Tariffs
Thursday's sharp pullback in the COMEX copper price from an all-time high underscores a key risk to the red metal's resilience. An eventual resolution of US copper tariff uncertainty would likely trigger a price relapse. That drawdown, however, would offer an attractive opportunity to increase structural exposure to the metal.
As long as the AI boom keeps booming, all other investment considerations will remain on the back burner. However, if the AI trade fizzles, this would expose deep-seated problems within the global economy, which could very well lead to an economic downturn as early as next year.
Policy risks are set to fade just as markets underestimate hawkish Fed repricing and crowd into short-USD positions, setting the stage for a tactical dollar rebound into the election cycle. Go long USD/CHF to capture the rate differential and receding policy uncertainty.
This report examines the implications for Chinese exports and global trade in light of the US Supreme Court’s ruling on tariffs.
Trump is saving face with new tariffs but will avoid any major new tariff shock until 2027. For now, Iran risk will overshadow tariff volatility.
Core inflation will get close to the Fed’s 2% target by the end of this year.