US: Focus Now On Appeal, Other Tariff Avenues, Potential Tariff Refunds

Election results have been trickling in from Canada’s Atlantic provinces with little change in seats. Polls have just closed now in the more populous regions of Ontario and Quebec. So far the incumbent Liberal party of PM Carney is on 51.3% of the vote leading in 56 districts, but the Atlantic favours his party, while the Conservatives are on 39.7% leading in 42 districts with one gain from the Liberals, according to CBC. A party needs to be elected in 172 seats to win majority government and with only 28 called so far, there is still a long way to go. 

The USD’s attempt to correct higher fails at its first hurdle, as the market strengthens its view of the USD now trading lower.

• The USD’s attempt to correct higher fails at its first hurdle, as the market strengthens its view of the USD now trading lower.
• Price action was interesting and a decent late bounce in stocks could not really help the USD slide. USD lower in all outcomes ?
• “JPMorgan, BNP Parisbas and Danske Bank forecast the euro will be 1.20 or even more by year-end, a sharp departure from calls for parity from some analysts just 3 months ago.”(per BBG)
• The Bloomberg Dollar Spot Index’s Fear-Greed gauge, a measure that compares buying to selling strength, shows sentiment is near the most bearish since November 2022.
• The PBOC’s job has been made easier by the USD sell-off, the real effective Yuan against its trading partners is already very weak. 
• Resistance in the BBDXY is at 1230, the market could not break above here and will now set its sights on the lows last week towards 1210.
• Data :  US GDP, ISM Manufacturing, NFM payrolls the main events this week. 

Fig 1: BBDXY Fear-Greed Index

Source: MNI - Market News/Bloomberg

The ongoing theme of outflows has showed signs of abating with Taiwan and India enjoying yet another day of strong inflows.   

• South Korea: Recorded outflows of -$100m as of yesterday, bringing the 5-day total to +$92m. 2025 to date flows are -$12,672m. The 5-day average is +$18m, the 20-day average is -$368m and the 100-day average of -$148m.
• Taiwan: Had inflows of +$211m as of yesterday, with total inflows of +$1,417m over the past 5 days. YTD flows are negative at -$18,621. The 5-day average is +$283m, the 20-day average of -$111m and the 100-day average of -$208m.
• India: Had inflows of +$589m as of the 25th, with total inflows of +$2,124m over the past 5 days.  YTD flows are negative -$12,857m.  The 5-day average is +$425m, the 20-day average of +$128m and the 100-day average of -$123m.
• Indonesia: Had outflows of -$11m as of Friday, with total outflows of -$38m over the prior five days.  YTD flows are negative -$3,073m.  The 5-day average is -$8m, the 20-day average -$61m and the 100-day average -$39m
• Thailand: Recorded outflows of -$32m as of yesterday, outflows totaling -$232m over the past 5 days. YTD flows are negative at -$1,722m. The 5-day average is -$46m, the 20-day average of -$31m the 100-day average of -$21m.
• Malaysia: Recorded inflows of +$31m as of yesterday, totaling +$130m over the past 5 days. YTD flows are negative at -$2,746m. The 5-day average is +$26m, the 20-day average of -$30m and the 100-day average of -$37m.
• Philippines: Saw inflows of +$4m as of yesterday, with net inflows of +$2m over the past 5 days. YTD flows are negative at -$286m. The 5-day average is $0m, the 20-day average of -$5m the 100-day average of -$4m.