[XM Foreign Exchange Decision Analysis]: US Trade Representative provides Trump with new tariff options, and risk aversion helps gold prices continue to rise

Basic news

On Wednesday (April 2 Beijing time), spot gold trading was around 3112.32, and gold prices fell on Tuesday due to profit-taking, but still hit an all-time high of 3148.85; investors turned to safe-haven assets before US President Trump planned to announce a xmserving.comprehensive tariff on countries with the United States that had a trade imbalance. U.S. crude oil traded around $71.23 per barrel, and oil prices fell on Tuesday as traders feared that the reciprocal tariffs announced by U.S. President Donald Trump on Wednesday could exacerbate the global trade war. However, Trump's threat to impose secondary tariffs on Russian oil and attack Iran has exacerbated market concerns about supply, thus limiting oil prices to fall.

Stock and Nasdaq both closed higher on Tuesday, with investors' anxiety leading Wall Street to a turbulent day before the Trump administration was about to announce tariffs.

In recent weeks, financial markets have been volatile as investors assess the economic impact of President Trump's extensive tariff plan, which has raised concerns about a slowdown in the U.S. economy and rising inflation. Trump will announce his tariff plans at an event held in Rose Garden on Wednesday, which is currently scheduled to be held at 4 p.m. Eastern Time (4:00 Beijing time on Thursday), and some of the uncertainty that has shrouded the market is expected to dissipate afterwards.

However, although investors welcome the clarity of specific tariff measures, the overall environment remains highly uncertain, which makes it difficult for the market to agree on the direction. NatixisInvestmentManager"The fact is that market confidence has been diluted and position allocation is still quite light. I don't think we will get the sort of clarity that investors and business leaders want," he added. “At the end of the day, we spent a lot of time talking about tariffs, but the bigger problem is that we are facing an economy that has not fully operated.” For now, Melson said, this means investors are “stand still and waiting for the opportunity.”

This attitude was reflected in the three major Wall Street indexes on Tuesday. The three major stock indexes fluctuated in the positive and negative range most of the day, and did not close with good momentum until the afternoon.

The rises in the Nasdaq and S&P 500 were driven by a rebound in technology stocks, which suffered severely in the first few weeks of this year.

Tesla led the big tech stocks higher, with the xmserving.company up 3.6% before its first-quarter auto delivery report on Wednesday. Other "Big Seven" stocks such as Amazon, Microsoft and MetaPlatforms also rose, with an increase of between 1% and 1.8%. However, the decline in medical and airline stocks has dragged down the S&P index.

JP Johnson & Johnson, the worst-performing stock in the S&P 500, fell 7.6% and dragged down the wider health care sector by 1.8%, the decline at the bottom of the S&P 11 sectors. Delta, American and Southwest fell between 2.4% and 5.9%, after Fruit analysts downgraded their airline stock ratings on concerns that economic uncertainty could disrupt business and retail travel demand.

Gold market

Gold prices fell on Tuesday due to profit-taking, but are still close to their all-time highs. Investors turn to safe-haven assets before U.S. President Trump plans to announce full tariffs on countries with trade imbalances with the United States.

Spot gold was $3113.43 per ounce, down 0.3%, hitting an all-time high of $3148.88 earlier in the day. U.S. gold futures closed down 0.1% to $3,146. "It's not surprising to see a little profit-taking, especially given that the market has become quite overbought, I haven't seen any changes in fundamentals... It's a perfect storm for gold," said Peter Grant, vice president and senior metals strategist at ZanerMetals. "The market and consumers are waiting for the tariff details Trump plans to announce on Wednesday. White House aides have drafted a plan to impose a tariff of about 20% on most U.S. imports, The Washington Post reported on Tuesday.

Gold has historically been seen as a hedging tool for geopolitical and economic uncertainty. Gold closed on Monday with its strongest quarterly performance since 1986 and broke above $3,100 an ounce, becoming one of the most significant gains in precious metals history. From a technical perspective, gold's relative strength index (RSI) is highAt 70, it indicates that the gold is in an overbought state.

