The risk mood continues to improve with the S&P 500 up 37 points to a session high at 3748. Stocks are getting help from falling Treasury yields but that dynamic is also weighing on the US dollar, which is at the lows of the day.
The market is feeling better about the global economy and avoiding a trade war. The White House’s Navarro even said that China tariffs could be lowered or eliminated by Trump.
The daily charts are showing increasingly bullish reversal as fresh lows are rejected. The tariff threat obviously isn’t going away but the market is increasingly convinced that the stock market remains his top priority.
The biggest move remains CAD, which isn’t a surprise. It’s rejecting the breakout to the 20-year high but is now approaching the recent lows. That might prove to be a durable floor since Trump hasn’t cancelled tariffs but delayed them for 30 days. It won’t take long before we hear leaks saying things like ‘talks aren’t going well’ and that Trump is inclined to restart the tariffs.
USDCAD daily
