EM CEEMEA CREDIT: NAVOIM: IPTs out

Of note:

EURUSD 1.12bn at 1.1000.

USDJPY 1.76bn at 146.00.

USDCNY 1.06bn at 7.3500 (tue).

EURUSD 1.25bn at 1.1000 (fri).

• EURUSD: 1.1000 (1.12bn), 1.1055 (389mln), 1.1070 (404mln), 1.1100 (572mln).
• USDJPY: 145.00 (425mln), 146.00 (1.76bn), 146.50 (569mln).
• USDCAD: 1.4200 (444mln), 1.4270 (532mln).
• NZDUSD: 0.5610 (300mln).

The Foreign Affairs Council meets in Luxembourg in its trade format, where ministers will discuss what the Union's response to US President Donald Trump's imposition of market-rattling tariffs on imports should be. Late on 4 April, Trade Commissioner Maros Sefcovic confirmed that he had held talks with US Commerce Secretary Howard Lutnick and USTR Jamieson Greer, posting on X: "A frank 2h exchange w Sec. [Lutnick] and Amb.[Greer]. I was clear: US tariffs are damaging, unjustified. The [EU-US] trade relationship needs a fresh approach. The EU's committed to meaningful negotiations but also prepared to defend our interests. We stay in touch."

• The aim of today's Council meeting is for ministers to discuss strategies for what US industries should be targeted, when they should be targeted, and how. There are still signs of some divisions among member states on the nature of the response. Notably, Italian PM Giorgia Meloni is seen as an obstacle to a more hard-line retaliation, saying in late March that choosing between the EU and US is "childish".
• A live stream of doorstep comments from 1000CET (0400ET, 0900BST) can be found here. A post-meeting press conference is expected ~1440CET (0840ET, 1340BST).
• EU ambassadors will meet on 9 April to vote on a response to Trump's initial tariffs on steel and aluminium imports, with Politico reporting the Commission is "collecting final feedback from national capitals and more debate is in order, but the overwhelming expectation is that the bloc will vote to hit back this week."

• With European equities gapping lower at the open, it's no surprise to see JPY getting further support through Asia-Pac trade and maintaining that poise into early Europe. There is little sign that the risk-off trade has bottomed, evident in the new pullback low for AUDJPY at Y86.15 overnight, the lowest print since Mar'23's Y86.06, and 2022 before that.
• NOK/CHF trades similarly, defining both ends of the G10 FX table today, making for a convincing break through the 8.00 handle at the open as the cross becomes another strong indicator of risk.
• The breakout in implied vols strongly suggests markets see little respite for spot forward. G10 3m vol is comfortably clearing to multi-year highs across many markets (see chart below) -
• While spot may have settled somewhat over the past hour or so, pre-market trade in single stocks is set to begin imminently - and another significant phase of weakness is expected for mega-cap names - which could keep risk on the backfoot.