Headlines:
Markets:
- AUD leads, USD lags on the day
- European equities higher; S&P 500 futures up 0.5%
- US 10-year yields down 1.2 bps to 4.219%
- Gold up 0.7% to $3,261.73
- WTI crude down 0.5% to $58.95
- Bitcoin up 0.5% to $97,012
As we are starting to see with tariff negotiations, there just aren’t any easy deals.
Japan is the one stealing the headlines in European trading today, with reports and some pushback against what the US is proposing during tariff discussions. It is being reported that the US is reluctant to drop the reciprocal 10% tariffs, alongside auto, steel, and aluminum tariffs as well.
That’s hardly an optimistic sign on how Trump is setting his team to approach negotiations in general.
For now, Japan is hitting back at that and saying that they are firmly opposing the US’ proposal. Finance minister Kato even went as far as saying that they could even look at the country’s Treasury holdings as “a card” in negotiations, but “whether or not we use that card is a different decision”.
The next discussion will only take place after the middle of May. So, that’s the can being kicked down the road for yet another two weeks. So much for quick progress, eh?
The stalemate serves as a warning for other countries as well, with the clock continuing to count down. Tick tock, tick tock.
S&P 500 futures were up 0.8% earlier in the day before paring a chunk of that to be up just 0.2% during the session. Overall, the animal spirits are still holding up but we’ll see if that is enough to keep the win streak going in Wall Street to wrap up the week.
In FX, the dollar is once again offered amid the less than ideal trade headlines. EUR/USD pushed up above 1.1300 to 1.1340 while USD/JPY is down 0.6% to 144.50 currently, after hanging around 145.20 in the handover from Asia.
The euro is also getting some slight help from a hotter-than-expected Eurozone core inflation estimate for April. The jump was largely due to services inflation and that will give the ECB something to think about before the likely next rate cut in June.
Besides that, USD/CHF is also marked down by 0.6% to 0.8238 while AUD/USD is seen up 0.8% to 0.6434 on the day.
In other markets, gold is up again in a push to $3,260 levels while bond yields are slightly down with 10-year Treasury yields in particular holding just under its 200-day moving average of 4.22% for the time being.
It’s on to the US jobs report next before eyeing more trade/Trump headlines before the weekend.
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