TARIFFS: Trump Announces 10% Minimum Tariffs, 34% on China, 20% EU
Trump: "We will calculate the combined rate of all their tariffs, non monetary barriers and other forms of cheating. And because we are being very kind...we will charge them approximately half of what they are and have been charging us. So the tariffs will not be full reciprocal"
- Trump chart shows to charge 34% tariffs on China, 20% on EU, 24% of Japan, Vietnam 46%, UK 10%, Korea 25%, Thailand 36%, Switzerland 31%, Indonesia 32%, Malaysia 24%, Cambodia 49%, South Africa 30%
- Trump says there is a minimum baseline tariff of 10%. No mention about Canada or Mexico, potentially another announcement forthcoming.
- It's also unclear whether these tariffs are in addition to, or replacing, existing tariffs.
- See image below from White House feed:
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AUDUSD TECHS: Bear Cycle Remains Intact
- 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: 0.6309 50-day EMA
- PRICE: 0.6245 @ 16:36 GMT Mar 3
- SUP 1: 0.6193 Low Feb 28
- SUP 2: 0.6171/6088 Low Feb 4 / 3 and a key support
- SUP 3: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 4: 0.6000 Round number support
AUDUSD traded lower last week. The impulsive sell-off undermines a recent bullish theme. Price is once again trading below both the 20- and 50-day EMAs and the move down has exposed support at 0.6171, the Feb 4 low. A break of this level would strengthen a bearish theme and suggest scope for a test of the bear trigger at 0.6088, the Feb 3 low. Initial resistance to watch is 0.6309, the 50-day EMA.
US TSYS: Late SOFR/Treasury Option Roundup
Large SOFR and Treasury option volumes carried over from overnight, flow leaning towards downside puts - some targeting over 50bp in rate hikes by year end - fading the move higher in underlying futures. Projected rate cuts through mid-2025 gained some traction vs. this morning's levels (*) as follows: Mar'25 at -1.8bp (-1.4bp), May'25 at -10.2bp (-7.9bp), Jun'25 at -26.0bp (-22.7bp), Jul'25 at -35.3bp (-32.4bp).
- SOFR Options:
- over 42,700 SFRZ5 95.12/95.62/96.12 put flys, 15-16.0 ref 96.285
- +25,000 0QM5/0QU5 97.50 call spds, 4.0-4.25
- +6,000 SFRZ5 95.75/96.00 put spds, 9.75 ref 96.275
- +2,500 SFRM5 96.00 calls, 11.5 vs. 95.92/0.42%
- -40,000 0QM5 96.37/97.00 call spds 16.0 to 15.0 over 0QM 95.37/95.62 put spds
- +6,000 SFRZ5 96.25/96.75 call spds, 14.5
- 2,000 0QM5/2QM5 96.75/97.75 call spd spd
- Block, 10,000 SFRH5 95.68/95.75 2x1 put spds 3.0 ref 95.7025
- 3,000 SFRH5 95.62 puts vs. 95.81/95.87 call spds
- 1,900 0QZ5 93.75/94.37/95.00 put flys ref 96.39
- 6,500 SFRH5 95.68/95.75 call spds ref 95.7025
- 10,000 SFRM5 95.62/95.68 put spds ref 95.925
- Block/screen, 4,000 SFRJ5 95.62/95.75/95.81/95.87 broken put condors
- Block, 18,966 SFRJ5 96.12/96.31/96.56/96.75 call condors, 1.25
- Treasury Options:
- +10,000 TYK5 109 puts, 20
- over +75,000 TYJ5 107/108 put spds, 1 vs. 111-07.5/0.02%
- Block, -22,000 TYJ5 112 calls, 19 vs. +25,000 TYJ5 112 calls, 4 and +7,500 TYJ5 109 puts, 7 vs. +2,200 TYM5 110-30
- 2,500 TYK5 109/111 strangles
- 2,000 FVK5 109/110 call spds ref 107-23.75
- 10,000 Wednesday wkly 10Y 110.75 put vs. wk2 TY 111 calls, 24 net/wk2 over
- over +45,600 TYK5 112 calls, mostly 43
- over 9,900 TYJ5 109 puts, 7 last
- 1,500 TYK5 112/114 call spds 29 ref 110-31
- 2,500 Wednesday Wkly 10Y 112/112.25 call spds ref 110-28.5, exp 3/5
- +2,500 TYJ5 109/109.5/110.5 broken put fly, 13
EURJPY TECHS: Impulsive Rally Highlights A Possible Reversal
- RES 4: 161.35 61.8% retracement of the Dec 30 - Feb 10 bear leg
- RES 3: 161.19 High Feb 13
- RES 2: 159.65 50-day EMA and key short-term resistance
- RES 1: 158.47 High Mar 3
- PRICE: 157.64 @ 16:29 GMT Mar 3
- SUP 1: 155.93/154.80 Intraday low Low Feb 28
- SUP 2: 154.42 Low Aug 5 ‘24 and key medium-term support
- SUP 3: 153.87 Low Dec 14 ‘23
- SUP 4: 152.72 1.00 proj of the Jan 24 - Feb 10 - 13 price swing
Monday’s strong rally in EURJPY undermines a recent bearish threat and instead highlights a potential developing reversal. The cross has traded above the 20-day EMA and this signals scope for an extension towards resistance around the 50-day EMA, at 159.65. Note that a major support at 154.42, the Dec 14 2023 low, remains intact. A break of this level is required to reinstate a bear theme.
