EU leaders seek united response to Donald Trump’s tariffs
We at The Week Ahead like to deal in the certainties of the diarised items you need to be aware of, which makes the coming days somewhat difficult as markets wait on the counter measures to the US president’s tariffs.
EU trade ministers will gather on Monday and the focal point will be the response to Donald Trump, perhaps offering some signals on whether the EU is willing to escalate tensions with digital services taxes, or whether long-standing internal tensions end up watering down its response. However, Brussels also needs to defend itself from Asian imports seeking new markets other than the US thanks to Trump’s high tariffs on China, Japan and other nations in the region. Read the FT explainer, including this verdict from ING’s global head of macro Carsten Brzeski, written in a note to clients: “Europe’s worst economic nightmare just came true.”
In the UK, Sir Keir Starmer’s government is still seeking a trade deal with the Trump administration. Good luck with that. On Tuesday MPs will get a chance to grill the prime minister on this (and other matters relating to the British economy) as he answers questions set by members of the House of Commons liaison committee.
Sticking with Britain, Monday will see the opening of London’s newest river crossing, the £2.2bn Silvertown Tunnel. Cue a barrage of complaints about making this, and its older neighbour, the Blackwall Tunnel, into toll roads. My colleagues Gill Plimmer and Jim Pickard explain why this divisive project could be the start of a revival in the private finance initiative system of funding big capital schemes across the UK.
The political week ends with Ecuador’s presidential election run-off. The contest between incumbent Daniel Noboa and leftist former congresswoman Luisa González, is being held after no candidate received more than the 50 per cent needed to win outright in the first round of voting in February. If González, a former lawmaker and protégé of ex-president Rafael Correa, were to win she would be the first woman to lead the South American country.
It’s quality rather than quantity with corporate results this week. The Wall Street banks begin their quarterly earnings calls this Friday, led by JPMorgan Chase, Morgan Stanley, BNY and Wells Fargo, with their traders expected to record their best quarter in more than a decade thanks to the Trump-fuelled market furore. This is just as well given the poor performance of the investment banking arms in recent months with M&A deals hampered by the market uncertainty.
In the UK, Shell is likely to be one of the most watched as it chases its US rivals in the market capitalisation stakes, as explained in this FT piece. Tesco, among the retailers braced for a difficult 2025 as Britain’s employment tax rises and cost of living pressures bite, will also draw attention. Its success, or not, in the past few months may indicate how consumer spending is holding up.
The central banks, and their senior staff, have a lot in their schedules this week with the Federal Open Market Committee publishing the minutes of its most recent rate-setting meeting, the Bundesbank putting out its monthly report, an expected further 25 basis point rate cut expected from the Reserve Bank of India, and plenty of central bank governor speeches.
It’s a busy week too for significant economic reports, with the US, Japan, Germany and China publishing inflation rate updates, a UK monthly GDP estimate, German industrial production and trade data, and the Bank of Canada’s first quarter business outlook survey. More details below.
One more thing . . .