"Tariff Tennis" is the name of the game, and the markets are volatile. U.S. President Donald Trump agreed with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum to postpone 25% tariffs by a month at the last minute, while China is still set to face an additional 10%. Trump stated he would speak with China's Xi Jinping within the next 24 hours.
China quickly responded with retaliatory measures, including a 15% tariff on U.S. coal and liquefied gas, 10% on U.S. oil and agricultural machinery, an antitrust probe into Google, and export controls on tellurium and tungsten—key inputs required for chip production. The markets reacted with a broad risk-off move as risk-sensitive FX, like AUD and NZD, extended losses. S&P futures and Asian equities fell, commodities sold off, and oil dropped 2%.
In other markets, Bitcoin sits below the psychological $100K level at $99,301.92, while Ether fell another 3.5% to $2,719.77. The yield on 10-year Treasuries was little changed at 4.56%. Australia’s 10-year yield advanced four basis points to 4.42%, while Japan’s 10-year yield climbed 2.5 basis points to 1.270%. Gold opens at $2,813 per ounce, just below the $2,830 high.
Back in the central bank world, Federal Reserve Bank of Chicago President Austan Goolsbee stated that the Fed should proceed cautiously in lowering borrowing costs amid mounting uncertainty introduced by the Trump administration. Others, including the Fed’s Raphael Bostic, Mary Daly, and Philip Jefferson, are set to speak later today.
Data-wise, we have U.S. factory orders, U.S. durable goods, and Alphabet earnings. Don't take your eyes off the Tariff Headlines—these markets are exciting…
