Perspectives

As we enter the first quarter of 2025, trade tensions heavily influence market sentiment, with Trump’s tariffs narrative shaping the overall momentum. Volatility has gripped major asset classes – including FX, bonds, and equities – as markets attempt to gauge the scale, timing, and likelihood of these tariffs being fully implemented. While Chinese New Year holidays traditionally bring a quieter tone to the first quarter of the year, tariff announcements - such as a 10% tariff on Chinese imports and a 25% tariff on aluminium and steel - are injecting moderate volatility into the metals complex. What can we expect in the metal markets in the first months of 2025? 

President Trump’s latest trade announcement and a subsequent 90-day pause for most countries jolted currency markets, but the pound’s reaction diverged from conventional expectations. In this month’s outlook, we assess how the UK’s relative insulation from US tariffs has paradoxically coincided with growing downside pressure on sterling, driven primarily by a sharp repricing of Bank of England rate expectations. We explore how this interacts with the UK's fiscal stance, recent macroeconomic data, and evolving trade vulnerabilities—particularly considering continued pressures from US tariffs. With the euro supported by a more measured shift in ECB policy and the EU’s cohesive trade response, we ask: what does this divergence mean for the pound in the months ahead?

This report provides a comprehensive analysis of the EV market, with a particular focus being on supply chain analysis through mining, battery cell production, and sales of EVs. Additionally, we examine the implications of EV-specific tariffs, assessing their impact on cross-border trade, manufacturing costs, and company competitiveness.

Brazil remains a dominant player in the coffee market, with farmers leveraging high domestic prices to maintain strategic selling practices despite wider dollar-based discounts. Nonetheless, challenging weather conditions throughout the growing season are casting a shadow over Brazil's coffee prospects. Understanding these dynamics is essential for making informed decisions as we move forward. Read our coffee crop update, with commentary on recent price activity, and coffee market forecasts to take advantage of market movements. 

Technical analysis and charts for the key sugar, cocoa and coffee contracts.