What impact will Trumps 'Liberation Day' have?

Good morning

Here we are, Trumps ’Liberation Day’.  His actual announcement isn’t until this evening, 9pm UK time to be more precise, so there is a chance we’ll see a continuation of the tight ranges we’ve witnessed recently in the majors throughout the day, until we get to the main event.

At one stage yesterday it did look as though those ranges might break, GBPUSD traded down to the 1.2880 area, I was watching the 1.2865/70 area which has really been the low since early March, but weaker than expected JOLTS jobs number and ISM manufacturing PMIs sent USD lower once again, and it wasn’t too long before we back at 1.2920, an area that has been something of a pivot point for the past couple of weeks.  EURUSD also dipped, reaching 1.0780 briefly before regaining 1.0800.  GBPEUR had been as low as 1.1935 but ended the London session at 1.1965.

Interesting moves overnight as both AUD and NZD pushed sharply higher.  GBPAUD is now at 2.0490, GBPNZD at 2.2510, down from peaks around 2.07 and 2.28 respectively.  I’ve not seen a sensible reason for the shift other than some hope that they will be spared in Trumps tariff overhaul.  Stronger than expected Aussie building permits overnight surely can’t be responsible. 

Russia have said they won’t back a peace plan while Zelensky is in power.  I presume instead they want to put in their own pro-Moscow guy who would welcome Russia with open arms.  Regardless, US are warning of sanctions on third party countries who purchase Russian oil and gas if it seems that Russia are stalling the peace process. Meanwhile US are reported to be sending more ships and planes to the Middle East as they continue to hit Houthi forces in Yemen.

In football, Arsenal beat Fulham to bring them within nine points of Liverpool at the top of the table.  Forest beat Man Utd to help their top-four chances, now eight points clear of fourth placed Chelsea, while Wolves beat West Ham.   Those latter two results certainly helped Spurs as neither Man Utd or West Ham gained any league positions.  Plenty of action this evening including the Merseyside derby.  Brighton v Villa could be an interesting match, with both teams still very much in the running for a European place.

US ADP employment numbers out this afternoon, and we’ll hear from a couple of ECB speakers through the day.  Trump speaks at 9pm, so much uncertainty here, I will be looking at some short dated options to provide cover for some worst case outcomes.  They’ll be pretty tailored to individual client position so best let me know if you’re interested.

Have a great day…

-  11.30 ECBs Schnabel speaks

-  13.15 US ADP employment

-  15.00 US factory orders

-  15.05 ECBs Lane speaks

-  21.00 Trump’s ‘Liberation Day’ tariff announcement

-  21.30 Feds Kugler speaks

-  01.30 AUS financial stability review

-  02.30 AUS trade balance

-  02.45 China caixin services PMI