Forexlive Americas FX news wrap: US data sags, tariffs loom and OPEC+ pumps more

• Trump signed action to increase China tariffs to 20% – White House
• Trump reiterates 25% tariffs on Mexico and Canada
• Surprise decision: OPEC will go ahead with April oil output increase (confirmed)
• China dampens fiscal stimulus hopes with article on deficits
• US February ISM manufacturing 50.3 vs 50.8 expected
• US February final S&P Global manufacturing PMI 52.7 vs 51.6 prelim
• Canada February S&P Global manufacturing PMI 47.8 vs 51.6 prior
• US January construction spending -0.2% vs 0.0% expected
• GDPNow US growth tracker continues plunge: Down to -2.8% from -1.5%
• Fed’s Musalem: Recent consumer and housing data pose some downside risk
• Goldman Sachs highlights a quirk in US GDP calcuations that will help the US grow
• Lutnick: Trump will decide on tariffs this afternoon
• Sheinbaum: We are going to wait and see what happens regarding a tariff announcement
• Navarro continues to point to drugs as the reason for tariffs on Canada
• March seasonals: The sun shines a bit brighter

Markets:

• Gold up $35 to $2894
• US 10-year yields down 7.4 bps to 4.155%
• WTI crude oil down $1.38 to $68.38
• S&P 500 down 1.75%
• EUR leads, CAD lags

It was another day of twists and turns.

The mood was upbeat coming into the day on a follow-through from Friday’s strong bounce but it quickly soured. US economic data highlighted tariff and growth concerns once again. Those were validated by Trump tariff talk later in the day and that’s when the wheels really came off. Heavy selling hit risk assets, CAD and MXN late in the day as Trump said there was no more room for negotiation. I’d remind readers that he also said that last month before delaying tariffs.

In any case, Lutnick said the White House would have a discussion today and make the announcement tomorrow. Notably, he signed the order on additional China tariffs today but didn’t sign the ones on Mexico and Canada. That news led to something of a bounce in risk assets and CAD late in the day.

For the loonie, it was a double dose of bad news as oil prices sank when OPEC+ announced it was bringing back the barrels from voluntary production cuts in April and intends to bring back the full 2.2 mbpd over the course of 2025 and 2026. They added caveats about managing the market but oil was beaten up and that added to the bid in Treasuries.

Perhaps most impressive were the euro and pound. There is talk about expansionary fiscal policy around defense spending but I tend to think that a big part of it is the unwind of crowded positions that are short EUR/USD and GBP/USD either in the FX market or structurally via equities or other assets.

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