The U.S. Bureau of Statistics said in a Tuesday report that as of the end of February, the number of job openings in the United States dropped to 7.568 million, xmserving.compared with the number of economists' expectations of 7.616 million. Investors are still waiting for Friday’s non-farm jobs report to find clues to the Fed’s trajectory of interest rate cuts.

Silver fell 1.4% to $33.6 per ounce; platinum fell 0.8% to $984.64. Palladium fell 0.2% to $981.0. Oil market

Oil prices fell on Tuesday as traders feared that the reciprocal tariffs announced by U.S. President Donald Trump on Wednesday could exacerbate the global trade war. However, Trump's threat to impose secondary tariffs on Russian oil and attack Iran has exacerbated market concerns about supply, thus limiting oil prices to fall.

Brent crude oil futures closed down 0.37% at $74.49 a barrel. The highest intraday price is over $75 per barrel. U.S. crude oil futures fell 0.39% to $71.20. On Monday, the contract closed at a five-week high.

瑞穗能源期货主管BobYawger说，"还有不到24小时，市场变得有些惶恐不安，"他补充说："我们可能会失去一些墨西哥、委内瑞拉和加拿大的供应，但需求的破坏绝对有可能超过这些供应。"

路透3月份对49位经济学家和分析师进行的调查预计，今年油价将继续受到美国关税以及印度等国经济放缓的压力，同时OPEC+将增加供应。

Trump said on Sunday that he would impose secondary tariffs of 25% to 50% on Russian oil buyers if Moscow tries to stop efforts to end the Ukrainian war. The imposition of tariffs on oil buyers in Russia, the world's second largest oil exporter, will disrupt global supply and harm Moscow's largest customers.

Trump threatens to impose similar tariffs on Iran and will bomb Iran if Tehran does not reach an agreement with the White House on its nuclear program. The market will focus on the OPEC+ Ministerial xmserving.committee policy review meeting held on April 5. Sources told Reuters that OPEC+ is expected to increase production by 135,000 barrels per day in May. OPEC+ has agreed to make a similar increase in production in April.

Meanwhile, five analysts surveyed by Reuters averaged estimates that U.S. crude oil inventories fell by about 2.1 million barrels in the week ended March 28.

Foreign exchange market

The yen rose against the dollar on Tuesday after U.S. economic data showed that manufacturing and labor markets performed weakly before the Trump administration announced reciprocal tariffs on Wednesday.

The U.S. manufacturing industry shrank in March after two consecutive months of expansion, while the factory input price index reached its highest level in nearly three years. At the same time, there are growing concerns about how much tariffs will lead to prices for consumers and producers.

The Ministry of Labor report also shows that 2The monthly job openings have been reduced to 7.568 million. "It is obvious that manufacturing has been hit by the first to be affected by changes in Trump's protectionist policies, and other areas of the economy may be affected in the xmserving.coming months."

The market was in scrutiny before Trump announced reciprocal tariffs on Liberation Day. Investors are cutting exposure in the forex market as a result of conflicting claims about the scope, size and duration of the government’s proposed trade measures, waiting for details to be announced,” he added.

In the current environment, investors believe that the yen is safer than the dollar, as U.S. tariffs may also harm the U.S. economy.

While the market basically consolidated within the previous trading day range, the U.S. dollar fell 0.37% against the yen to 149.41, The euro fell 0.65% to 161.14 yen.

The number of weekly initial jobless claims and monthly non-farm jobs data, which will be released later this week, may give the market a better idea of ​​how the uncertainty of U.S. trade policy has hurt the economy. The U.S. dollar index is flat at 104.25.

Marc Chand, chief market strategist at BannockburnGlobalForex style="display:none;">xmserving.comler said, "The stock market sell-off has indeed dragged down bond yields, which in turn dragged down the dollar. When interest rates fall, the dollar's rise is unsustainable. ”

Trump announced later on Sunday that all countries will face new tariffs this week, but he did not provide specific details. Earlier, he talked about the 25% tariff on European goods. The Washington Post reported on Tuesday that White House aides had drafted a proposal to impose about 20% tariffs on most U.S. imports.

