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An Axios report says the Trump admin is considering allowing the richest Americans’ tax rates to rise in return for cutting taxes on tips.

There isn’t much here as it says “some White House officials believe” it would be a good idea. Note that this would have to get through Congress and it would take the top rate to 39.6% from 37% and also lower the threshold for when that kicks in.

Aside from the obvious political problems in raising taxes for the rich, I can’t understand how removing taxes on tips might work as it presents an infinite number of loopholes.

This article was written by Adam Button at www.forexlive.com.

• Told Iran they need to make a decision
• Iran is on his list of things to watch
• Is looking at reports of Iranian drones used in Ukraine

Trump gave Iran some deadlines about its nuclear program at the start of his term and this was reportedly the response:

1. Iran reaffirms that it will not negotiate directly with the United States, especially under the policy of maximum pressure, and it rejects the American approach categorically.

2. Iran states that it does not negotiate on behalf of any regional power, and that Iran does not dictate the foreign policy of other nations or groups, including Yemen’s Ansarallah, which is an independent ally.

3. Iran states that it will not accept Trump’s ‘unrealistic conditions’, and that the U.S. demands were so extensive that they cannot be entertained even hypothetically.

4. Iran warns unequivocally that any military or hostile action, whether by the United States or any of its ‘stooges’, will be met with an Iranian response that will encompass all U.S. military assets in the Middle East.

It’s really hard to guess where this is going.

This article was written by Adam Button at www.forexlive.com.

It’s a tough one in the equity markets today with the S&P 500 now down 2% and the Nasdaq down 2.7%.

Tariff angst is high ahead of Wednesday’s planned Trump tariffs. It’s very tough to estimate exactly what’s priced in for tariffs but if there is any room for de-escalation, the stock market today is making a good case.

For all the Trump bluster, he was beholden to the stock market in his first term. Plenty of people now argue that he has a different agenda with different people advising him and a higher pain threshold. That last point is the salient one as the S&P 500 sits 9.3% from the February high.

I suspect it will be down double that if the market concludes that he will stick to tariffs and his team continues to indicate they don’t care about the near-term economy.

So really it’s just a question of where that pain point is. I think a big portion of that depends on Congress as the entire House comes up for re-election in 20 months. That’s not much time to engineer some kind of pain trade.

Ultimately, I think a tiger doesn’t change his stripes and Trump still cares deeply about stock markets. He will be getting pressure from CEOs and Congressmen this weekend and I suspect that pressure will be a bit higher in light of today’s market action.

This article was written by Adam Button at www.forexlive.com.

• Says he thinks things are going to work out very well with Canada
• We had a very good talk with Carney

Mixed messages here.

“We had a very good conversation,” he said. “We have liberation day [tariffs], as you know, on April 2nd, because, and I’m not referring to Canada, many countries have taken advantage of us.”

“We’re going to end up with a very good relationship with Canada and a lot of the other countries.”

Again, maybe the message here is that he’s not talking about the 51st state nonsense anymore.

This article was written by Adam Button at www.forexlive.com.

The USDCAD pair continues to mostly range as traders await the April 2nd deadline. The Loonie’s fate remains tied to the US tariffs plan that is going to be unveiled on Wednesday. The Canadian Dollar could really see a massive appreciation in case we get good news. It’s a game of patience now. Not having a position is having a position.

On the 1 hour chart below, we can
see that the price recently bounced from the bottom of the range and continued upwards with the buyers increasing their bets on the break of the downward trendline. The bullish momentum is now defined by the upward trendline where the buyers will likely lean onto to keep pushing into the 1.4380 resistance.

The sellers, on the other hand, will want to see the price breaking lower to position for a drop back into the support or wait for the price to come into the resistance to have an even better risk to reward setup.

Today we have the Canadian GDP and the US
PCE report. The data could bring some very short term volatility but the focus is on the April 2nd event. All the rest is just noise.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Oil rig count -2 at 484
• Gas rigs +1 at 103
• Total rigs -1 at 592

Crude oil is trading down $0.64 at $69.27. For the week it is up around one dollar.

This article was written by Greg Michalowski at www.forexlive.com.

The major European indices are closing lower for the day lower for the week:

• German DAX -222.86 points or -0.90% at 22455.89. For the week the index felt -1.90%.
• France’s CAC -74.03 points or -0.93% at 7916.09. For the week the index fell -1.58%.
• UK’s FTSE 100 fell -7.27 points or -0.08% at 8658.86. For the week the index was near unchanged (up 0.14%)
• Spain’s Ibex L -113.30 points or -0.84% at 13309.29. For the week the index fell -0.31%.
• Italy’s FTSE MIB fell -359.56 points or -0.92% at 38739.29. For the week the index fell -0.76%.

