North American Summary and Highlights 7 April
Overview - The USD was firmer, led by USD/JPY as UST yields rose and equities saw some stabilization.
North American session
Equities saw a fairly neutral day after a weak start. A report that White House adviser Hassett said that Trump was considering a 90-day pause of tariffs other than China was quickly denied, and renewed weakness was seen after Trump threatened a 50% escalatory tariff on China on Wednesday if their 34% retaliation was not removed by Tuesday. A subsequent move back to neutral had no clear trigger, though talk of possible deals with individual countries persisted.
UST yields were significantly higher and lifted USD/JPY to 148 from 146. EUR/USD saw only modest moves, recovering from a dip below 1.09. EUR/GBP was firmer, with GBP/USD falling to near 1.27. AUD/USD was weak, falling below .60, while USD/CAD was little changed.
European morning session
The USD was slightly firmer through the European morning, mainly against the European currencies. EUR/USD lost more than half a figure to hit a low of 1.0950, and GBP/USD saw a similar decline to 1.2850. USD/CAD also gained around 30 pips to 1.4260, but USD/JPY, USD/CHF and AUD/USD were little changed. EUR/NOK was firmer, moving briefly above 12 to hit its highest since August last year. The main driver remained equity markets, with European markets cratering once again, losing more than 5% on average and driving bond yields lower.
Datawise, German industrial production fell 1.3% in February, correcting the 2.0% January rise. Eurozone retail sales rose 0.3% m/m in February. But the Sentix European investor confidence index unsurprisingly fell sharply in April, hitting its lowest since October 2023.