Articles

CNBC’s Megan Cassella was talking about tariffs and indicated that the messaging from the White House is that there won’t be negotiations on tariffs. The line from the top is that ‘countries had 70 years to negotiate’.

I think she is basing this on comments that have been on CNN and elsewhere but it’s a troubling development if true. It argues that these tariffs aren’t going away, even if other countries drop their tariffs. She specifically mentioned Israel, which dropped all US tariffs to zero earlier this week and still got a 17% rate.

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

• Prior was 53.5

Data:

• Employment 46.2 vs 53.9 prior
• New orders 50.4 vs 52.2 prior
• Prices paid 60.9 vs 62.6 prior
• Business activity 55.9 vs 54.4 prior
• Supplier deliveries 50.6 vs 53.4 prior
• Inventories 50.3 vs 50.6 prior
• Backlog of orders 47.4 vs 51.7 prior
• New export orders 45.8 vs 52.1 prior
• Imports 52.6 vs 49.6 prior
• Inventory sentiment 56.6 vs 54.7 prior

Comments in the report:

• “Restaurant sales and traffic have improved in the past month
  overall. Valentine’s Day typically starts an improved seasonal trend
  that was consistent this year. We remain optimistic about the coming
  months, despite recent news of possible recession and tariffs that have
  not played out yet.” [Accommodation & Food Services]
• “Starting to see effect of aluminum tariff. These costs will be passed on to customers.” [Construction]
• “Patient volumes continue to exceed forecast, leading to increased
  revenues and an improved financial outlook. Supply chains continue to
  operate effectively and few categories — including IV solutions — are
  showing signs of duress. Labor outlook is improving, with reliance on
  travel staff continuing to recede. Outlook for the duration of the
  quarter is favorable.” [Health Care & Social Assistance]
• “The tariffs have caused issues in the groundwood paper market
  especially. With a large amount of groundwood imported from Canada to
  the U.S., the tariffs and resulting delays have caused havoc with the
  supply chain and deliveries. U.S. mills are getting backlogged and late
  from the additional tonnage they’ve taken on.” [Information]
• “New equipment purchases have slowed down over the last month due to
  the uncertainty of the new administration and cancellation of certain
  aspects of the Inflation Reduction Act.” [Other Services]
• “We are seeing some loosening in the U.S. economy related to hiring
  and people retention. Quality candidates are available, and employee
  turnover is decreasing. Competitive pressure for goods and services is
  increasing as suppliers seek organic increases in revenue.”
  [Professional, Scientific & Technical Services]
• “Government budget cuts and layoffs are negatively impacting our operations.” [Public Administration]
• “We are still holding back some money for emergency use in case the
  new administration targets grant usage and puts a hold on current
  spending.” [Transportation & Warehousing]
• “We’re expecting price increases in the near future due to tariffs
  on several commodity-based contracts, including waterworks items.”
  [Utilities]
• “Tariff confusion and the variety of ways that suppliers are
  responding have had a strong effect on our purchasing decisions this
  month, causing us to shift spend and in some cases buy in advance of
  reported tariffs.” [Wholesale Trade]

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

• Prelim was 54.3
• Prior was 51.0

The ISM services index is due at the top of the hour.

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

Dear Client,

As part of our commitment to providing the best trading experience to our clients, we want to inform you there will be an adjustment in the trading schedule due to the Australia ending Daylight Savings on Sunday, 6 April 2025.

While trading, most products will remain unaffected; however, there will be a change in the trading hours of some products.

All times mentioned below are expressed as Platform time (GMT +3) except for cTrader (GMT+0).

MT4/5:

cTrader:

For any further assistance, please contact our Support Team.

Kind regards,

IC Markets Global.

The post Australian Daylight Savings: Updated Trading Schedule 2025 first appeared on IC Markets | Official Blog.

S&P 500 future are down 3.7% today.

It could be worse.

One of the biggest decliners is Nike, which is down 14% after tariffs hit almost every country it manufactures in. The company reportedly has 150 factories in Vietnam and a half-million workers. No one was expecting a 46% tariff on Vietnam and it will be catastrophic to margins for the company.

There is some thinking that it can’t last. Apple is similar as with China tariffs, the cost of an iPhone would have to go to $1500 from $1000 to maintain margins.

As Dario Perkins writes:

talking to investors this morning, the tariffs were so bats*** crazy, nobody really believes them. Maybe there is a sort of Laffer curve. Very low tariffs OK, bats*** crazy tariffs also OK

Tech equity analyst Dan Ives took a similar line:

The reason we are saying this is over: in the coming 24 hours the world will quickly realize these tariff rates will never stay as they are shown otherwise it would be a self-inflicted Economic Armageddon that Trump would send the US and world through over the coming year. We have to assume this is the start of a negotiation and these rates will not hold…stocks will sell-off massively but ultimately our view is these numbers would throw the US into a clear recession and cause stagflation almost immediately…if they hold (and they will not for long, in our view).

Place your bets but my inclination based on comments from Lutnick and Trump is that they’re not considering a big U-turn.

