It increasingly looks like we are now heading into the period revolving around April 2nd and some certainty on tariffs. My suspicion is that we will get not such certainty and that can continue to way of the markets, confidence and the economy.
Notwithstanding that some things to keep an eye on
FX
EURUSD has completed a clear double top that suggests a move towards 1.0695-1.0700. Even If that happens that still fits with the 2022 analog. However, if we head below there it suggests a danger that we may actually be looking at a turn in EURUSD rather than a consolidation/correction.
USDCNH is starting to look like a double bottom with a neckline at 7.3075. A close above would suggest a re-test of the major highs at 7.3750. This as Chinese 2 and 10 year yields are softening again and the HSCEI index is moving lower
In Japan we hit new highs in the trend on 2 and 10 year yields which should be supportive the JPY. The Nikkei made marginal new highs in this move before reversing lower. However, USDJPY still trades to yield spreads and the 5-year US-Japan spread ticked slightly higher overnight providing short-term support
Fixed Income
The US 5-year yield held its pivotal short-term level at 4.124% yesterday and the 10-year yield held 4.38% leaving us continuing to trade in what looks more like a consolidation after the recent yield fall than a reversal. On the downside the levels to watch are 3.95% and 4.17% respectively
Equity markets
The levels to watch on ESA are 5,864 to 5,875 on the topside which should be good resistance and 5,770 on the downside. I still view this as a correction to the downside 10.6% fall and not a reversal.
SX5E is in danger of posting a bearish outside day IF it closes today below 5,422 and DAX below 22,913.
Commodities
The double bottom on HGA remains fully intact and the target is $550
On CL1 that double bottom is also intact targeting at least $71.25-$71,50
Gold continues to consolidate.
