The USD is lower as the trade war escalates with China adding 50% on top of 34% tariffs on US goods. US is charging 104% tariff on China goods. US stocks are lower. US yields are higher with the 10-year currently at 4.386% after the yield was as low as 3.86% on Friday. The yield is up 12.6 basis points. The US treasury will auction 10 year notes at 1 PM ET. It might be interesting to see what kind of foreign demand there will be. Yesterday the 3-year auction had a higher tail at 2.4 basis points (demand was not great).

Bessent is saying the China's retalitory tariff is unfortunate and that it is a loser for them. Tariff talks with Vietnam will take place on Wednesday.

Meanwhile, Trump says that the US has a lot of countries wanting to make a deal. He said that the tariff situation is a good situation. He announced that he will be announcing tariffs on pharmaceuticals soon.

Actions have consequences.

The dollar is lower vs all the major currencies:

  • EUR -0.81
  • JPY -1.0%
  • GBP-0.31%
  • CHF -0.97%
  • CAD -0.38%
  • AUD -0.64%
  • NZD -0.25%

The calendar is light with wholesale inventories scheduled to be released at 10 AM with expectations of 0.3% versus 0.8% last month.

Oil inventory data will be released at 10:30 AM. With crude oil inventories expected to rise by 1.421M barrels, distillates are expected to rise by 0.264M and gasoline inventories are expected to see a drawdown -1.513M .

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A snapshot of other markets shows US stocks are sharply lower as implied by the futures:

  • Dow industrial average down -760 points
  • S&P index down -88.52 points
  • Nasdaq index down -229 points

In the US debt market, yields are higher:

  • 2-year yield 3.797%, +5 point basis points
  • 5-year yield 4.055%, +14.1 basis points
  • 10 year yield 4.450%, +19.0 basis points
  • 30 year yield 4.913%, +19.9 basis points

In other markets, oil is down sharply on the lower global demand. Gold is sharply higher as it benefits from its safety as wars rage:

  • Crude oil -3 dollars and $97 or -6.63% at $55.62
  • Gold +$84 or 2.82% at $3066.84
  • Silver is up $0.78 or 2.60% and $30.58
  • Bitcoin up $30 and $76,234

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Source: Forex Live