Morning Bid: Trump administration prepares to gut climate laws

A look at the day ahead in European and global markets from Gregor Stuart Hunter

Global stocks are at fresh peaks, helped by the seemingly indefatigable tech sector, while new moves by the U.S. government to shake up climate policy could mark a new pain point for ESG investors. The Trump administration is set this week to overturn the so-called endangerment finding, the Environmental Protection Agency said on Monday. An Obama-era scientific determination that greenhouse gas emissions endanger human health, it serves as the legal basis for broader federal greenhouse gas regulation. That aims to pave the way for what EPA Administrator Lee Zeldin told The Wall Street Journal would be “the largest act of deregulation in the history of the United States.”

Meanwhile, the dollar has continued its slide ahead of the release of several critical U.S. economic reports due for release this week, including retail sales later on Tuesday, delayed payrolls data on Wednesday, and inflation data on Friday. The dollar index, which measures the greenback’s strength against a basket of six currencies, was wallowing near its lows for the month.

White House economic adviser Kevin Hassett said on Monday job gains could be lower in the coming months as Trump’s immigration policies slow labour growth and AI boosts productivity. Fed funds futures continue to indicate that the market expects the Federal Reserve will keep interest rates on hold until June, according to the CME Group’s FedWatch tool. Fed Governor Stephen Miran on Monday argued the Trump administration’s policy of trade tariffs has proved more benign than many had feared, reiterating his call to slash interest rates. He also defended central bank independence but said it was not absolute.

Global stocks are hitting record highs in the meantime. MSCI’s All-Country World Index rose 0.2% to a record as the Nikkei 225 surged 2.5%, rising for a third consecutive day to a fresh peak after Japanese Prime Minister Sanae Takaichi’s election victory at the weekend. The yen also strengthened for a second day, last 0.4% firmer against the U.S. dollar. In early European trade, pan-region futures and German DAX futures were flat, while FTSE futures rose 0.1%.

Key developments that could influence markets on Tuesday: Company earnings: AstraZeneca, BP, Barclays, Philips, Kering, Banca Monte dei Paschi di Siena, Telecom Italia, Ferrari Economic events: France: Unemployment rate for Q4 U.S.: Retail sales for December Debt auctions: Germany: 5-year government debt UK: 5-year government debt

(Reporting by Gregor Stuart Hunter; Editing by Sam Holmes)