The news of a month of delay for the tariffs targeting Mexico landed soon after the US opening bell and similar news about Canada came in later in the day. As such, by the end of Monday, both Mexico and Canada managed to talk and agree with Trump to delay the start date for 25% tariffs by a month by sending 10’000 troops to their respective US borders. The saga will continue in a month.

On the European front, nothing more than increased threats and mounting tensions among politicians. Polish PM Donald Tusk called the prospect of a trade war ‘unnecessary and stupid’, the Stoxx 600 recovered most of losses but appetite remains limited. There is one bright spot in Europe however and it’s the Brexited Britain - that could finally benefit from the costy Brexit decision by avoiding a trade war between the EU and the US. Look at sterling shining like a new penny against the euro...

On the Chinese front, Xi and Trump are set to discuss the 10% tariffs this week, but China isn’t waiting to strike back. Beijing has already announced retaliatory measures, including an antitrust probe into Google and a 15% tariff on U.S. coal and LNG imports.

The markets recovered from early losses but futures are in the negative. The US yields were stable on Monday, the 10-year yield fell and rapidly recovered as the US Treasury pulled its estimate for current quarter borrowing lower. The US dollar gave back most of early session gains and the dollar index closed the session lower than where it started. The peso, the Canadian dollar and the euro jumped. Gains in the EURUSD were also backed by a stronger-than-expected CPI reading printed in the eurozone yesterday, that showed that the core inflation on annual basis didn’t ease in January, while both core and headline figures printed negative numbers on a monthly basis. The euro is under a decent selling pressure again this morning.

Anger against the Trump / Musk duo grows by the day. Canadian fans in Ottawa and Toronto loudly booed the American national anthem at NHL and NBA games. Social media exploded with calls to boycott US products, and some Canadians are reportedly looking to sell their winter homes in Florida. More importantly, Canada promised to hit back in ways that could cripple the US car industry, leading to major job losses. Ontario has also threatened to cancel its contract with Starlink.

Inside the US, Tesla sales plunged by around 12% in California last year and annual registration for Model 3 sedan dropped by a third. Outside the US, Tesla sold a little more than 1100 cars in France in January – its second biggest EV market in Europe and could expect to do worse if Musk continues to support far-right candidates in critical elections. You see, a typical Tesla buyer is not necessarily a far-right voter.

Anyway, Tesla was down 5% yesterday. Beyond Musk and his political ambitions, Tesla relies on Canadian suppliers for key auto components, including aluminum, steel, and batteries, and its new Gigafactory in Nuevo León is expected to produce next-gen EVs. If nothing, Trump’s trade policies are a mathematical disaster for the company. As such, buying Tesla shares for Musk will certainly prove to be an unprofitable trade.

Let’s talk about something else, please...

Alphabet is due today after the bell and expectations are strong, with a 12% revenue increase expected and a jump in earnings per share from $1.64 to $2.12 a share. Google Cloud on the other hand is projected to have grown around 32%. But investors are skeptical about any slowdown in growth as they are facing massive AI investments. A company like Google is in the perfect spot to benefit from AI investments given that they have access to a huge amount of data. But investors want to see the AI investments bear fruit to digest a pledge for more investment – especially after DeepSeek awakened the idea of doing things for cheaper price last week. Consequently, the earnings need to be good to counter 1. the AI worries and 2. Trump worries.

AMD is also due to report after earnings today, their cheaper chips could be an alternative to Nvidia’s expensive chips for companies willing to buy performant chips at a lower price. AMD has so far been unable to convince investors to come back despite a more than 60% discount to the share price from last year’s peak levels.

On the economic calendar, the monthly avalanche of US jobs data begins today with job openings data. Any strength in data will further fuel the Fed hawks and help push back the expectation of the next rate cut further down the road. For now, the first rate cut is being priced in for June – the earliest.