EU Executive xmserving.committee President von der Leyen said the EU is willing to negotiate trade with the United States, but will take strong countermeasures if necessary.

The euro fell 0.29% to $1.0786, up 4.5% in the first quarter of this year, the first quarter of 2022 The strongest quarterly performance since the fourth quarter was largely due to Germany's xmserving.commitment to significantly increase fiscal spending.

Meanwhile, investors have stepped up bets on the ECB's future rate cuts due to concerns about tariff impacts and weak economic data, resulting in lower Treasury yields and the euro.

Among other currencies, the Australian dollar rose 0.4% to $0.6271, following the RBA's unchanged interest rates, in line with expectations. The Australian dollar hit $0.6217 on Monday, its lowest level since March 4.

International News

The Office of the U.S. Trade Representative offers new tariff options for Trump

The Office of the U.S. Trade Representative (USTR) is preparing a new tariff option for Trump, namely, to impose xmserving.comprehensive tariffs on some countries, and the tax rate may not be as high as the 20% general tariff.

The U.S. Republicans plan to force permanent tax cuts to skip Congressional regulations Experts

U.S. Senate Republicans are fully promoting Trump's tax cut strategy. Senate leadership and Trump hope to permanently make the 2017 tax cut without saying how much it will increase. Now they claim that it only takes Lindsay Graham, chairman of the Budget xmserving.committee, to decide to implement the plan. Democrats strongly opposed the proposal in a meeting with statutory experts, and a bipartisan meeting was scheduled to be held on Tuesday on the issue. Republicans now claim that there is no need for the opinions of statute experts at all. According to Republican Whip John Barrasso, Graham may release the text of the budget resolution as early as Tuesday.

Zelensky said that Ukraine and the United States are emphasizing that it does not involve NATO issues on consultations on mineral agreements

On April 1 local time, Ukrainian President Zelensky said that Ukraine and the United States legal teams are currently negotiating on mineral agreements. He specifically pointed out that the agreement does not involve NATO issues. Zelensky said lawyers from both Ukraine and the United States are discussing the new draft agreement, and the relevant results may be determined in the next few days. He said there is no NATO problem in the agreement and there is no such situation. Previously, according to xmserving.comN, U.S. President Trump said that Ukraine allegedly demanded signing a mineral agreement in exchange for joining NATO.

Low water levels hinder shipping on the German Rhine, and German businesses may face supply problems

xmserving.commodity traders said Tuesday that due to the recent dry weather and low water levels, cargo ships were unable to sail on the German Rhine with an additional surcharge on the basis of the usual freight. Traders say low water levels hinder shipping in all rivers south of Duisburg and Cologne, including the blocking point Kaub. In Kobu, the cargo ship can only be loaded by 50%. Shallow water means that ship operators charge freight surcharges to xmserving.compensate for losses on ships’ unloaded navigation, which increases the cost of cargo owners. They said the weather forecast shows that the river catchment area is dry next week, meaning no improvement will be seen in the near term. The Rhine River is an important waterway for transporting xmserving.commodities such as grain, minerals, ore, coal and petroleum products including heating oil. In the summer of 2022, German xmserving.companies face supply bottlenecks and production problems due to abnormally low water levels in the Rhine due to drought and heat waves.

Several U.S. federal agencies have launched new "delayed resignation" programs to encourage employees to leave

At least five U.S. federal agencies provide employees with new "delayed resignation" opportunities, which is the latest attempt by the Trump administration to cut the size of the U.S. government. On Monday night local time, employees of the Ministry of Housing and Urban Development and Agriculture received an email and were told they could choose to quit while continuing to enjoy several months of paid leave. payCommunications department employees also received similar notices about the program Tuesday morning. A spokesman for the General Affairs Administration said the postponement of resignation plans are also open to eligible employees, and the Ministry of Defense said its civilian staff received a similar proposal last Friday. Not all USDA employees are eligible for the program, depending on whether their position is considered a critical position, according to emails received by USDA employees.

