Welcome to this week’s Market Pulse, your 5-minute update on key market news and events, with takeaways and insights from the Sidekick Investment Team.

Today, we're looking at how US demands are threatening the EU trade deal, gold reaching a historic price milestone, and an unexpectedly helpful UK data error.

But first, our number of the week…

$12 billion

That’s how much collapsed auto-parts supplier First Brands owed to creditors, including Wall Street firms like Jefferies, UBS, and Millennium. The company unexpectedly collapsed late last month, with regulators and debtholders now sifting through the wreckage. 

Sidekick Takeaway: It’s still unclear exactly what went wrong at First Brands, but it’s becoming increasingly evident that the company’s reliance on private credit and complex funding mechanisms played a role. Opaque financing allowed the company to build up hidden risks with little oversight from creditors. 

Only have a minute to read? Here’s the TL;DR:

• Just months after agreeing to a trade deal with the EU that broadly capped tariffs at 15%, the Trump administration is attempting to use metals-based carveouts to justify higher levies on a wide range of products. According to EU officials, additional US demands for exemptions from climate rules threaten to undermine the entire agreement.
• Gold reached $4,000 per ounce for the first time in history, with year-to-date gains exceeding 40%. While analysts have pointed to rising uncertainty to explain gold’s performance, risk assets have largely gained, with the S&P 500 climbing over 11% on the year. In reality, central bank purchases may explain more of gold’s rise. 
• UK data authorities discovered a £3 billion error in VAT calculations, revealing that government borrowing was lower than previously thought. While this provides welcome breathing room for Rachel Reeves’ tight fiscal rules, it highlights the UK's persistent and troubling data quality issues. 

It’s important to note that the content of this Market Pulse is based on current public information which we consider to be reliable and accurate. It represents Sidekick’s view only and does not represent investment advice - investors should not take decisions to trade based on this information.

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Empty Promises: New US Demands Threaten EU Trade Deal

After tense negotiations this summer, EU and US officials finally agreed on a framework for a formal trade deal.

That framework included capping broad tariffs at 15%, duty-free trade on specific products, and a string of cross-border investment agreements.  

But just a few months later, that framework already looks to be falling apart. 

Reports this week indicate that new demands from the US are threatening to undermine the previous agreement, leading to fears that negotiations may have to start from scratch.

US seeks metals loophole to justify higher tariffs

The EU-US agreement contained a specific carve-out for products like steel and aluminium. These metals came with a 50% tariff, above the 15% baseline.

Now, the Trump administration is seeking to justify higher tariffs across the board through a metals-related loophole:

• By defining many goods as ‘derivative’ of metals, US officials argue that these goods should also receive a 50% tariff rate.
• With the derivative list now including goods like furniture, bulldozers, and wind turbines, EU officials fear that the baseline tariff rate could become meaningless. 
• Other fresh US demands include exceptions for American firms from EU rules relating to climate change, supply chains, and data security. 

EU officials have already made clear that such legislative changes are off the table.

But that hasn’t stopped the US from trying. Along with the metals loophole, that pressure could threaten to upend the trade agreement entirely.

Sidekick Takeaway: Aside from the EU, the Trump administration is currently negotiating a revised trade deal with China, which could be even more significant for the American economy. Bad-faith displays like utilising loopholes and reneging on previous agreements don’t bode well for the reliability of any future deal the US signs. 

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Breaking Records: Gold Reaches Highest Price in History

Gold has been a financial instrument for thousands of years. But this week, the metal reached a new milestone, hitting a price of $4,000/oz for the first time in history.

Gold’s price has been steadily rising throughout 2025, with year-to-date gains now eclipsing 40%. 

As a traditional safe-haven asset, analysts have pointed to rising geopolitical and economic uncertainty to explain gold’s performance. Investor anxiety has been exacerbated by the US government shutdown.

However, the story may not be so simple. While ‘risk-off’ assets like gold are performing strongly, so too are ‘risk-on’ assets. 

