Stock and commodity markets regain some of yesterday’s strong losses on hopes that the USA will cut a deal soon with Canada and Mexico on the new tariffs.

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1. The impact of President Trump’s imposition of 25% tariffs yesterday on Canada and Mexico and these countries’ announcements of retaliatory tariffs was immediately apparent, with stock markets globally, especially in the USA, making strong drops. The tech-based NASDAQ 100 Index traded below its 200-day moving average at one point, despite reaching a record high just a few weeks ago. Risk assets everywhere were hit. However, things turned around as they often do in high-volatility environments, and stock markets and commodities have seen reasonable recoveries, maybe helped by statements from the US Commerce Secretary Lutnick that he expects a compromise deal on tariffs between the USA and Canada and Mexico tomorrow. Lutnick is also considering tariff exemptions for certain goods which are USMCA compliant.
2. President Trump defended his economic policy in a speech to Congress a few hours ago, stating that Ukrainian President Zelensky is now willing to sign a deal giving the USA mining rights in Ukraine. He also stated that Russia is indicating to him that it is prepared for a peace deal. Ukrainian President Zelensky has also adopted more conciliatory rhetoric in recent days. This suggests that President Trump is advancing towards a serious negotiation with Russia to end the war after suspending all military aid to Ukraine earlier this week. Russia has also offered to broker talks between the USA and Iran.
3. In the Forex market, the EUR/USD and GBP/USD currency pairs are looking bullish after rising strongly to reach new multi-month highs. Both are holding their value. The Euro has been the strongest major currency since today’s Tokyo open, while the Canadian Dollar has been the weakest, putting the EUR/CAD currency cross in focus. The Canadian Dollar and Mexican Dollar made gains against a weaker US Dollar yesterday, putting the USD/CAD and USD/MXN in focus too.
4. Natural Gas futures made their highest daily close yesterday in over 2 years, which will be of interest to trend traders.
5. Gold is holding up well despite widespread strong selloffs in commodities, strongly outperforming Silver despite the typical strongly positive correlation between the two precious metals. However, it is now trading back above $2,920 although it is still off its record high made recently above $2,950.
6. Bitcoin is falling and looking weak.
7. Australian GDP data came in as expected, showing an annualized GDP growth of 1.6%.
8. There will be two important data releases today:
   1. Swiss CPI (inflation) which is expected to show a month-on-month increase of 0.5%.
   2. US ADP Non-Farm Employment Change Forecast
   3. US ISM Services PMI

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