From Marc to Market:
Overview: The on-again off-again US tariffs have raised the level of uncertainty and lack of visibility that itself has become a market factor. The dollar has begun the new week, which could see US steel and aluminum tariffs announced Wednesday, softer, but mostly consolidating within the pre-weekend range. Most of the G10 currencies are firmer, though we note the potential downside reversal in sterling. Norway's higher than expected CPI has dampened rate cut hopes and lifted the krone by 1%. Emerging market currencies are mostly lower.
After rising 2.5% last week, the MSCI Asia Pacific Index traded heavier. Despite mainland investors buying a record amount of Hong Stocks today, the Hang Seng fell 1.8% and the index of mainland shares that trade in HK tumbled 2.1%. Among the large bourses, Australia, New Zealand, and South Korea managed to post small gains. Europe's Stoxx posted its first weekly loss of the year last week (~-0.70%) and is off around 0.3% in the European morning. US index futures are giving back their pre-weekend gains. Benchmark 10-year yields played catch-up in Asia, with the 10-year JGB yield rising five basis points and Australia's rising by almost four basis points. However, after surge, European yields are mostly 2-3 bp lower today, while the 10-year US Treasury yield is four basis points lower to slip below 4.26%. Last's week saw a five-month low near 4.10% and reached a high last Thursday near 4.34%. For the fifth session, gold is trading in narrow range, mostly within the range set last Tuesday (~$2882-$2928). Meanwhile, April WTI is consolidating in a roughly $66.50-$67.35 range. It approached a six-month low last week near $65.20 before stabilizing. It has not been above $68.25 since the low was set.
USD: The Dollar Index fell every day last week for the first time since the first week of March 2024. It is trading inside Friday's range today (~103.45-104.00). A move above 104.25 helps stabilize the technical tone. It is oversold but sentiment has turned, and interest rate differentials have moved against it....
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