Gold and stocks: A conflicting story

If gold’s performance were truly due to widespread investor anxiety, we’d expect to see risky assets suffering this year. But that hasn’t been the case at all:

• Despite a pullback this week, the S&P 500 is up more than 11% this year, and continues to trade near all-time highs. Investors remain optimistic about continued AI expansion. 
• Risk metrics like the VIX, commonly known as Wall Street’s ‘fear gauge,’ also remain muted. Over the past few months, the VIX has largely traded below 20, a relatively low level.
• ‘Altcoins,’ widely used as a measure of speculative frenzy, also remain robust. Tokens like Solana, XRP, and Doge have all registered positive performance over the past year.

None of these indicators points to the type of fear that would typically drive gold prices to historical highs.

Time will tell how this conflict ultimately resolves – either gold or stocks may have the last word.

Sidekick Takeaway: One factor that may explain much of the record gold surge is central bank purchases. As global monetary authorities have shifted away from the dollar, they have increasingly embraced the metal, with central banks now holding more gold than US Treasuries. 

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Failing Upwards: Data Error Works in Reeves’ Favour

The UK’s struggle with data quality issues is no secret. In recent years, poor estimates and delayed releases have become par for the course.

Typically, these mistakes make running Britain’s public services more challenging.

But this week, the discovery of a multi-billion-pound error actually turned out to be a positive, buying additional breathing room for the UK’s budget.

UK borrowed £3 billion less than previously thought

According to the Office for National Statistics, the UK’s chief data authority, recent value-added tax figures were not accounted for properly.

Tax receipts were actually £3 billion higher than previously thought. As a result, net government borrowing was lower.

That’s particularly welcome news for Chancellor Rachel Reeves, whose fiscal rules require a tight government budget.

Reeves is still overshooting official budget forecasts. But discovery of the data error shrunk that overshoot to £9.4 billion, a meaningful reduction.

Still, it won’t be enough to get the UK’s budget back on track, leaving the door open for tax rises in November. 

Sidekick Takeaway: While this data error worked out in the British government’s favour, it just as easily could have gone the other way, with revenue overestimated by £3 billion. Accurate figures are essential to sound public policy, and the UK's persistent data quality issues demand urgent attention and reform.

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Notices

Sidekick Money Ltd is a company registered in England and Wales (No. 13882980). Sidekick Money Ltd is authorised and regulated by the Financial Conduct Authority (FRN 984829). Our address is 21-33 Great Eastern St, London, EC2A 3EJ.

𝘗𝘭𝘦𝘢𝘴𝘦 𝘳𝘦𝘮𝘦𝘮𝘣𝘦𝘳, 𝘪𝘯𝘷𝘦𝘴𝘵𝘪𝘯𝘨 𝘴𝘩𝘰𝘶𝘭𝘥 𝘣𝘦 𝘷𝘪𝘦𝘸𝘦𝘥 𝘢𝘴 𝘭𝘰𝘯𝘨𝘦𝘳 𝘵𝘦𝘳𝘮. 𝘠𝘰𝘶𝘳 𝘤𝘢𝘱𝘪𝘵𝘢𝘭 𝘪𝘴 𝘢𝘵 𝘳𝘪𝘴𝘬 - 𝘵𝘩𝘦 𝘷𝘢𝘭𝘶𝘦 𝘰𝘧 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵𝘴 𝘤𝘢𝘯 𝘨𝘰 𝘶𝘱 𝘢𝘯𝘥 𝘥𝘰𝘸𝘯, 𝘢𝘯𝘥 𝘺𝘰𝘶 𝘮𝘢𝘺 𝘨𝘦𝘵 𝘣𝘢𝘤𝘬 𝘭𝘦𝘴𝘴 𝘵𝘩𝘢𝘯 𝘺𝘰𝘶 𝘱𝘶𝘵 𝘪𝘯.