Just as all politics is local so all news is financial.
Or something.
From Reuters, January 18:
Markets on edge as Trump threatens more tariffs on Europe over Greenland
U.S. President Donald Trump has promised to implement further tariffs on imports of goods from some European countries until the U.S. is allowed to acquire Greenland, a move that could send a jolt through financial markets when they reopen on Monday.In a post on Truth Social, Trump said additional 10% import tariffs would take effect on February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain — all already subject to tariffs imposed by Trump.Major EU states on Sunday decried the tariff threats against European allies as blackmail, as France proposed responding with a range of previously untested economic countermeasures.GEORGE SARAVELOS, GLOBAL HEAD OF FX RESEARCH, DEUTSCHE BANK, LONDON:"We are not so sure the impact on the euro will be as negative as is commonly assumed."European countries own $8 trillion of U.S. bonds and equities, almost twice as much as the rest of the world combined."With dollar exposure still very elevated across Europe, developments over the last few days have potential to further encourage dollar rebalancing."HOLGER SCHMIEDING, CHIEF ECONOMIST, BERENBERG, LONDON:"For Europe, this is a bad geopolitical headache and a moderately significant economic problem. But it could also backfire for Trump, who faces resistance from senior Republicans in the U.S."Logic still points to an outcome that respects Greenland's right to self-determination, strengthens security in the Arctic for NATO as a whole, and largely avoids economic damage for Europe and the U.S."TONY SYCAMORE, MARKET ANALYST, IG, SYDNEY:"Markets at this point are expected to reopen this week in 'risk-off' mode."This latest flashpoint has heightened concerns over a potential unravelling of NATO alliances and the disruption of last year’s trade agreements with several European nations, driving risk-off sentiment in stocks and boosting safe-haven demand for gold and silver."CARSTEN NICKEL, DEPUTY DIRECTOR OF RESEARCH, TENEO, LONDON:"The most likely way forward is a return to the trade war that was put on hold in high-level U.S. agreements with the UK and the EU in summer."The immediate takeaway is that deals with the U.S. administration hardly provide certainty over the longer term. This risk was already evident from the fact that the summer agreements left many technical questions unanswered."The key question to watch is whether the EU will try to keep the confrontation confined to such a more “classic” trade war, or whether calls for a harsher line prevail."NEIL SHEARING, GROUP CHIEF ECONOMIST, CAPITAL ECONOMICS, LONDON:"At face value, the tariffs would shave a few tenths of a percentage point off GDP in the affected economies while adding a similar amount to U.S. inflation."The political and geopolitical consequences would be much greater....
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