AFS Markets Blog: Morning 24/07/2026

• Meanwhile in markets, the self-proclaimed Tariff Man is back at it again. President Trump rolling out new tariffs on over 60 economies – yet bond markets remain largely unfazed, continuing to take their cues from crude oil prices instead;

• New tariffs may be overstating it – for many nations the change is more semantic than substantive. For the past 150 days, the globe has faced a 10 percent US tariff rate under Section 122 of the Trade Act of 1974 – but that authority expires today. Since letting the tariffs simply lapse wasn't an option, the White House turned to Section 301 of the same Act, famously used to justify China tariffs during Trump's first term;

• Many economies – including the EU – will keep facing a 10 percent rate under the new regime. However, countries like Japan, South Korea and Switzerland will now face a 12.5 percent rate starting at 12:01 AM ET. The Section 301 tariffs on these nations are justified on grounds that they've fallen short of prohibiting imports of goods made with forced-labor – though I doubt that's the real story behind the difference in rates. Switzerland, for one, has long frustrated President Trump over its stance on trade so I wouldn’t be surprised if personal frustrations play a role;

• It should be noted that the Section 301 tariffs announced today are at or below the levels agreed to in the country-specific deals struck after April 2025's tariffs. The EU, Japan, South Korea and Switzerland all settled on 15 percent back then. Does that mean they are getting off easy? No. More Section 301 investigations are underway which can raise rates further. The EU is reportedly set to accept whatever combination gets it back to that agreed 15 percent total;

• Shifting to markets, Brent crude is trading a hair above the $100 handle, down slightly after touching $102 late in yesterday's session. Overnight strikes between the US and Iran continued, but the Houthis were reportedly quiet – with 17 tankers said to have crossed past their coast unharmed. US Treasury yields are holding near yesterday's close — at or near their highest levels of the Iran war. Pricing for next week's Fed meeting remains live, with 8bps of hikes priced into fed funds futures;

• Over in equities, Asian indexes are having a rough morning: the Nikkei is down 3 percent and both on- and offshore Chinese markets are off over a percent. S&P 500 futures are holding near yesterday's close. In FX, USDJPY continues to trade just below the 164 handle despite jawboning by Japan's finance minister;

• Looking ahead, there are plenty of data on tap throughout the day with preliminary July PMIs from Eurozone members and the US. Besides that, we'll be watching Iran headlines closely, as always.

‍