Following weeks of volatility since Trump’s return to the White House, it will come as no surprise that it was once again the Trump administration that took centre stage during what was perhaps the most volatile week yet. It feels like a long time since I’ve said this, but the biggest winner this week has to be the euro, with the shared currency hitting July 2023 highs against the USD and January 2024 highs against the pound.

Data-wise, there wasn’t a lot released this week, but the few bits that did come out were significant. We had to wait until Thursday for the first major release, which came in the form of US CPI. Forecasts anticipated a drop y/y from the previous reading of 2.8% down to 2.5%; however, final figures came in at 2.4%. Although only marginally below forecast, the result raised expectations for Fed interest rate cuts throughout the year.

The other major talking point this week was the UK GDP. Forecasts had anticipated a return to growth following a flat figure last time out—albeit only marginally, up to 0.1%. In the end, the UK economy outperformed expectations, coming in at 0.5%. It was an impressive jump compared to recent figures, but certainly nothing to celebrate just yet. Later today, US Consumer Sentiment will be released, which—given everything going on at the moment—will be particularly closely monitored.

The real market mover of the week, though, has, of course, been the trade war between the US and seemingly the rest of the world. China has taken the brunt of the hit with, as it stands today, 145% tariffs on exports to the US. In response, China has implemented a 125% tariff on US goods. It remains to be seen when this tit-for-tat tariff war will end. There was a sigh of relief for much of the world, though, as a 90-day pause on most countries’ tariffs will be implemented—mostly in reaction to the market capitulation, with stocks plummeting pretty much across the board.

As we look to next week, it will, of course, be Trump once again who will likely have the biggest impact on the markets, with negotiations involving 90 countries expected to begin in response to the tariffs. Outside of that, a highly contested ECB interest rate decision coupled with US retail sales data should ensure another chaotic week for the markets.