Investors Eye US Tariffs: What’s Next for the Markets?

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.4210-1.4420

Euro                 1.5310-1.5530

Sterling            1.8410-1.8630

WTI Oil (opening level) $69.85

The CAD/USD is opening at 1.4320 ( 0.6983 )

Rhetoric is a noun. The art of effective or persuasive speaking or writing, especially the use of figures of speech and other compositional techniques.

Announcements are coming out daily about the upcoming tariffs. It kind of frays your nerves.

So when you look at the numbers you can see a familiar trading territory for the USD/CAD trading a few points either side of 1.4300. Don't expect that to change until after the April 2nd deadline for the tariffs.

Headlines

·    US Q4 GDP (QoQ) was revised higher to 2.4%, above the estimated 2.3% while core PCE prices came in slightly below expected at 2.6% vs 2.7% est.  

·    US Initial jobless claims remained stable at 224k, with the 4-week average dipping to 224k. Despite storms, claims stayed low, but Pantheon Macroeconomics predicts an increase due to hiring and firing trends. Continuing claims fell to 1.856 million, suggesting a potential unemployment rate drop to 4.0%.

·    The cost of living in Tokyo rose more than anticipated from the previous month, keeping the Bank of Japan on track for further interest rate hikes. Consumer prices excluding fresh food rose 2.4% in March, while the overall level of inflation picked up to 2.9% from February’s 2.8%.

·    Investors and traders are cutting back risk ahead of President Trump’s plan to announce so-called ‘reciprocal tariffs’ on April 2, after slapping levies on imports of all automobiles into the country, pondering how the moves will impact inflation and growth in the US economy.

Key Points

·    Equities: US auto tariffs weigh; GM and Ford plunge; Tesla resilient; European autos hit; Asian markets cautious ahead of China PMI

·    Volatility: VIX rises; tariffs spark anxiety; implied volatility elevated; PCE inflation in focus

·    Digital Assets: Bitcoin retreats to $85K; altcoins sharply lower; BTC options expiry critical today; trade tensions dampen risk appetite

·    Currencies: USD weakened on auto tariffs and mixed data

·    Fixed Income: 10-year Treasury yields reverse lower after hitting one-month high

·    Commodities: Gold surged to a record high on trade war worries and momentum