EURGBP: Cross Strength Pervades as EUR Outperformance Beds In
May-29 16:03
Strength in EUR/GBP extends well after the London close, with the rally off overnight lows now extending to over 70 pips.
- With tariff vol and uncertainty returning with the overnight Court decision, EUR status as a relative haven is clearly playing out and, despite the UK's interim agreement struck with the US, GBP is suffering as a result.
- GBP's correlation with risk also clear to see, with the break lower in the e-mini S&P toward yesterday's pullback lows mimicking the sell-off for GBP. We wrote yesterday that GBP valuations may appear stretched as BoE-ECB pricing is meeting resistance, and may have prevented EUR/GBP from further follow-through sales this week.
- The cross still yet to meaningfully challenge next resistance: the 50-day EMA at 0.8444. Clearance here opens potential for a stronger reversal toward 0.8541.
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US TSY OPTIONS: BLOCK: Jun'25 30Y Put
Apr-29 16:02
- 7,980 USM5 109 puts, 9 vs. 116-08/0.05% at 1139:24ET
- additional 30Y puts a little earlier:
- 4,910 USM 110 puts10 ref 116-27
OPTIONS: Larger FX Option Pipeline
Apr-29 16:00
- EUR/USD: May01 $1.1270(E1.1bln), $1.1500(E1.0bln); May05 $1.1073(E2.4bln), $1.1100($1.5bln), $1.1190-00(E1.4bln), $1.1285-00(E2.3bln)
- USD/JPY: May01 Y143.00($1.3bln), Y145.75($1.6bln); May02 Y147.50($1.2bln)
- AUD/USD: May05 $0.6550-60(A$1.0bln), $0.6635-45(A$1.1bln)
- USD/CAD: May05 C$1.3865-70($2.5bln)
TARIFFS: Tariff Relief For Autos Will Be Phased In Over Three Years - Lutnick
Apr-29 15:57
Reuters carrying comments from US Commerce Secretary Howard Lutnick providing more clarity on tariff relief to the auto sector President Donald Trump is expected to enact via Executive Order today and announce at his 100 days rally in Michigan this evening.
- Lutnick says, “Adjustments to autos tariffs are aimed at allowing domestic automakers time to grow US plants, employment,” adds that the measures, “grew out of detailed conversation with domestic car makers”.
- Lutnick says, “manufacturers of US-built autos will get a 15% offset for the value of those vehicles against parts imports,” and “all cars that are finished in US that have 85% domestic content will have no tariffs.”
- According to Lutnick, the measures will help domestic car makers move supply chains to the US. Lutnick states that the tariff relief will be “phased in over three years to allow automakers to produce supply chains in US.”
- Lutnick says the tariff relief will be available to all US-built vehicles, apply to foreign car makers building cars in US, and available to anybody who wants to build cars in America.
- As noted in today’s edition of the MNI US Daily Brief, and confirmed by CNBC a short time ago: “Current tariffs of 25% on imported vehicles into the US will continue, but the new measures will prevent other adjacent levies such as steel and aluminum from “stacking” on top of them.”
