In the video above, I take a technical look at the EURUSD, USDJPY and GBPUSD to kickstart the US forex trading day. What levels are in play and why.
The Fed officials can now speak after the Fed decision on Wednesday:
- Fed Governor Adriana Kugler said first-quarter growth data reflected frontloading of activity ahead of anticipated tariffs, adding that it’s still unclear how trade policy will evolve. While she sees some upside risk to inflation from the tariffs, she noted the economy has remained resilient, giving the Fed room to continue its gradual approach to bringing inflation down.
- Fed Governor Michael Barr warned that President Trump’s sweeping new tariffs will likely raise inflation, slow economic growth, and increase unemployment later this year, putting the Fed in a tough spot if both inflation and joblessness rise. He emphasized that the full impact of the tariffs remains uncertain but noted they could cause lasting supply chain disruptions and strain small businesses. Barr reiterated the Fed’s “wait-and-see” stance, saying policy is well-positioned to adjust as conditions evolve.
A day after a UK trade deal, Pres. Trump is saying an 80% tariff on China “seems right” but added it would ultimately be up to Treasury Secretary Bessent (or Scott B as he posted) to decide. The US and China will meet in Switzerland this weekend.
Meanwhile, Senior Trade Advisor Navarro is on the wires saying:
- Markets should expect an active weekend with a steady flow of trade deals, which will be handled on a country-by-country basis. He highlighted the UK deal as a promising template for future agreements, especially in areas like agriculture. Regarding the EU, Navarro criticized recent retaliatory rhetoric and said while the EU is not low on the priority list, its actions—such as “firing shots across our bow”—are unfortunate and unhelpful to ongoing trade discussions.
Canada jobs data will be released at 8:30 AM ET, with employment change est at 2.5K vs -32.6K last month. THe unemployment rate is expected at 6.8% vs 6.7% last month.
US stocks in pre-market trading are higher as per the futures prices:
- Dow up 64 points
- S&P up 15.06 points
- Nasdaq +65 points
In the US debt market, yields are mixed with the short end lower, and the higher end higher:
- 2 year yield 3.863% -3.1 basis points
- 5-year yield 3.983%, -1.1 basis points
- 10-year yield 4.388%, +1.5 basis points
- 30-year yield 4.861%, +0.3 basis points
This week, the 3 and 10 year note auctions were solid, but the 30 year bond auction yesterday was not so great (positive tail and lower bid to cover).
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