US STOCKS: Late Rally: Trump Rescinds Global Chips Curb

• Treasuries look to finish weaker, low end of very wide range (TYM5 111-15.5 low vs. 114-10 overnight high) as markets started to anticipate easing impact from last week's sweeping tariff announcement as more countries look to negotiate or at least respond to the Trump administrations trade policy.
• Heavy volumes (TYM5 over 5.3M after the bell) trades -13.5 at 112-02, curves steper: 2s10s +7.370 at 40.989 (32.805 low vs. 45.006 high), 5s30s +4.087 at 74.100.
• Sharp risk-off tone early overnight buoyed Tsys (10Y yield tapped 3.8693% low before bouncing to 4.2122% during morning trade) as stocks gapped lower on the open. Focus squarely on US tariffs and foreign countries response - rates gapped lower midmorning but quickly rebounded after erroneous headline of 90 day tariff delay made the rounds.
• Bbg reported that “Trump administration officials are debating the merits of creating a new exporter tax credit, a move that offers an implicit acknowledgment of the harm that the White House’s tariff policies risk inflicting on US companies.”
• Dearth of economic data today and tomorrow, focus on Wednesday's March FOMC minutes, CPI data on Thursday and PPI on Friday.

• RES 4: 0.6409 High Dec 9 and a key resistance 
• RES 3: 0.6389 High Apr 3               
• RES 2: 0.6295 50-day EMA 
• RES 1: 0.6077/0.6219 Intraday high / Low Mar 31   
• PRICE: 0.5985 @ 16:57 BST Apr 7 
• SUP 1: 0.5931 1.764 proj of the Sep 30 - Nov 6 - 7 price swing
• SUP 2: 0.5900 Round number support 
• SUP 3: 0.5830 2.000 proj of the Sep 30 - Nov 6 - 7 price swing
• SUP 4: 0.5729 2.236 proj of the Sep 30 - Nov 6 - 7 price swing

Friday’s steep sell-off in AUDUSD cancels a recent bullish theme and instead, confirms a resumption of the downtrend that started late September last year. Today’s fresh cycle low reinforces a bear theme. A key support at 0.6088, the Feb 3 low, has been broken. This paves the way for an extension towards 0.5931 next, a Fibonacci projection. On the upside, resistance to watch is at 0.6219, the Mar 31 low.       

There’s been a mildly negative but slow to build reaction in equity indices since the below story, potentially because it signals another lack of off-ramp on tariff policy. It also followed shortly after surprisingly weak consumer credit data.

• Bloomberg writes that “Trump administration officials are debating the merits of creating a new exporter tax credit, a move that offers an implicit acknowledgment of the harm that the White House’s tariff policies risk inflicting on US companies.” See the full Bloomberg story here.
• “The rebate, which would be geared toward boosting US manufacturers, would be issued at the end of the year to offset the effects of retaliatory tariffs as American companies seek to sell their goods in foreign markets, according to people familiar with the deliberations.”
• The anonymous sources note that “Neither President Donald Trump nor Treasury Secretary Scott Bessent have been formally briefed on the plan, and the idea has divided the administration’s economic team, they said.”
• There’s been a slow mildly negative reaction in equity indices since the headlines, which followed shortly after surprisingly weak consumer credit data, potentially because it signals a lack of off-ramp on tariff policy.