TARIFFS: Post-Liberation Day Tariff Levels Remain, But Borne By China
The EU is implied to be included in the US's announcement of a 90-day pause/10% rate, per a White House official cited by Bloomberg - though the article doesn't address the Mexico/Canada ambiguity mentioned earlier: "Countries that were hit with the higher, reciprocal duties that went into effect Wednesday will now be taxed at the earlier 10% baseline rate applied to other nations, with the exception of China, according to a White House official."
- Ex-CEA Chief Economist Ernie Tedeschi makes the following observation, on X.com: "Folks, a 10% broad tariff on everything plus 125% on China, is a 25pp increase in the effective tariff rate, even accounting for USMCA exemptions. That's almost exactly where 2025 tariff policy was this morning. It was just less concentrated on China & more weighted overseas".
- That math checks out, roughly speaking: China represented around 13% of US goods imports in 2024, so every 10% effective increase to the Chinese tariff rate = 1.3pp to the US overall effective import tariff rate. The pullback in the ex-China rate to a blanket 10% (not taking into account sectoral carveouts) for the 87% more or less offsets the 70bop China increase from 54% to 125%.
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US: European Public Remains Supportive Of Ukraine
A “major new study” from More in Common, based on polling of 7,000 people across France, Germany, the UK, The US and Poland, has found that, “despite the breakdown in relations between Donald Trump and his Ukrainian counterpart Voldoymyr Zelenskyy, there remains strong public support for Europe to stand by Ukraine.”
- The report notes: “The poll found that while the British public tends to be even more supportive of Ukraine than their European counterparts, strong majorities in every nation surveyed believe Ukraine's defence is important to their country.”
- The polling report comes ahead of a crucial meeting between Ukrainian officials and a US delegation led by US Secretary of State Marco Rubio in Jeddah, Saudi Arabia where US officials intend to press Kyiv on accepting a ceasefire framework that can be presented to Moscow.
Figure 1: “Thinking about the war in Ukraine, how important is it for (your country) that Ukraine defends its sovereignty against Russian aggression?”
Source: More in Common
GBPUSD TECHS: Trading At Last Week’s Highs
- RES 4: 1.3119 76.4% retracement of the Sep 26 ‘24 - Jan 13 bear leg
- RES 3: 1.3048 High Nov 6 ‘24
- RES 2: 1.2990 High Nov 8 2024
- RES 1: 1.2947 High Mar 10
- PRICE: 1.2904 @ 16:12 GMT Mar 10
- SUP 1: 1.2768 Low Mar 5
- SUP 2: 1.2674 20-day EMA
- SUP 3: 1.2593 50-day EMA and a short-term pivot support
- SUP 4: 1.2440 Low Feb 13
The trend in GBPUSD remains bullish and the pair is holding on to last week’s gains. Moving average studies have recently crossed into a bull-mode position, highlighting a stronger uptrend. The pair is testing 1.2924, the 61.8% retracement of the Sep 26 ‘24 - Jan 13 bear leg. A clear break of this level would open 1.2990, the Nov 8 2024 high. Initial firm support is 1.2593, the 50-day EMA. A pullback would be considered corrective.
EURUSD: Bulls Remain In The Driver’s Seat
- RES 4: 1.1040 High Oct 4 2024
- RES 3: 1.0961 76.4% retracement of the Sep 25 ‘24 - Feb 3 bear leg
- RES 2: 1.0937 High Nov 5 / 6 2024
- RES 1: 1.0889 High Mar 7
- PRICE: 1.0836 @ 16:11 GMT Mar 10
- SUP 1: 1.0766/1.0544 Low Mar 6 / 20-day EMA
- SUP 2: 1.0473 50-day EMA and a short-term pivot level
- SUP 3: 1.0360 Low Feb 28 and a key support
- SUP 4: 1.0317 Low Feb 12
EURUSD bulls remain in the driver’s seat. Last week’s gains mark a continuation of the reversal on Feb 3. The pair is trading at recent highs and note that moving average studies have crossed and are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.0937, the Nov 5 / 6 2024 high. Initial key support to watch lies at 1.0487, the 50-day EMA. The uptrend is overbought, a pullback would allow this set-up to unwind.
