The Trump Dump continues with global indices lower. Nevertheless, the premarket levels in the US are off their worst levels if that is a consolation. Yields are mixed. The USD is mixed with gains versus:
- GBP +0.60%
- CAD 0.16%
- NZD +0.09%
and declines versus:
- JPY -0.50%
- CHF -0.76%
- AUD -0.17%
The USD is above and below 0.0% vs the EUR.
IN the video, I will outline the key technical levels in play for the 3 major currency pairs to kickstart the US/NA trading day.
The news is fast and furious. Pres. Trump is on the Truth Social this morning whining that the Fed should “cut rates!”, that food prices are down (he did not single out eggs though), and that there is “NO INFLATION”.
Trump will speak with Japan PM Ishiba at 8 AM ET.
German economic minister said EU needs to avoid a trade war, but EU needs to be united. EU Sejourne said “We could decide to withdraw all American companies from European market”, calling it an economic bazooka.
There is some chatter of goods coming off the retaliatory list like bourbon in the EU. Who needs to tariff a good, if the consumer and “establisments” decide not to buy US bourbon?
Exporters to the US will hold back on tariffed goods coming in, leading to supply shocks for some goods. But you can be sure to hear about the price of eggs coming down, and oil prices moving lower because global growth will be slowing leading to lower demand and interest rates.
Farmers in the US want bailouts and subsidies which takes tariffs and shuffles it off to the farmers.
There will be winners (the upper 10%), but the lower to middle income consumers/small businesses will suffer the most with the tax disproportionately on the lower income.
Taking the morning snapshots, US stocks are sharply lower:
- Dow industrial average -821 points. The index fell -2231 points or 5.5% Friday
- S&P index -110 points. The index fell -322.44 points or -5.97% on Friday.. The index fell -962.82 points or -5.82% on Friday
- NASDAQ index -462 points
in the European equity markets
- German DAX -4.58%
- France’s CAC -4.76%
- UK’s FTSE 100 -4.45 points
- Spain’s Ibex -5.21%
- Italy’s FTSE MIB -5.64%
in the Asian Pacific session:
- Japan’s Nikkei felt -7.83%
- Hang Seng index -13.22%
- Shanghai composite index -7.34%
Looking at the US debt market:
- 2-year yield 3.589%, -8.0 basis points
- 5-year yield 3.658%, -5.2 basis points
- 10 year yield 3.979% -1.2 basis points
- 30 year yield 4.436% +4.7 basis points.
Looking at other markets:
- Crude oil futures $-1.79 at $60.20
- Gold $-8.68 or -0.30% at $3028.32
- Bitcoin $-1900 at $78,400
As stocks fall the major US currencies are mixed. What are the technicals telling traders?
