AUD: Rare Extended Consolidation Phase, Historically Resolves With Weakness

• MNI speaks to Chinese advisors and former officials about its trade policy at a time of U.S. tariffs -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com

• Fed Funds implied rates are unchanged to a little lower on the day for late 2025 meetings (-2bp for Dec) with some contained risk off moves following the Washington Post reporting around White House aides drafting a proposal for tariffs of around 20%.
• Cumulative cuts from 4.33% effective: 5bp May, 20.5bp Jun, 37.5bp Jul, 54.5bp Sep and 78bp Dec.
• The 78bp of cuts priced for 2025 is off yesterday’s 81bp although still towards the dovish end of recent ranges.
• US data should receive attention today, especially March ISM mfg and February JOLTS at 1000ET, along of course with further headline watch ahead of Apr 2 tariff announcements.
• Scheduled Fedspeak looks unlikely to move the needle, with Richmond Fed’s Barkin (non-voter) speaking on policy and the economic outlook at 0900ET after yesterday’s CNBC appearance. His base case is that it will take a while for clarity around tariffs, and he’s nervous about inflation and employment. He’s in no hurry to cut rates and doesn’t see now being a time for forward guidance.
• NY Fed’s Williams (permanent voter) yesterday told Yahoo Finance that he wants to watch data to see the impact of tariffs on prices. The Fed needs to keep an open mind on how long tariff impacts will last with there definitely a risk of higher inflation, whilst pledging to keep long-term inflation expectations anchored. His baseline view is that inflation will be relatively stable but risks to growth and inflation are both very important. 

Stocks holds the entirety of the move lower triggered by the Washington Post story - the "around 20 per cent on at least most imports to the United States" is at the sharper end of expectations. We wrote earlier that while there is no real consensus on the tariff %, the average levy is expected between 10 - 20%, hence the market move (EUR, stocks lower) on that headline.

• E-mini S&P is falling further at typing: 5619.25 marks the first support and overnight low, ahead of the more major 5533.75 pullback low and bear trigger.
• EUR/USD, however, has bounced off headline-triggered lows, potentially stemming from the article's mention that "several options", potentially less extreme than a blanket tariff, remain on the table.