FOREX: USDJPY Extends Decline Amid Renewed Pessimism for US Equities

Mar-28 17:37

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* Fading risk appetite on Friday worked heavily in favour of the Japanese Yen, as slippage for US ...

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CANADA: USDCAD Unwinds Some Of Day's Climb On Further Tariff Delay

Feb-26 17:36
  • USDCAD sees some volatility on latest Trump tariff deliberations.
  • It had started to settle around 1.4320 for a 35 pip drop (although initially as low as 1.4300) on Trump saying Canada and Mexico tariffs are to go into effect Apr 2, although has lifted a touch with proposed 25% tariffs on the EU.
  • The April 2 date is a further kicking back of tariff deadlines that had already been pushed back to March dates, seemingly rolling it into the broader report due on reciprocal tariffs.
  • The move unwinds most of the day’s climb, having earlier touched 1.4365 to push closer to resistance at 1.4380 (Feb 10 high).
  • Support is still someway lower at 1.4151 (Feb 14 low).

US: Trump Delivers Extended Press Conference At Cabinet Meeting

Feb-26 17:34

A flurry of comments from US President Donald Trump hitting wires as he speaks with the press at a Cabinet meeting at the White House. 

  • Elon Musk, opening the meeting, says he will send another email to federal workers seeking justification for their ongoing employment. Trump endorses Musk's statement saying he's, "not happy about federal workers who did not respond." The comments appear aimed at heading off reports of a rift between the Trump admin and Musk's Department of Government Efficiency.
  • Trump says, "will be talking to cabinet secretaries to do their own dirge of federal workers." Echoing a recent memo issued by the White House OMB and Office of Personnel Management, he says staff needs to be reduced because we're "bloated" and "sloppy". See earlier bullet: US: OMB Sets Out Plans For Large-Scale Staff Cuts And Govt Reorganisation - BBG
  • Trump says that on April 2, "tariffs will go on, not all but a lot of them" saying you're going to see "something amazing" and reiterating that his tariff regime is designed to reduce flows of fentanyl and restore "respect" for the US.
  • Trump reiterates he has a "great relationship" with Chinese President Xi Jinping and says he wants US investment in China and Chinese investment in the US. 
  • Trump says he wants his "gold card" for US citizenship to come into effect in "about two weeks".

US OUTLOOK/OPINION: GDP Revisions Come Into View [1/2]

Feb-26 17:24

The upcoming US economic calendar is backloaded, with the second release for Q4 national accounts on Thursday before the January PCE report on Friday. 

  • Real GDP growth is seen confirming what was at the time a softer than expected 2.3% annualized in Q4, whilst there will also be a first estimate for real GDI growth after 2.1% in Q3.
  • Much of the relative GDP weakness in Q4 after two quarters averaging 3.0% came from a large drag from inventories. It should continue to show signs of robust domestic demand after personal consumption increased 4.2% annualized in the advance release (Bloomberg cons 4.1).
  • However, January’s monthly report (on Friday) is likely to show consumption got off to a much weaker start of 2025. Recall that retail sales were far weaker than expected in January as they slid -0.9% M/M (cons -0.2) along with an even larger miss for the control group at -0.8% M/M (cons 0.3) to more than unwind the previously strong 0.8% M/M increase in December.
  • As such, the Bloomberg consensus sees real personal spending growth of -0.1% M/M in Jan after 0.4% in Dec.
  • Further within the details, JPMorgan expect nominal personal income growth of 0.4% M/M (to have been boosted by the 2.5% Cost of Living Adjustment for Social Security, with employee compensation rising 0.3% M/M. That should see real disposable personal income increase 0.1% M/M. 
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