STORY: From Europe’s plans to increase defense spending to key U.S. inflation numbers, these are the stories to watch in business and finance in the coming week.:: Europe’s plans for defense spendingFaced with Russia’s war in Ukraine and fears of U.S. isolationism, European leaders have backed plans for more defense spending.The significance is not lost on markets. The euro and shares are surging; so are German bond yields as investors bet more spending means more borrowing.Suddenly, the U.S. lead in long-term trend growth is no longer a given and investors are re-rating European assets.:: The ‘R’ wordGlobal growth concerns have shot back onto the markets’ radar as weakening U.S. data and growing trade tensions hurt consumer confidence and business activity.Even second tier U.S. data will be closely watched, while the Bank of Canada could cut rates when it meets on Wednesday.While U.S. President Donald Trump suspended the 25% tariffs he imposed on most goods from Canada and Mexico, his fluctuating trade policy continues to fan worries about inflation and growth.Morgan Stanley warned that Trump’s tariffs on China, Mexico and Canada could slow growth in the U.S. and Canada, and push Mexico into recession.:: Feeling hot?Wednesday’s U.S. consumer price report could fan investor fears about still-warm inflation just as Trump’s tariffs on key trading partners could provide a jolt to domestic prices.January’s CPI jumped 0.5% – the biggest gain since August 2023.:: Federal Reserve BoardAnother hot reading could confound recent bets on more Federal Reserve rate cuts this year. :: China and U.S. tariffsOn Trump’s list of tariff targets, China stands out – not least for how well its markets have weathered the tumult.China’s central bank has deftly guided the yuan in a stable range against the dollar and Hong Kong’s Hang Seng index is up 21% this year, making it the best performing major global market. And that’s without the kind of reprieves that Washington has afforded Ottawa and Mexico City.Inflation figures and loan data in the coming days will offer the latest reading of the consumer pulse.Read More
Business Lookahead: Europe’s defense, China weathering tariffs
