TARIFFS: FT: Trump Administration To Soften Tariffs For Key Automaker Inputs
Equity futures are picking up after the cash close with carmaker stocks leading as the FT reports (link) the Trump administration is set to soften tariffs due to be paid by US automakers on key imported components. The report centers on a "destacking" of some previously-announced tariffs, including the fentanyl duties on Chinese imports and duties on steel and aluminum. From the FT article, citing "two people with knowledge of the matter":
- "The move would exempt car parts from the tariffs that Trump is imposing on imports from China to counter fentanyl production, as well from those levied on steel and aluminium — a “destacking” of the duties, according to two people with knowledge of the matter. The exemptions would leave in place a 25 per cent tariff Trump imposed on all imports of foreign-made cars. A separate 25 per cent levy on parts would also remain and is due to take effect from May 3. "
- It's another sign that the Trump administration is reconsidering various aspects of its tariff policies, and the risk-on market reaction reflects that this is being seen as another climbdown.
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AUDUSD TECHS: Still Trading Above Support
- RES 4: 0.6429 High Dec 12 ‘24
- RES 3: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg
- RES 2: 0.6409 High Feb 21 and a bull trigger
- RES 1: 0.6391 High Mar 17 / 18
- PRICE: 0.6272 @ 16:56 GMT Mar 24
- SUP 1: 0.6258 Low Mar 21
- SUP 2: 0.6187 Low Feb 4
- SUP 3: 0.6171/6088 Low Feb 4 / 3 and a key support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
A short-term bullish theme in AUDUSD remains intact and the latest pullback appears corrective. Key short-term support to watch lies at 0.6187, the Mar 4 low. A break of this level is required to reinstate a bear threat. First support lies at 0.6258, the Mar 21 low. A resumption of gains would refocus attention on 0.6409, the Feb 21 high. Clearance of this hurdle would strengthen a bull cycle and resume the uptrend that started Feb 3.
EURJPY TECHS: Bullish Outlook
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 164.19 High Mar 18 and the bull trigger
- PRICE: 162.51 @ 16:55 GMT Mar 24
- SUP 1: 160.74 Low Mar 20
- SUP 2: 160.28 50-day EMA
- SUP 3: 158.90 Low Mar 10
- SUP 4: 158.00 Round number support
The recent move down in EURJPY appears corrective and has allowed an overbought trend condition to unwind. Short-term pivot support to watch is 160.28, the 50-day EMA. A break of this level would signal potential for a deeper retracement. Recent gains resulted in a print above resistance at 164.08, the Jan 24 high. A clear break of this hurdle would open 164.90, the Dec 30 ‘24 high.
CANADA DATA: Manufacturing Sales Set To Pull Back After Strong January
The advance estimate of Canadian manufacturing sales shows a 0.2% M/M nominal decline in February, led by falls in food / petroleum and coal products, per StatCan.
- If confirmed, it would mark the weakest reading / first decline (in nominal terms) since September.
- Recall that the prior figure (+1.7% M/M) reflected a strong rise in motor vehicle and primary metals sales, and though real sales rose by just 0.9%, the latter should mean a decent contribution from industry to January GDP (out Friday; consensus is +0.3% M/M after +0.2%).
- However - pending prelim wholesale sales data out this Wednesday - industry in February may have proven sequentially weaker, and comes against a backdrop of uncertainty and volatility amid a nascent US-Canada trade war.
