GOLD: 2% Lower On Equity and USD Recovery; Dominant Uptrend Still Intact For Now
May-01 09:54
Gold prices are over 2% lower on the session at $3,220, with global equities and the USD finding support from yesterday’s strong US tech earnings (Microsoft and Meta) and hopes for US trade deals in the coming weeks.
- Initial support at the 20-day EMA ($3,244.2/oz) has been pierced, which could begin to signal a short-term top should the price stay fragile. $3,167.8 marks the next key downside level, the April 3 high and recent breakout.
- The S&P 500 index has now fully retraced the April 3 - April 7 reciprocal tariff-driven selloff, which has contributed to a wave of profit taking amongst gold investors.
- For now though, moving average studies remain in a bull-mode position highlighting a dominant uptrend. Initial resistance is the April 23 high at $3,386.6, which shields the April 22 all-time high of $3,500.1
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TARIFFS: Trump's Liberation Day Tariffs - What to Expect?
Apr-01 09:50
- What we know: Trump, with his cabinet in attendance, will announce the details of his reciprocal tariff plan at 1500ET/2000BST tomorrow, aiming to address "unfair" trade practices with "country-based" tariffs. Sectoral duties will still be implemented, but will not be the focus Wednesday - so don't expect details on Autos, copper, pharma, or otherwise. There will be "no exemptions at this time" - meaning there appears to be little room for bilateral negotiation at this stage.
- What we don't know: Which countries will be targeted, what the outright levies will be, and when they will be effective by. It is also not clear whether tariffs will 'stack' - e.g. whether Aluminium exports to the US from a tariffed country will be double charged. It is also unknown whether goods deemed compliant under USMCA, or other trade agreements, will be exempt, or subject to an outright tariff.
- What does the market expect? There is no real consensus on what the outright tariff % could be, however it's expected that those that maintain the largest relative trade surpluses with the US will be targeted most heavily (including, but not limited to, the EU, China, Mexico, Canada, Japan, South Korea). Average levies are expected to range between 10-20%, but outsized risk remains - particularly considering Trump's recent threats to charge as much as 50% tariffs on Canadian goods in the short-lived rift over Ontario's electricity surcharges.
EURIBOR OPTIONS: Longer dated call spread
Apr-01 09:44
ERM6 98.875/99.00/99.375c ladder, bought for -1 in 2k.
EURIBOR OPTIONS: Latest notable Options
Apr-01 09:39
- ERM5 97.875/98.00cs, sold at 5.25 in 7k.
- ERZ5 98.0625/98.25cs vs 97.75/97.50ps, bought for 3.5 in 7k.
- 0RJ5/0RK5 98.00/98.12cs vs 97.5625p, bought the May for 0.25 in 10k.