Looking at the US stock market as London/European traders look to exit, major indices are trading near session lows and are down for the week:

• Dow -627 points or -1.48%. For the week the index is down -0.74%.
• S&P index -100 points or -1.76%. For the week the index is down -1.31%
• NASDAQ index -430 points or -2.42%. For the week, the index is down -2.32%

Looking at the benchmark 10 year yields:

• German 10 year yield fell -2 point basis points to 2.73%.
• France’s 10 year yield fell -1.7 basis points to 3.437%
• UK 10 year yield fell -0.8 basis points to 4.708%
• Spains 10 year yield fell -5.1 basis points to 3.363%.
• Italy’s 10 year yield rose 1.1 basis point to 3.85%

For comparison, the US 10 year yield is up 1.7 basis points this week despite the sharp -9.4 basis point decline today to 4.267%

This article was written by Greg Michalowski at www.forexlive.com.

Canada PM Carney is commented on call with Trump and ssys:

• Canada will implement retaliatory tariffs
• Says will talk to Trump on the economy and security after the Canadian election.
• He says call with Pres. Trump was very constructive.
• He and Trump agreed to begin comprehensive negotiations about a new economic insecurity relationship immediately following the election.

Earlier today Trump posted on Truth Social:

This article was written by Greg Michalowski at www.forexlive.com.

Today we had the Atlanta Fed GDPNow Q1 tracker taken down to -2.8% from -1.8% previously. A different tracker from a different Fed branch is painting a completely different picture.

The NY Fed tracker was revised higher to 2.86% vs 2.72% prior.

“News from this week’s data releases increased the 2025:Q1 estimate by 0.2 percentage point and left the 2025:Q2 estimate largely unchanged,” it says.

The quarter ends this weekend but there is still plenty of data to come before we get a good sense of GDP. Even then much of it is skewed by tariff front-running and adjustments.

“A negative surprise from personal consumption data was offset by a positive surprise from manufacturers’ new orders data for both quarters, along with a positive impact from parameter revisions for 2025:Q1,” the report said.

This article was written by Adam Button at www.forexlive.com.

As the stock market continues to fall, at least yields are moving lower.

As the US stocks fall sharply, the yields are at least moving lower.

• 2-year yield 3.944%, -5.3 basis points
• 5-year yield 4.017%, -8.1 basis points
• 10 year yield 4.285%,-8.3 basis points
• 30 year yield 4.651%, -7.7 basis points

For the trading week, although lower today, yields are still clawing back the gains from earlier this week

• 2 year yield was up as much as 10.4 basis points. It is currently down -1.1 basis points for the week
• 5-year yield was up 13.3 basis points earlier this week. It is currently up 1.2 basis points.
• 10 year yield was up 15.0 basis points earlier this week is currently up 3.8 basis points
• 30 year yield was up 16.0 basis points earlier this week is currently up 6.2 basis points

Gold continues to be a beneficiary and trades to new all-time highs today. The price is currently up $20.40 or 0.67% at $3076.17. The high price has reached $3086.90.

Crude oil is losing steam trading down $0.51 or -0.72% at $69.42.

Risk offers being felt in bitcoin. Is currently down $-2900 at $84,314.

This article was written by Greg Michalowski at www.forexlive.com.

I take this as bullish CAD:

“I just finished speaking with Prime Minister Mark Carney, of Canada. It
was an extremely productive call, we agree on many things, and will be
meeting immediately after Canada’s upcoming Election to work on elements
of Politics, Business, and all other factors, that will end up being
great for both the United States of America and Canada. Thank you for
your attention to this matter!”

Maybe he just really disliked Trudeau (he wasn’t alone).

This article was written by Adam Button at www.forexlive.com.

Bitcoin has extended today’s decline to 3.5% or $3110 in a decline to $84,163.

Risk is being taken down across the board today and that’s not a big surprise to me. At the start of the day, when stocks were almost flat, I wrote that I suspected quarter-end flows were propping up risk assets. That dam has obviously cracked with the S&P 500 now down 1.6% and the Nasdaq 2.2% lower.

If there is any silver lining, USD/JPY has stopped falling so we could see some stabilization. I don’t like what I’m seeing in bonds though with yields down 6-9 bps across the curve.

This article was written by Adam Button at www.forexlive.com.