US President Donald Trump has threatened key trading partners, including the European Union, with significant tariffs. This development comes as the European Central Bank (ECB) prepares to proceed with interest rate cuts on January 30, 2025, signaling confidence in controlling inflation.
The ECB previously raised borrowing costs aggressively from mid-2022 to address surging energy and food prices. However, with inflation rates slowing and the eurozone economy appearing weak, the central bank is now poised to reduce rates further.
Economic indicators are on the horizon, including GDP data for the EU, France, Germany, and Italy, as well as unemployment rates and consumer surveys. European stock futures showed a positive trend ahead of the ECB's decision, while Asian markets experienced mixed results due to the Lunar New Year holiday.
In the United States, stock markets reacted negatively to the Federal Reserve's pause in interest rate cuts, raising concerns about persistent inflation. The Fed's recent statement highlighted a solid labor market and elevated inflation levels.
In energy markets, oil prices declined following an increase in U.S. crude stocks, influenced by Trump's plans to boost domestic oil production. Meanwhile, gold prices increased as investors reacted to the Fed's decision to maintain interest rates.
In a related geopolitical context, Israeli authorities announced they would cease cooperation with the United Nations agency responsible for Palestinian refugees, which could disrupt aid to Gaza. Additionally, Syrian rebel leader Ahmed al-Sharaa has declared himself president, disbanding armed groups and the national army, signaling a significant shift in the region.