UBS On-Air: Paul Donovan Daily Audio 'Credibility and the “sell US” trade'
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Bearish | 1.1140 |
ABN AMRO | Bullish | 1.1500 |
Bank of America | Bullish | 1.1500 |
From the original
Investors and the US administration are likely to keep focus on the US Treasury bond market, which weakened modestly in the wake of US President Trump’s latest tariff threats. The implications of additional tariffs are more US inflation pressures and a further erosion of the USD’
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4 itemsUBS On-Air: Paul Donovan Daily Audio 'Capping inflation'
The updated commentary from UBS highlights the connectedness of bond market movements, geopolitical tension, and inflation expectations. As investors react to the ongoing war in the Middle East, there is speculation that pressure on bond yields may prompt a policy response from the U.S. administration similar to that observed during tariff negotiations. Per the full note [source], while markets are anxious about rising inflation driven by fuel and food prices, the likelihood of a meaningful policy shift remains uncertain due to the complex geopolitics involved. This context holds potential implications for currency pairs sensitive to U.S. fiscal and monetary policy shifts.
UBS On-Air: Paul Donovan Daily Audio 'D-day or Light Brigade?'
The current U.S. affordability crisis is under intense scrutiny, as President Trump threatens to double tariffs on Canadian car imports, though this move is largely seen as political posturing with a delayed implementation date until January 2027. Per the full note from UBS, this signals a pattern of transient threats rather than substantive action, as market participants remain unconvinced of any detrimental fallout. Meanwhile, U.S. Treasury Secretary Besant has raised alarm over Iran sanctions lacking clarity and is seemingly hesitant to confront China, the primary importer of Iranian oil, which complicates the economic landscape further. As market sentiment remains mixed, particularly with regard to inflationary pressures, key data points, particularly those from the German IFO Business Survey, could provide additional insights into European economic sentiments amidst these broader trade tensions.
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