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US–Europe tariff fight deepens, safe havens rally

Escalating trade tensions between the US and Europe dominated markets at the start of the week, with US President Donald Trump threatening steep new tariffs on French wines and broader duties on several European NATO allies as part of his push to secure control over Greenland. European equities dropped sharply on Monday, led by trade-sensitive sectors such as autos, technology and luxury goods, while safe-haven assets benefited, with gold setting another record high and the Swiss franc strengthening against major currencies as investors reduced exposure to riskier assets. In Asia on Tuesday, stocks were trading lower and Japanese long-dated bond yields rose sharply. US markets were closed on Monday for a holiday.

Data 20 gennaio 2026
Autore Shane Strowmatt, Senior Investment Writer
Tempo di lettura 5 minuto

US President Donald Trump threatened on Tuesday to impose tariffs of 200% on French wines and champagne after reports that French President Emmanuel Macron intends to decline a seat on Trump’s new “Board of Peace” for Gaza, a UN-backed body overseeing the Israel-Hamas ceasefire. Trump said in comments to reporters in Miami that such tariffs would pressure Macron to join the board, although he added that the French leader did not have to participate. European governments are considering retaliatory tariffs and wider economic countermeasures, following Trump’s separate threat on Saturday to levy duties of up to 25% on eight European countries, including the UK, until the US secures control over Greenland. Gold climbed to a another record and was trading around USD 4710 per ounce on Tuesday, while silver briefly reached an all-time high above USD 94 per ounce. The Swiss franc continued to appreciate as investors to shift away from the US dollar and other riskier assets. The currency rose around 0.7% against the dollar on Monday, reached a two-month high versus the euro and traded close to a record against the yen, reinforcing its status as a preferred safe-haven.

China holds rates despite slowing growth

China’s central bank left its one-year and five-year loan prime rates unchanged at 3% and 3.5% on Tuesday, keeping them steady for an eighth month even as economic momentum weakens. The world’s second-largest economy expanded by 4.5% year on year in the final quarter, the slowest pace since the end of strict Covid measures in late 2022, while nominal GDP growth stayed below 4% for a third year and the GDP deflator remained negative for an 11th straight quarter, highlighting persistent deflationary pressure. Retail sales growth eased to a three-year low of 0.9% in December as a prolonged property downturn, soft labour market and weak confidence weighed on households, prompting Beijing to rely on targeted tools such as cheaper relending facilities, new programmes for private and tech firms and lower mortgage down-payments instead of broad rate cuts. Officials signalled there is still room to reduce reserve requirements and policy rates later this year, while pointing to a firmer yuan and stabilising bank margins as creating space for further easing, even as manufacturing and exports held up with industrial output rising 5.9% and exports 5.5% in 2025. Chinese markets were trading in negative territory on Tuesday, in line with broader negative sentiment in Asia-Pacific markets. Mainland China’s CSI 300 was down 0.5%, while Hong Kong’s Hang Seng Index was trading 0.3% weaker.

Japanese long-dated yields hit record

Japan’s 40-year government bond yield climbed more than five basis points to a record 4% on Tuesday as investors sold off government debt amid concerns that planned cuts to the food sales tax could weaken public finances. Yields rose across the curve, with the ten-year bond yield reaching about 2.3%, its highest level since 1999, and the 20-year yield increasing to around 3.35%, after Prime Minister Sanae Takaichi announced on Monday that she will dissolve parliament on Friday and call a snap election for early February. Ultra-long Japanese government bond yields are being driven higher by supply-demand imbalances and a repricing of term and risk premia as markets factor in more expansionary fiscal policy and persistent inflation, reviving the so-called “Takaichi trade” of stronger equities, weaker bonds and a softer yen. Japan’s Nikkei 225 followed broader sentiment in the region and was trading down 1% on Tuesday, while Korea’s Kospi was 0.4% lower and Australia’s S&P/ASX 200 slipped 0.7%.

European stocks fall on new US tariff threats

Major European equity indices ended sharply lower on Monday after US President Trump threatened new import tariffs on several NATO allies in a dispute over the sale of Greenland. The EuroStoxx 50 dropped 1.7% to 5925.82 points, falling clearly below the 6000-point mark it had exceeded last week, while the Swiss SMI lost 1%. Trump’s plan to impose punitive tariffs of initially 10% and later 25% on imports from eight European countries hit auto, technology and luxury stocks particularly hard, with sector indices and shares such as Stellantis, Renault, Kering, Richemont, Hermes and LVMH under pressure. While an EU emergency summit is being prepared to formulate a response amid concerns about escalation and Europe’s economic vulnerability, it is worth nothing that Trump has previously withdrawn similar threats and could seek a stable stock market ahead of the US midterm elections in November.

Canadian inflation edges up but core eases

Consumer price inflation in Canada accelerated to 2.4% year-on-year in December from 2.2% in November, mainly due to a base effect from a temporary sales tax break a year earlier, while prices fell 0.2% on the month. The Bank of Canada’s preferred core measures, CPI-median and CPI-trim, slowed for a third consecutive month to 2.5% and 2.7%, respectively, their lowest levels in about a year, supporting expectations that policymakers will keep the policy rate unchanged through 2026.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Netflix.

Economic data in focus: German Producer Price Index (08:00), UK unemployment rate (08:00), Swiss Producer Price Index (08:30), German ZEW Indicator of Economic Sentiment (11:00) and Swiss National Bank Chairman Martin Schlegel speaks (17:30).

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