LIVE MARKETS-Tracking tariff impact in economic data

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TRACKING TARIFF IMPACT IN ECONOMIC DATA

U.S. President Trump's trade policy is likely to have a significant impact on global trade and economic growth, but currently investors are unsure by how much.

The picture may become a smidgen clearer this week, as surveys on business activity are released from across the globe.

In a note previewing the European PMI surveys (scheduled for Wednesday), Goldman Sachs says growth expectations and investor sentiment have "deteriorated meaningfully".

"We expect the new US tariffs, tighter financial conditions, still-elevated trade policy uncertainty, and the resulting worsening in global demand to slow European growth and weigh on the April PMIs," they add.

In particular, GS believes the announcement of tariffs is likely to weigh on the manufacturing index, especially in Germany.

In a separate note, GS highlights how actual exports to the U.S. from many countries have picked up recently due to frontloading, but that should pull back with the implementation of Trump's tariffs.

"We will be paying particular attention to the new export order business survey components in the April releases since they should most directly respond to a pullback in US import demand," GS writes.

Goldman expects the euro area composite PMI to fall to a below-consensus 49.9, below the 50 mark that separates expansion and contraction. A Reuters survey of economists expects a fall to 50.3 from last month's 50.9.

(Samuel Indyk)

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