Stocks Tumble as Trump’s Steel and Aluminum Tariffs to Kick in Tonight

Stocks and commodities are in turmoil again, as today the Trump administration published that the already announced trade tariffs on steel and aluminum will be in place on goods from the previously exempted countries (Canada, Mexico, and the EU), starting at midnight. Most of the major US and European indices gave back most of their “Italy is OK” gains from yesterday, although he mighty Nasdaq is once again ahead of the pack, trading just below the 7000 mark and its 10-week high.

DAX, 4-Hour Chart Analysis

While the benchmarks are mostly above their recent short-term lows, there are strong signs that traders will see another round of risk-off moves, as safe-haven assets are still bid, bond markets continue to look fragile, and the European financial segment is still under pressure, despite the calmer environment.

USD/CAD, 4-Hour Chart Analysis

While the Euro retreated from its intraday maximum, the Canadian Dollar (and the Mexican Peso) was more affected by the tariff announcement. The currency has seen a lot of action in the last 24 hours, as the currency shot higher after the hawkish remarks by the Bank of Canada, but re-plunged today, as the tariffs were announced and as crude oil turned lower again. Despite the recent whipsaw, from a technical standpoint, the pair will likely continue higher and the test the March high in the coming weeks.

USD/TRY, 4-Hour Chart Analysis

While the Turkish situation is off the front pages these days, from a purely technical standpoint, the USD/TRY pair is only in a short-term flag consolidation pattern. In case of a breakout, the currency could be under pressure yet again, despite the central bank’s emergency measures.

The Dollar and Treasuries Remain in Focus

EUR/USD, 4-Hour Chart Analysis

The pullback in the Dollar continued in early trading, but as risk assets turned lower, the Greenback also found support, and the Dollar index is now in the green for the day. Heavy trading continued in Treasuries too, as rate hike odds continued to be volatile before tomorrow’s Employment Report, which could be crucial with regards to the Fed’s next rate decision.

The yield curve continues to flatten (long-term yields are edging closer to the short-term rates), as although the longer-term outlook is getting gloomier, investors expect the short-term trajectory of the Fed to remain relatively stable despite the recent worries.

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Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

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