United States Agency for International Development will fire all overseas local employees and U.S. diplomatic officials

Musk's cost-cutting team is xmserving.completing the disbandment of U.S. Agency for International Development, ordering the firing of thousands of local employees as well as U.S. diplomats and civil servants sent overseas. The U.S. Agency for International Development’s Human Resources Office told the Regional Bureau during a conference call that the layoff notice will be sent to all more than 10,000 locally employed foreigners, effective from August, people familiar with the matter said. The notice will also be sent to U.S. diplomatic officials sent to work abroad. Thousands of U.S. Agency for International Development's own employees were suspended. They received a notice of layoffs on Friday. Hundreds of contractors were fired and more than 5,000 projects were terminated. According to the nonpartisan Congressional Research Service, U.S. Agency for International Development has missions in more than 60 countries, with most of its funds being spent on humanitarian aid and health programs.

The number of job vacancy in the United States fell in February, and the number of layoffs remained basically the same.

The number of job vacancy in the United States fell in February, but the number of layoffs did not change much, further proving that the labor market is just slowly cooling down. The number of job openings in February fell from 7.76 million revised in January to 7.57 million, with economists' median estimate of 7.66 million, according to the JOLTS data released by the Bureau of Labor Statistics on Tuesday. Vacancies in retail trade, finance, accommodation and food services have decreased. The recruitment rate remained unchanged at 3.4% in February, close to the lowest level since the outbreak. Although the layoff rate is basically consistent with the pre-pandemic level, news of layoffs has been increasing in recent months due to federal government layoffs. Statistics for March are scheduled to be released on Thursday. The resignation rate remained flat at 2%, down from the 3% high reached in 2022. OPEC+ ministers will meet on Thursday and may approve further increase oil production starting from May, sources said. A source said the meeting will consider plans for further production cuts in some member states to xmserving.compensate for production exceeding quotas. Two other sources said OPEC+'s plan to continue to lift the latest oil production cut agreement is expected to remain unchanged in May.

Domestic News

Increase efforts to expand and exert efforts to demonstrate effectiveness "two new" policies to stimulate consumer vitality

On April 1, the National Development and Reform xmserving.commission showed that in the first two months of this year, the "two new" (consumer products trade-in and large-scale equipment update) policies further exerted effectiveness, driving the purchase investment of equipment and tools to increase by 18% year-on-year, and the total retail sales of consumer goods year-on-yearIncreased by 4%, and continue to play an important role in expanding consumption, stabilizing investment, promoting transformation and benefiting people's livelihood. The National Development and Reform xmserving.commission pointed out that the "two new" policies have effectively stimulated consumption vitality. This year, the scale of funds for old-for-new consumer goods supported by ultra-long-term special government bonds increased to 300 billion yuan, doubled xmserving.compared with last year's funding scale. The first batch of 81 billion yuan of funds was issued as soon as possible on January 6, continuing the work foundation in 2024, and expanding the scope to support the purchase of new digital products such as mobile phones, tablets, smart watches and bracelets.

Incentive enterprises to implement paid annual leave to allow residents to "have leisure" to consume

Recently, the "Special Action Plan to Boost Consumption" issued by the General Office of the CPC Central xmserving.committee and the State Council have involved a number of measures to protect residents' rest and leave rights. This is not only an important part of optimizing the consumption environment, but also a necessary measure to protect the rights and interests of workers. In the opinion of the interviewed experts, whether it is a family trip that takes advantage of the spring and autumn vacations of primary and secondary schools, or a daily trip to residents, it is inseparable from the effective implementation of the paid annual leave system. At present, the paid annual leave system needs to provide positive incentives to enterprises and promote the initiative to implement it.

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