Forexlive Americas FX news wrap: Hope for a tariff deal dwindles, yuan hits record low

• Trump touts call with South Korea's Acting President, says he's waiting for China call
• Trump still hasn't signed document for additional 50% tariffs on China - report
• USD/CNH hits 7.40 for the first time as yuan continues to weaken
• White House: Trump directed team to have tailor-made trade deals with every country
• White House Press Secretary Levitt says tariffs on China have not gone into effect yet
• Bank of England Lombardellli: Tariffs are likely to depress activity
• Hassett: Getting ready to present a plan to Trump on who and when for tariff talks
• Italy's PM Meloni: Will be in Washington on April 17 to discuss tariffs with Pres. Trump
• Fed's Goolsbee: Tariffs are much worse than what we had been modeling
• Fed's Daly: We have time to tread slowly and carefully on policy
• USTR Greer: Costs from tariffs often rarely get down to the consumer
• USTR Greer: There is no particular timeline on Trump's negotiations on tariffs
• US treasury auctions off $58 billion of 3-year notes at a high yield of 3.784%
• Netanyahu takes an ultra-hawkish position on Iran's nuclear program
• Goldman Sachs: We're making a major shift in our USD view, EUR/USD forecasts hiked
• Canada March Ivey PMI 51.3 vs 55.3 prior
• German Economic Institute cuts 2025 GDP growth forecast to +0.1% from +0.8% in September
• JPMorgan now expects four consecutive ECB rate cuts

Markets:

• Gold down $2 to $2981
• S&P 500 down 1.6%
• US 10-year yields up 14 bps to 4.29%
• WTI crude down $2.31 to $58.39
• CHF leads, AUD lags

There was a singular theme in trading today and it was optimism that Trump could delay planned tariffs both due at midnight New York time, both the reciprocal ones on the broader world and the extra 50% on China. US equities opened strongly and that was followed by commodity currencies and some moderate yen selling.

But skepticism started to creep in, perhaps as some fearful equity holders began to use a 4% rally to sell into. The mood wasn't helped when Trump and the White House spokeswoman appeared to plead for China to call and make a deal. At the same time, the yuan weakened to a record low in something the market interpreted as a threat/response.

At the same time, there were no indications of a pause on broader reciprocal tariffs despite Trump and other officials talking about negotiations. The gameplan appears to negotiate trade deals with those tariff rates in place, based on the comments from various officials. That could obviously change but we now perilously close to the deadline.

It turned ugly in US equity markets with a 6% drop in the S&P 500 from the intraday highs and nearly 7% in the Nasdaq. AUD/USD fell to 0.5955 from a high of 0.6095 and USD/CAD rose 115 pips.

The euro and pound were better-behaved as they chopped sideways in 50-75 pip ranges while the yen held a broad bid.

A troubling development continues in the bond market as US yields -- particularly at the long end -- continued to rise. US 30s rose an additional 17 bps today and are now up 40 bps from yesterday's low and at the highest since February 20. There is fear that basis trades are blowing up or something has gone wrong in high yield or simply that a recession is coming that will blow up deficits further.

Overall, the game right now is to wait until midnight and go from there. If there is no help, we could have an ugly day on Wednesday.