Headlines:
- Trump sees no red line that would change tariff policy – The Atlantic
- China’s Foreign Ministry: President Xi and Trump did not have call recently
- We are still demanding a full removal of US tariffs, says Japan economy minister
- South Korea says no chance to reach trade deal with US before next presidential election
- What are the interest rate expectations for G8FX?
- ECB’s Villeroy: We still have a margin for rate cuts in Europe
- China president Xi reportedly set for Shanghai visit later this week
- SNB total sight deposits w.e. 25 April CHF 451.1 bn vs CHF 448.3 bn prior
- UK April CBI retailing reported sales -8 vs -41 prior
- Strong dollar demand on the cards this month-end – Barclays
Markets:
- JPY leads, CHF lags on the day
- European equities higher; S&P 500 futures down 0.1%
- US 10-year yields up 1.4 bps to 4.28%
- Gold down 0.8% to $3,293.02
- WTI crude down 0.5% to $62.72
- Bitcoin up 1.8% to $95,458
Amid a lack of developments in the tariffs/trade war, markets are struggling for much direction to start the new week.
The dollar is keeping steadier while the overall risk mood is more tentative for the time being. Over the weekend, Trump kept his focus on the Russia-Ukraine conflict so that is not giving much for broader markets to work with.
The greenback is seeing light changes in the FX space but is still on track for a very poor showing for the whole month of April. USD/JPY might have caught a bounce from 140.00 last week but is still poised to end the month over 4% lower. Meanwhile, EUR/USD is still up over 5% on the month even after backing away from 1.1500 to 1.1340 levels now.
USD/CHF might have also caught a decent bounce back to just above 0.8300 now but is down a little over 6% in April trading thus far.
For today, the changes are not amounting to much as the overall risk mood is also more tentative.
US futures are down slightly as we await more trade headlines from Trump potentially to see what to make of things. For now, China continues to deny any contact whatsoever with the US camp and they are also making sure the world knows that there is no phone call between Trump and Xi on tariffs.
In other markets, gold is down slightly again today and keeping under $3,300 in a bit of a short-term consolidation phase. And as for Treasuries, we are seeing a calmer tone but yields are still much higher since the beginning of the reciprocal tariffs announcement at the start of this month.
Looking to the week ahead, there’s going to be much to focus on with month-end flows in consideration, key tech earnings (Microsoft, Meta, Apple, Amazon), as well as the US jobs report on Friday. All of that to mix with more Trump headlines surely.
This article was written by Justin Low at www.forexlive.com.
