Bond prices fall as European leaders promise "unflinching" response to pressure over Greenland
US bond prices fell and yields rose on Tuesday as markets digested a new round of tariff tensions between the United States and many of its NATO allies.
The market reaction has been characterized as a "sell America" trade. The US dollar index fell around one per cent while the Euro rose 0.7 per cent against the USD. Gold is currently on track for its biggest single-day gain since October.
US stocks have fallen, with the S&P 500 and Nasdaq Composite losing more than one per cent by mid-morning Tuesday.
While markets had previously been willing to look past some of President Trump's policy decisions this year, the threat of 10 per cent tariffs on eight European countries levvied by the US over the weekend has clearly spooked investors. The threatened tariffs would take effect on February 1st and then rise to 25 per cent on June 1st. The policy is being pursued in light of European resistance to Trump's planned takeover of Greenland. According to CNBC European leaders are considering counter-tariffs and other retaliatory measures.
The US dollar drop on Tuesday was the largest since the "liberation day" tariffs were announced in April of 2025.
