TARIFFS: US To Impose Additional 15% Tariff On Japan: Kyodo

US President Trump on Truth Social announces 25% tariffs on Tunisia (the original reciprocal tariff had been 28%). Could be some more announcements coming, that's now 6 of the supposed 12 due today (apart from SKorea and Japan) that have now been announced.

• Separately, Reuters reports that South Korea has issued a statement saying it will attempt to accelerate trade negotiations ahead of the Aug 1 deadline: "SOUTH KOREA SAYS IT WILL STEP UP TRADE NEGOTIATIONS WITH THE U.S. TO WIN MUTUALLY BENEFICIAL RESULTS AND CLEAR UP UNCERTAINTIES CAUSED BY TARIFFS - STATEMENT"

The New York Fed's Global Supply Chain Pressure Index (GSCPI) fell to 0.00 in June from 0.30 in May (upward rev from an initial reading of 0.19). That means the index is zero standard deviations from the index’s historical average - so very much in normal territory despite an uptick in container prices in May amid apparent US tariff front-loading.

• The GSCPI was a closely-watched measure during the pandemic as supply chains were impaired amid strong goods demand, pushing goods inflation sharply higher through 2021-22. See charts.
• There doesn't appear to be anywhere near the same sustained pressure now, despite signs in various indicators (including slower manufacturing ISM delivery times) that would suggest incipient price pressures working their way through.
• While the imposition of tariffs will have an upside impact on prices, those aren't reflected in import price indices. Meanwhile the steady GSCPI suggests US core goods prices, while higher, don't look like they will be pushed up further by global supply chain issues in the near-term.
   

• RES 4: 1.3920 High May 21  
• RES 3: 1.3862 High May 29 
• RES 2: 1.3798 High Jun 23  
• RES 1: 1.3667/3769 20- and 50-day EMA values
• PRICE: 1.3645 @ 16:05 BST Jul 7
• SUP 1: 1.3557 Low Jul 03
• SUP 2: 1.3540 Low Jun 16 and the bear trigger
• SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
• SUP 4: 1.3473 Low Oct 2 2024

The trend needle in USDCAD continues to point south, with Monday’s reversal off intraday highs a further bearish signal. Last week’s move down reinforces current conditions. S/T gains between Jun 16 - 23 appear to have been corrective. Sights are on key support and the bear trigger at 1.3540, Jun 16 low. Clearance of this level would resume the downtrend and open 1.3503, a Fibonacci projection. Pivot resistance is at the 50-day EMA, at 1.3769. A clear break of it would signal scope for a stronger recovery.