ENERGY: China Tariff Increase on China Applicable in a Few Hours
}The China tariff increase on the US is to 84% from 34% and is applicable from 12:01 China time on 10 April (so in a few hours).
- The rhetoric has escalated, too. From the press release: "The US's practice of escalating tariffs on China is a mistake on top of a mistake, which seriously infringes on China's legitimate rights and interests and seriously damages the rules-based multilateral trading system."
https://gss.mof.gov.cn/gzdt/zhengcefabu/202504/t20250409_3961684.htm
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OUTLOOK: Price Signal Summary - Bear Threat In S&P E-Minis Remains Present
- In the equity space, a bear threat in S&P E-Minis remains present following last week’s move lower that reinforced a short-term downtrend. The contract traded to a fresh short-term cycle low again, Friday, marking an extension of the current bear leg. This highlights a stronger reversal and a double top pattern on the daily scale. The focus is on 5658.00, the Sep 12 2024 low. Initial firm resistance to watch is 5993.68, the 50-day EMA. First resistance is at 5884.00, the Mar 4 high.
- The trend in the EUROSTOXX 50 futures contract is unchanged, it remains bullish with price trading closer to its recent trend highs. Key short-term support has been defined at 5373.00, the Mar 4 low. A reversal lower and a break of this level would signal scope for a deeper retracement and expose the 50-day EMA at 5306.33. For bulls, a resumption of gains would open the 5600.00 handle next.
EUR: EUR/USD Sheds ~50 Pips on Greens Opposition to Debt Brake Package
EUR snaps lower on headline stating that Germany's Greens will not support a draft debt package in parliament, putting EUR/USD back into negative territory on the day and steering clear of any test of the Friday highs.
- USD gains slightly on the follow through move, meaning GBP/USD is dragged back down to the 1.2900 handle. Bund futures spike ~30 ticks on that headline, with a lack of Green support reducing prospects for debt brake reform within the current (i.e. Pre-election) Parliament. Friday's high in Bund futures at 128.29 has provided support for now.
- This move from the greens is somewhat unexpected - they're one of the key coalition parties needed alongside the CDU and SPD to get the draft package through parliament. The party spokesperson follows up with:
"GERMAN GREENS PARTY OFFICIAL DROEGE: IF CDU AND SPD WANT OUR BACKING MUST SHOW THAT INVESTMENT GOES TOWARDS CLIMATE AND COUNTRY" - Reuters
STIR: Goldman Sachs Recommend Buying SFRZ5 96.25 Puts vs. 0QZ5 96.25 Puts
Goldman Sachs write that “with 2.5-to-3 Fed cuts priced for 2025 we think SFRZ5/Z6 bear flatteners are a useful structure that positions for cut risk to shift out the curve but insulates from the risk of front-loading in the event of more meaningful growth weakness”. They prefer to express this via an options play and recommend buying SFRZ5 96.25 puts vs. 0QZ5 96.25 puts
