From Marc Chandler at Bannockburn Global Forex:
Overview: The postponed US tariffs on Canada and Mexico have gone forward and China faces its second 10% tariff increase in two months. The dollar is mixed. The Swiss franc and Japanese yen are the strongest of the G10 currencies, up around 0.45%-0.60% in late European morning turnover, but the Canadian dollar is no slouch and is up about 0.35%. Canada (and China) have announced what are seen as mild initial retaliatory measures, while Mexico is expected to make an announcement later day. The euro tested its recent highs near $1.0530. Japan's Prime Minister Ishiba denied US claims that it was seeking trade advantage in the currency market. Most emerging market currencies are firmer, including the Chinese yuan. The Mexican peso led the emerging market currencies lower yesterday and is the weakest today, off about 0.8%.
Stocks do not apparently like the tariffs. Nearly all the markets in the Asia Pacific region fell. Europe's Stoxx 600 is off more than 1%, which if sustained would be the largest drop so far this year. US index futures are trading softer. A poor reception to the 10-year bond auction in Japan saw the 10-year JGB yield edge up to almost 1.41%. European benchmark 10-year yields are off mostly 2-3 bp, with the 10-year Gilt yield off five basis points to 4.50%. The 10-year US Treasury yields is up one basis point to almost 4.17%. Gold's recovery is extending. It fell 2.65% last week, the first weekly loss of the year. It was up 1.2% yesterday and is up about 0.75% today near $2915. OPEC+ confirmed that the scheduled increase in output will begin next month. April WTI, which traded above $70 yesterday is below $68 now to new three-month lows.
USD: Yesterday's losses saw the Dollar Index surrender more than half of the gains scored in the second half of last week....
....MUCH MORE
