One Knightsbridge Capital Monday Espresso Podcast

Monday Espresso Podcast - 14th July 2025

[00:00:05] Nathan Sweeney: Good morning everybody. It is Monday the 14th of July. Today I'm joined by Raj Manon. Hi Raj. How you doing?

[00:00:12] Raj Manon: Great. Thank you, Nathan. Good morning. Great to be here.

[00:00:14] Nathan Sweeney: And for those who don't know, Raj is our Head of MPS here at Marlborough. So really good to have him on the show today. I'll start off for a quick wrap of markets for last week.

[00:00:23] Nathan Sweeney: So actually, European markets were in positive territory as were UK markets, but in contrast, we saw kind of muted returns from the US. They were a little down, so there was a bit of a choppy week there. We'll get into it, but really it was being driven by fresh tariff headlines. Which came out during the week.

[00:00:40] Nathan Sweeney: So I suppose, Raj, over to you. Let's start with Trump and tariffs. So what was happening on that front?

[00:00:46] Raj Manon: Yes, that certainly was the big story of the week. So the 90 day tariff pause expired on Tuesday and President Trump wasted no time. He announced a rafted, new tariffs. 25% on imports from Japan and South Korea, and even hinted at even steeper rates on certain sectors like pharmaceuticals where he is actually floated tariffs as high as 200%.

[00:01:11] Raj Manon: On Friday, things escalated even further. Donald Trump suggested a 35% tariff on selected Canadian goods, and he even hinted. At a blanket tariff of 15 to 20% on most trading partners compared to the existing 10% baseline that we're currently experiencing.

[00:01:29] Nathan Sweeney: Yeah. And you can see that, you know, markets really responded sharply to that.

[00:01:32] Nathan Sweeney: So if we look at the S&P on Monday, it did fall about 80 basis points as a result of that, and that's our worst day of this month so far. Obviously early in, but you know, we saw tech and consumer names and financials leading the losses there. But interestingly, we did see copper prices rising on the back of the announcement, and some of the mining companies, they also moved higher.

[00:01:52] Nathan Sweeney: So a bit counterintuitive, but you know, it just goes to show, you know, in markets when something's not working, something else is. But I suppose, Raj, from your perspective, anything else on tariffs that we should be looking out for?
[00:02:04] Raj Manon: Well, from the data that we're seeing, it certainly looks like importers are front running these tariffs, so trying to get in as much product as possible before the high rates kick in on August the first.

[00:02:17] Raj Manon: So it's a case of buy now before it gets more expensive, and that supports the near term demand for metals such as copper.

[00:02:24] Nathan Sweeney: That completely makes sense. We're seeing more demand for copper upfront before those tariffs come in. But let's pivot over to central banks. So the Fed did release minutes last week in their most recent meeting, or from the most recent meetings.

[00:02:38] Nathan Sweeney: I suppose the question is, what did we learn from those minutes?

[00:02:41] Raj Manon: The key takeaway is that the Fed is remaining data dependent. So Powell, he noted that they wanted to see how tariffs impact inflation and the broader economy before committing to rate cuts. So still a wait and see.

[00:02:55] Nathan Sweeney: It really makes sense. You know, if you're a central banker, you wanna see what the impact is of all of these tariffs on inflation. That's kind of your job. Obviously, we know that in the US they are calling for rate cuts, as in the US administration is calling for rate cuts. But yeah, we just have to wait and see how that plays out.

[00:03:10] Nathan Sweeney: But I think at some of the most recent meetings, you're seeing a couple more people leaning towards rate cuts. So you know, the next upcoming meetings will be quite interesting. Were there any other data points out last week that we should focus on?

[00:03:23] Raj Manon: So in the UK, GDP grew half a percent in the three months to May.

[00:03:27] Raj Manon: That was slightly above expectations, although looking at the underlying data growth is clearly slowing.

[00:03:34] Nathan Sweeney: Interesting there as well. You know, UK is a very much in focus at the moment, particularly around the budget and what's happening economically, and it's a lot of focus on taxation as well. So good to see the economy growing and slightly above expectation, but yeah yeah, as you pointed out, we are seeing a bit of a slowing there.

[00:03:50] Nathan Sweeney: So yeah. Thank you Raj. Lots of good insight there. And it was a bit of a quiet week, I think, really from a data perspective, but as always, Trump dominating the news with those recent tariff announcements. But let's take a quick look at what to expect next week.

[00:04:04] Nathan Sweeney: So we are. I suppose moving towards that really important reporting season. So this is where all the companies, particularly US focused companies, come out with their quarterly earnings. And you know, the big companies to kick off reporting season will be US banks. So we get the likes of JP Morgan, Wells Fargo, Citigroup, they'll all report, and it just gives us a little bit of information into how companies are perceiving the landscape.

[00:04:30] Nathan Sweeney: What do tariffs mean for them? You know, are there profit margins being impacted? So these are the things that people will be focused on for the week ahead. So hopefully that's given you a bit of insight. If you do have any questions, please do send 'em into the show. We would love to bring them up. Raj, thank you for joining me this morning.

[00:04:47] Raj Manon: A pleasure, Nathan.

[00:04:47] Nathan Sweeney: Thank you to our listeners and I hope you all have a great week.