MXN

Some semblance of calm is returning to financial markets this morning after US Commerce Secretary Howard Lutnick suggested that the administration could agree to relax tariffs on Canada and Mexico by this afternoon. Equity indices plunged, Treasury yields tumbled, and risk-sensitive currencies sold off during yesterday’s session as investors expressed concern over the growth-negative aspects of the Trump administration’s tariff measures, but reversed higher when Lutnick’s interview with Fox News aired after the North American close, and have added to their gains this morning on similar comments provided during an interview with Bloomberg. Currency traders remain on tenterhooks however, especially...

The dollar is down sharply against most of its major rivals this morning as bets on the ‘US exceptionalism’ trade are unwound and investors throw money at the euro area ahead of an expected rise in government spending on defence. Defying consensus forecasts, on a year-to-date basis, the most widely-quoted measure of the greenback’s value—the DXY “Dixie” dollar index—is now down 2.3 percent, while the euro is up 1 percent, and the Japanese yen is sitting on top of the major-currency leaderboard with a near-4-percent gain. Stagflation worries are suddenly stalking the US economy and financial markets. Friday’s personal spending...