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Analysts at Nordea Markets suggest that last week, it was a bumpy risk appetite, as both tariff risks and North Korea have entered the frame again.  

Key Quotes

“We warned a few months back that Auto tariffs would be the obvious next target for Donald Trump given the discrepancies in the import-taxation of Autos between the US and Europe (and the US and China for that matter). The concept of mirror-taxation that Trump launched at his press meeting on the steel and aluminium tariffs thus stills seems to be at the top of the US president’s agenda.”

“While the market overestimated the Trump risks a few months back, we now tend to think that risks are more balanced or  even tilted towards Trump re-rocking the market boat.  The market repercussions of a renewed focus on tariffs and the breakdown of North Korea talks are relatively clear. If North Korean tensions increase again and if Trump decides to launch auto tariffs,  it will take its toll on risk appetite in general and likely also be a game-changer for the current USD positive market environment (at least initially).”