trump's policies are reshaping global defense. Experts from RBC Capital Markets analyze the economic and strategic shifts in UK, European, and US defense spending.Participants:Janet Wilkinson (Desk Strategy), Head of Global Markets Flow Sales, EMEAPeter Schaffrik (Desk Strategy), Chief European Macro StrategistKen Herbert (Research), Senior Aerospace and Defense Analyst* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

The butterfly effect is where a change in a complex system can have large effects elsewhere. Indeed, US trade policies are having significant intended and unintended consequences for various countries that is impacting fiscal policy and politics and potentially and monetary policy and the bond market.Participants:Jason Daw(Desk Strategy), Head of North America Rates StrategyPeter Schaffrik (Desk Strategy), Head of UK/European Rates & EconomicsSu-Lin Ong (Research), Chief Australia Economist* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

The signals are mixed, but the outlook for the U.K economy is uncertain at best, while geopolitical risks add further potential volatility. So why is the U.K. banking sector looking forward to another strong year?Participants:Janet Wilkinson Head of Global Markets Flow Sales EMEAKofi Oteng Head of Flow Rate Sales EMEA Benjamin Toms Director European Banks Equity Research* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

In this discussion, Blake Gwinn, Head of US Rates Strategy at RBC Capital Markets, and Peter Schaffrik, Head of UK/European Rates & Economics at RBC Capital Markets, dive into pressing economic shifts. They tackle the lingering uncertainties of tariffs and their influence on markets in the U.S., Canada, and Europe. The duo also examines the implications of the recent German elections on fiscal policy and coalition dynamics. With bond market weakness under scrutiny, they ponder the future of asset swaps and the regulatory landscape.

Blake Gwinn, Head of US Rates Strategy at RBC Capital Markets, shares his expertise on the implications of recent US tariffs on Canada, Mexico, and China. The discussion highlights the Fed's cautious stance on monetary policy amidst inflation concerns and economic uncertainties. Gwinn delves into the currency fluctuations resulting from tariffs and the corresponding responses from central banks like the BoC and ECB. The conversation also touches on the delicate balance central bankers must maintain between tackling inflation and fostering economic growth.

The biggest known unknown for economies and financial markets is what will happen with tariffs – are they just being threatened as a bargaining chip for transactional purposes, if they come to fruition what will their breadth, size, and duration be, and will trading partners retaliate. Unfortunately for investors, the matrix of possibilities is endless, and each has a low probability chance. In this edition our asset class experts provide answers to the difficult questions.Participants:Jason Daw (Desk Strategy), Head of North America Rates Strategy Elsa Lignos (Desk Strategy), Head of FX Strategy Lori Calvasina (Research), Head of U.S. Equity Strategy* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

Will Trump’s bite match his bark on tariffs? If it does, the economic damage could be severe but central bank responses are not clear cut in the short term. While Trump policy is the primary risk factor, there are many other question marks – Is the Fed finished the easing cycle? What happens with Canada politics? Will the ongoing rout in global bond markets continue? Is the USD destined to remain strong? – that are important for asset markets in 2025.Participants:Blake Gwinn (Desk Strategy), Head of US Rates Strategy Jason Daw (Desk Strategy), Head of North America Rates Strategy Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics Elsa Lignos (Desk Strategy), Head of FX Strategy * Research Analyst opinions are their published views, independent of those expressed by Desk Analysts