The markets were actually fairly calm yesterday after wearing the early storm from Gary Cohn’s resignation, White House officials helped steady the ship during the US session by suggesting that there are actually possible exemptions for certain countries with Canada and Mexico topping the list. There is talk that the President will sign the tariffs at 3.30 pm Washington time tomorrow, so it will be very interesting to see the market reaction as that approaches. Across the currencies we saw the initial downside risk trade abate as the day progressed with the UsdJpy and UsdChf both recovering from their initial downside moves. The market does seem to be playing a ‘wait and see’ game at the moment and with the big Non Farm Payroll data only a day away that’s understandable.
Looking ahead to todays sessions and it’s relatively quiet in the Asian day with just the Aussie and Chinese Trade Balance data due out for release. Things will start to get interesting today as we move into the London session with the ECB rate decision announcement due, once again no change is expected but traders will be very closely looking at the Press Conference which is due 45 minutes after the rate announcement with the market looking towards the dovish side of sentiment given recent events and increased uncertainty. Into the New York session and it’s very quiet in terms of fundamental data but all eyes will be on the news wires and any further details on the tariffs.
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