Weekly Espresso

Last week kicked off with the UK and the EU reaching a new agreement on post-Brexit relations. The deal will add an estimated extra £9bn to the UK economy.

According to Nick Thomas-Symonds, the UK’s chief negotiator. it marks “a new chapter in our relationship with the EU.” The major parts of the deal include:

US stocks posted strong gains last week following the news that the US and China had agreed to lower tariffs and put a 90-day pause on their trade war. The agreement means US tariffs on Chinese goods will come down from 145% to 30%, and China’s levies on US imports will go down from 125% to 30% while further negotiations take place. Saudi Arabia’s Crown Prince Mohammed bin Salman also pledged to invest $600bn in the US. Details of most of the specific commitments are vague, but $142bn is set aside for arms, $20bn for AI data centres and $14.2bn for energy equipment and gas turbines. This news, combined with the tariff pause, has seen most American markets recover from their “Liberation Day” induced losses.

But it wasn’t all good news…

Late on Wednesday evening, Trump took to Truth Social to tease the news of a “trade deal” between the US and a “big and highly respected country.” By the time he kicked off his press conference at 10am, we knew the country in question was the UK.

With Congress needed to approve any major trade deal, the announcement is more of an agreement to reserve or cut some of the tariffs that Trump has imposed on certain goods.

Celebrating the first 100 days of a US president’s term became significant during FDR’s first term and the major reforms he announced during the Great Depression. Trump marked his 100th day in office on Tuesday with a campaign style speech in Michigan telling the crowd “We’ve just gotten started, you haven’t seen anything yet.” In the markets so far in his second term, the S&P is down nearly 7%, and the dollar has posted its worst performance since November 2022, contracting by -4.6%.

On Tuesday the International Monetary Fund (IMF) published the latest edition of its World Economic Outlook. The IMF said Trump’s tariffs have been a “major negative shock” to the world economy as they slashed their forecasts for growth around the world.

On Wednesday, the Nasdaq fell 3.1% following the news that Nvidia will require licences to export its popular H20 AI chip to China. US officials advised the firm that the licence requirement will “be in effect for the indefinite future.” Nvidia shares tumbled nearly 7% on the day and have fallen further over the Easter weekend.