Chartbook: March 6

Financial markets are back in risk-on mode after US President Donald Trump appeared to suggest that he could avoid putting tariffs on Chinese imports, backing off a campaign pledge to hit the country with a 60-percent levy. In a previously-recorded interview with Fox News that aired in the United States last night, Trump said “We have one very big power over China, and that’s tariffs, and they don’t...

• Trump talk. More comments from US President Trump overnight, but market reaction was relatively muted. Equities rose, while oil & the USD eased.• AUD & NZD. The USD pull-back is supporting AUD & NZD. Both are near the top of their respective 1-month ranges. AU CPI due next week.• BoJ hike? BoJ meets today. Another hike expected. We think the BoJ is ‘behind the curve’. Higher...

Financial markets are enjoying a period of placidity amid a relative lack of new headline risks related to the incoming administration’s trade, immigration, and fiscal policy plans. The global borrowing cost benchmark—the ten-year US Treasury yield—is holding near 4.62 percent, down from last week’s flirtation with the 4.8-percent threshold, equity futures are inching higher, and the dollar is eking...

• Trump vol. Markets were swung around by tariff news on Pres. Trump’s first day in office. But on net, equities rose while bond yields & the USD declined.• Delayed not derailed. Wide ranging reviews into US trade were announced. Findings due by 1 April. US trade tariffs still in the pipeline.• AUD & NZD. Softer USD has supported AUD & NZD. NZ headline CPI also a touch firmer than...

Currency traders are suffering from whiplash after Donald Trump made volatility great again in his first day back in office. The dollar is on the offensive and currencies like the peso, Canadian dollar, and euro are down after the president said he plans to impose 25 percent tariffs on products from Canada and Mexico on February 1. In an unscripted conversation with reporters last night, Trump said...

• US politics. President Trump is officially back in power. Reports tariffs could be implemented in a ‘measured way’ eased market nerves.• USD trends. Lack of follow through of election tariff threats exerted downward pressure on the USD. AUD & NZD bounced back.• Still watching. Various policies will be implemented. Vol. likely over period ahead. Short-term USD could ease helping AUD...

Financial markets are staging an across-the-board relief rally after the Wall Street Journal said president-elect Donald Trump intends to stop short of hitting major trading partners with tariffs on his first day in office. Instead, he plans to issue a directive that asks federal agencies to “investigate and remedy persistent trade deficits and address unfair trade and currency policies by other nations”....

An uneasy calm is settling on currency markets as traders brace for a “shock and awe” campaign on the policy front when Donald Trump takes office for a second time this afternoon. Ten-year Treasury yields are under pressure after last week’s softer-than-feared inflation and retail sales numbers, the dollar is retreating against most of its rivals on reports of a “very good” call between Trump and Chinese...

• Positive tone. US equities, bond yields, & the USD rose at the end of last week. US data remains positive. Markets also positioning for Trump 2.0.• US policy. Pres. Trump will be in the drivers seat. Will he announce a range of measures after coming into power or is too much expected?• Event Radar. US Pres. Inauguration (Tues), NZ CPI (Weds), BoJ & MAS meetings (Fri), & global PMIs (Fri)...

• Mixed signals. US equities failed to push on despite further falls in bond yields. USD/JPY continues to slip back. AUD & NZD lose a bit of ground.• Data & comments. US consumer spending holding up. Fed’s Waller encouraged by inflation trends keeps the door open to more policy easing.• AU jobs. Another robust Australian labour force report. Unemployment better than RBA expecting. China...