Global stock markets showed resilience on Monday, shrugging off concerns about tariffs as new trade measures came into play. Late Monday night, 25% levies on imports of steel and aluminum were enacted, sparking reactions across international markets. Despite these developments, the S&P 500 and Eurostoxx 50 indices are anticipated to open lower today, reflecting a cautious approach from investors.
In Central and Eastern Europe (CEE), economic progress has been notable over the past two decades. Czechia and Slovenia have successfully narrowed their economic gap by 10 percentage points. Other CEE countries have made even more significant strides, reducing the disparity by at least 20 percentage points. Remarkably, in 2023, GDP per inhabitant measured in Purchasing Power Standards (PPS) increased across all CEE nations except Poland. Simultaneously, CEE currencies have gained strength against the euro, reaching levels not seen in years.
Currency markets have also been active. The GBP/USD pair clung to recovery gains near 1.2450 during the European session on Wednesday. This movement comes amid revived demand for the dollar following hawkish remarks from Federal Reserve Chair Jerome Powell. His comments underscored that the US central bank is not rushing to adjust interest rates, providing a boost to the dollar. Additionally, the EUR/USD pair remained steady above 1.0350 in European trading hours, signaling stability despite global uncertainties.
Political developments in Romania added another layer of complexity. The Romanian Court ruled that the vacancy in the presidential office justifies the temporary assumption of presidential duties by Bolojan. This decision comes amid broader geopolitical tensions and economic adjustments within the region.
President Donald Trump's plans for reciprocal tariffs continue to underpin the US dollar, maintaining its strength against global currencies. Meanwhile, long-term yields in the bond market reversed course, increasing on Tuesday. This shift reflects changing investor sentiment influenced by ongoing trade policies and economic forecasts.
The European Union has expressed its intent to respond to the US-imposed 25% tariffs on steel and aluminum imports. As these trade dynamics unfold, market participants remain vigilant about potential retaliatory measures and their implications for global trade relations.