This week’s data docket is relatively light with the main focus likely to be Friday’s January PPI release. What will be of greater interest will be global market reactions to the surprise Supreme Court decision last Friday as well as the Trump administration’s subsequent actions. the Supreme Court held in a 6-3 majority that the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to implement sweeping tariffs was unconstitutional. In response, the Trump Administration has vowed to implement a 15% global tariff under section 122 authority. Trump also threatened potential tariff actions under other statutes (sections 301, 338 and section 232) but each has procedural limitations and/or political trade-offs. We expect the Section 122 tariffs to end up covering a similar range of items to the most recent IEEPA tariffs, which would cause the effective tariff rate to fall modestly by 1.6pp to to 12% from the current 13.6% levels. In US macro data this week, we have PPI for Jan, initial jobless claims & consumer confidence. In UST dated supply, we have $69 BN of 2 year supply, $70 BN of 5 year supply & $44 BN of 7 year supply. Considering the strong NFP nos of Jan, we don’t see any urgency in cutting rates as long as Powell remains as Fed Chair. But we continue to expect two more rate cuts of 25 bps each in CY26, one in the 17th June FOMC meeting & the last cut in the 16th Sep FOMC meeting. These two rate cuts might be more from an insurance cut perspective under the new Fed Chair Warsh. In RoW events, we have European HICP inflation & German IFO data, Canadian Q4 GDP & Australian Jan'26 CPI.
