GOLD: Fresh All Time Highs; Lack Of Metal Tariff Limits Physical NY Demand

• BOC SAYS UNCERTAINTY MEANS CAN'T GIVE FORWARD GUIDANCE

Mizuho note that cheapening seen in JGBs on ASW and the dip in X-ccy basis means that buying JGBs and swapping them to SOFR has moved towards the most attractive levels seen in ~2 years (looking at 5- & 10-Year JGBs).

• They note that their “medium-term view is still supportive of X-ccy basis tightening: FX hedging costs for Japanese investors remain too high except in specific areas like BTPs, Yankees continue to sound like a good option to source USD given the attractiveness in terms of issuance, Trump's administration deregulation efforts will continue to ensure ample USD liquidity in the system and we continue to see investor appetite to buy JGB ASWs swapped”.
• They also suggest that “Shunto negotiations are also looking promising, which can support the richening of JPY funding further. The key risk to our view is ongoing risk-off sentiment, but we have noted that x-ccy markets are now more resilient when facing wobbly risk sentiment”.

United States Trade Representative Jamieson Greer has issued a statement on the European Union's retaliatory tariffs on the United States, describing the bloc's trade and economic policies as "out of step with reality".

• Greer: "For years, the European Union has opposed the United States’ efforts to reindustrialize. The EU has rejected attempts under successive U.S. administrations to cooperate effectively on dealing with global excess capacity on steel, aluminum, and other sectors, employing measures that are too little and too late."
• Greer: "If the EU acted as quickly to address global excess capacity as it does to punish the United States, we likely would be in a different situation today. The EU’s punitive action completely disregards the national security imperatives of the United States – and indeed international security – and is yet another indicator that the EU’s trade and economic policies are out of step with reality."
• The statement comes ahead of a meeting with Canadian ministers at the White House this week reported to include discussions on re-negotiating the US-Mexico-Canada trade agreement (USMCA).
• Canadian Finance Minister Dominic LeBlanc told reporters a few moments ago that Canada will "aim to get relief from tariffs" at the meeting but an early review of USMCA is "not on Canada's agenda", per Reuters. LeBlanc added that it is important to identify "offramps" for tariff threats.
• The first such opportunity for negotiations may come this evening when US Secretary of State Marco Rubio arrives in Charlevoix, Canada for a G7 foreign ministers meeting.