​EBC Markets Briefing | Euro gains footing; French stocks plummeted

The dollar retreated to its lowest level in a week in early trading on Tuesday after threats from the White House towards the EU over the future of Greenland triggered a broad selloff across US assets.

The EU may hit the US with 93 billion ‌euro worth of tariffs ‌or restrict American companies from the bloc's market. The retaliation ‌measures were drawn up after Trump announced "reciprocal tariffs" in April.

Still European leaders are trying to placate Trump by cutting deals and not confronting him, particularly as they work to maintain US military and intelligence support for Ukraine to fend off Russian aggression.

The IMF forecast euro zone growth at 1.3% for ‍2026 and 1.4% for 2027, driven by increased public spending in Germany and stronger performances in Spain and Ireland.

The European Central Bank sees no reason to revisit interest rates in the near term, with current policy settings expected to form a stable baseline for the next several years, provided economy evolves broadly as forecast.

The Supreme Court ruling on tariffs is at higher stakes. If it is against Trump, it could force the government to issue refunds to importers, including major retailers such as Walmart and Home Depot.

The single currency rebounded from 200 SMA, but it seems questionable if the rise could go beyond 50 SMA immediately. We expect consolidation between the levels before the dust on Greenland is settled.

Asset recap

As of market close on 19 January, among EBC products, US natural gas led gain, rebounding from a thirteen-week low as forecasts predicted a much colder-than-normal stretch across large parts of the US.

The Swiss franc is cementing its position as the world's go-to refuge. The move underscores the franc's role due to Switzerland's modest debt burden, political neutrality, and predictable policy-making.

France will use special constitutional powers to force a budget for 2026 through parliament, PM Lecornu said on Monday. The country was the biggest loser among major European equity markets.

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