Global Markets Overview is published and updated every month. This includes what has happened in markets, our macroeconomic outlook and price updates on assets such as government bonds, credit and equities.
In this Global Markets Overview
The top highlights from our latest Global Market Overview.
President Trump has issued a flurry of executive orders spanning different areas:
- Trade – the US ordered an additional 10% tariff on all U.S. imports from China, with China retaliating. The US also initially set additional 25% tariffs on Mexico, 25% on non-energy products from Canada, and 10% on Canadian oil and energy, which have since been suspended. The likelihood of trade tariffs against the EU was also emphasised by President Trump.
- Immigration – new policies indicate a significant shift in immigration policy, emphasising stricter enforcement and reducing legal entry pathways, e.g., a national border emergency was declared.
- Regulation – the new orders mark a shift away from promoting electric vehicles and renewable energy, alongside an attempt to boost U.S. oil and gas production. Separately, there was a focus on “Strengthening American Leadership in Digital Financial Technology.”
Our assessment of the economic impact of the active tariff policies:
- The 10% tariff on Chinese goods by the U.S. is below the 20% tariff we had assumed in our baseline economic outlook for 2025, while we had also incorporated a measured retaliatory response from China. Consequently, currently, trade policies have been a positive moderate surprise relative to our forecasts, although it is possible to likely that further additional tariffs are announced on China.
- Particularly, if the 25% tariffs against Mexico and Canada and other possible policies are not enacted, our end-2025 forecast for annual US core inflation of c. 2.5% would be lower by 0.2%.
Despite pockets of volatility, overall, moves in financial markets have been relatively limited:
- 10-year U.S. government bond yields are slightly below where they stood before January 20. Global equity prices have risen slightly. Looking at the currencies of the countries at the centre of the recent trade policy announcements, the U.S. dollar is roughly flat against the Chinese Yuan, the Mexican peso, and Canadian dollar.
- This suggests that the overall trajectory of U.S. policy, so far, has been broadly in line with preinauguration market expectations – and our forecasts – with no big surprises.
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David is the Global Head of Asset Research at WTW, responsible for economic and capital market research. He also is a member of the Investment Assumptions Committee, who help guide investment policy globally.