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

The Atlantic leak last week was a sign that the people running foreign policy in the United States were making it up as they go along.

The reasoning behind the tariff rates today may be even worse.

Here are some examples:

These numbers were purported to be some kind of well-thought-out number to represent the sum of tariffs and non-tariff barriers on the US. They’re framed as ‘reciprocal’.

The whole exercise is a farce.

The “tariffs charge to the US” numbers are simply the US trade deficit with that country divided by total imports. South Korea, for instance, has been hit with a 25% tariff rate that is a halving of the 50% ‘calculated’ rate. How did the US do that calculation?

Imports were $131.5 Billion, exports were $65.5 billion. That leaves a trade deficit in goods of $66 billion. Take that $66 billion and divide by total imports and you get almost exactly 50%.

Another example: The trade deficit with China ($295.4 billion) / US imports from China ($438.9 billion) = 67%

That same exercise was done on every country and that’s how those numbers were calculated. If you had a deficit with the US or a number below 10%, you did no better than 10%. Critically, services trade was also left out of the equation (the US has a large services surplus).

Once that number was arrived upon it was then cut in half in some kind of ‘deal-making’ PR strategy but the implication here is that if you happened to sell your oil or computer chips to the US (sorry Taiwan) instead of China, you get smoked by tariffs. Also, it means that your dollar figure has nothing to do with non-tariff barriers.

The USTR even tried to pretend it had used a complex mathematical formula, but it’s a complete smokescreen, presumably because it didn’t give the President the number he wanted.

Shockingly, the administration might have just asked ChatGPT to do its homework. If that wasn’t bad enough, uninhabited islands were also singled out for tariffs. Even worse, they may have asked ChatGPT to generate a list of ISO country codes and that’s why Svalbard and Jan Mayen (they share a code) were listed together, even though they’re administered separately by Norway.

Another critical example is the UK and EU. The EU has a 39% rate and the UK 10%. Before Brexit, both these areas had the exact same trade and non-tariff barriers with the US. Since Brexit, very little has changed but they ended up with vastly different rates.

There is no logic here and the whole thing reeks of a slapped-together plan rolled out by unserious people.

Other troubling signs

In today’s post-announcement interview with Bloomberg, Treasury Secretary Scott Bessent was rattled and didn’t know what the tariff rates were on Mexico/Canada and was also unsure about China policy.

That suggests he could have been sidelined from tariff discussions or decision-making. He is seen as one of the people in the administration that markets trust to curb Trump’s worst instincts. Instead, it looks like he could be kicked to the curb.

What’s next

Naturally, there is time to right the ship. Someone convinced Trump not to implement the extra tariff rates until April 9, so there is time for negotiations.

Even with that, I believe the Trump Put is in deep jeopardy. This isn’t the same guy who ran the White House from 2016-2020 and bragged about every move in the Dow Jones Industrial Average. He doesn’t seem to care about pain in the markets anymore, or at least a 10% decline hasn’t been enough to get his attention. Will it take 20%? 30%?

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

A key variable in the next leg in markets is how the Federal Reserve reacts to all this. I’ve seen some research today showing this will push US inflation to 5% and that’s a big headache for Powell.

The market is pricing in a very high likelihood of a rate cut in June and about 104 bps in easing by this time next year. That all assumes the Fed looks through tariffs but some Fed officials aren’t on board with that thinking.

Powell is scheduled to speak at 11:25 am ET on Friday.

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

Fitch picked a heckuva day to downgrade a major economy.

• We forecast China’s general government deficit to rise to 8.4% of GDP in 2025, from 6.5% in 2024
• We forecast China GDP to increase by 4.4% in 2025 from 5.0% in 2024
• Tariff rise has been much more drastic and China will still be affected by a broader tariff-induced global slowdown

China’s finance ministry responded saying the downgrade is biased and cannot fully and objectively reflect the actual situation in China.

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

Trump posted on Truth Social and he seems to think this is the worst of it. We’ll see:

THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING. THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!!!

Maybe I’m reading too much into this but the indication here isn’t that he’s considering walking back anything.

Maybe if they put a large tariff on the CAPS LOCK button he would change his mind.

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

• Prior was -$131.4 billion (revised to -$130.7 billion)

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

• Prior was $3.97 billion (revised to $3.13 billion)
• Exports $70.11 billion vs $74.21 billion prior
• Imports $71.63 billion vs $71.08 billion prior

That’s a drag on Canadian growth.

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

• Prior week 224K revised to 225K.
• Initial jobless claims 219K versus 225K estimate
• 4- week moving average of initial jobless claims 223K vs 224.25K last week
• Continuing claims 1.903M vs 1.870M estimate
• 4-week MA of continuing claims 1.871M vs 1.868M last week
• Prior week continuing claims 1.847M

The largest increases in initial claims for the week ending March 22 were in Kentucky (+915), Oregon (+577), New
York (+544), Tennessee (+429), and Missouri (+392), while the largest decreases were in Michigan (-4,040), California
(-1,826), Texas (-1,774), Mississippi (-1,764), and Pennsylvania (-565).

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