FOREX: USDJPY Extends Surge Amid Dovish BOJ and Equities Rally
May-01 16:38
- Despite the plethora of national holidays on Thursday, currency markets have seen significant swings, with the USD index (+0.78%) notably extending its recovery to trade back above the 100 mark ahead of Friday’s US employment report. The yen has significantly underperformed following a dovish tilt from the Bank of Japan and higher US yields/equities providing additional headwinds.
- As such, USDJPY stands 1.65% firmer on the session having extended a clean break of the recovery highs around the 144 handle. The move coincided with a breach of the 20-day EMA which may have also exacerbated the topside momentum. Highs approaching the APAC crossover are seen at 145.65, and represent a 280 pip rally from session lows. Firmer resistance is located at the 50-day EMA, intersecting at 146.72.
- Elsewhere, losses across the G10 space have been broad based against the dollar. The likes of EUR and GBP are roughly half a percent lower, back below 1.13 and 1.33 respectively.
- The recent pullback in EURUSD is considered corrective and the trend structure is unchanged, it remains bullish. Moving average studies are in a bull-mode position signalling a dominant uptrend, and the latest move down is allowing an overbought condition to unwind. Key support is at the 20-day EMA, at 1.1251.
- USDCHF has also strengthened 0.75% today, with the highs of the session once again coinciding with the 2023 breakdown point at 0.8333, and the 20-day EMA. This could increase the pair’s importance ahead of Friday’s release of the US employment report. Elsewhere, flash inflation data for the Eurozone is a calendar highlight on Friday.
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TARIFFS: Leavitt Says Trump Has Made Tariff Decision, Will Announce Tomorrow
Apr-01 16:30
White House Press Secretary Karoline Leavitt has stated at the White House daily press conference that April 2, the day President Donald Trump is scheduled to announce his “reciprocal tariff” regime, will go down as “one of the most important days in modern American history.”
- Asked if Trump has “made up his mind” on the level of tariffs, Leavitt says: “He has made a decision and a determination… and he is going to announce that decision tomorrow…”
- Leavitt adds: “He is with his trade and tariff team right now perfecting it to make sure this is a perfect deal for the American people… and you will find out in about 24 hours from now.”
- Asked if tariffs will go ahead on April 3, as scheduled, Leavitt says: “Correct. Yes they will.”
- Leavitt says the “days of being ripped off are over”, and claims that Trump will offer companies the “lowest taxes, energy costs, [and] regulation if they make their products in the United States and hire American workers.”
- When asked if Trump will alter what he’s planning if countries/companies change their policies before tomorrow's announcement, Leavitt reiterates that no tariffs will be applied to companies that manufacture in the US. She declines to elaborate on if a statement of future intent will be sufficient for Trump to ease tariffs.
- She says Trump is “always up for a phone call” but stresses that tomorrow’s action is designed to address historical imbalances.
US OUTLOOK/OPINION: Atlanta Fed GDP Now Sees Even Deeper Q1 Contraction
Apr-01 16:14
The Atlanta Fed's GDP Now estimate for Q1 GDP has fallen again in the latest update, to -3.7% (vs -2.8% in the prior estimate). The gold-adjusted estimate is -1.4% (was -0.5% prior).
- While the headline estimate is still skewed heavily by the gold import factor, interestingly for the first time in these updates, real private consumption is seen contracting (-0.6%), amid an even softer domestic demand estimate.
- "After this morning’s construction spending report from the US Census Bureau and incorporation of the available March data into the models’ dynamic factor model, including manufacturing data from Institute for Supply Management and measures of consumer attitudes from two surveys, both the standard model’s and the alternative model’s forecasts of first-quarter real final sales to private domestic purchasers growth declined from 1.5 percent to 0.4 percent."
FED: US TSY TO SELL $75.000 BLN 8W BILL APR 03, SETTLE APR 08
Apr-01 16:05
- US TSY TO SELL $75.000 BLN 8W BILL APR 03, SETTLE APR 08
