Market Update: Trump’s Tariff Comments Stir Markets, USD and Yields Spike

In a surprising turn of events, President-elect Trump has disputed a Washington Post article regarding tariffs, causing significant market movements across currencies, yields, and equities. Here’s a breakdown of the latest developments:

Key Market Developments

1. USD Strength and Yield Spike

President-elect Trump’s dismissal of the Washington Post’s tariff story triggered a swift move to the upside in the US dollar. Simultaneously, yields rose sharply:

• 2-year yield: Recovered to unchanged levels.
• 10-year yield: Increased by 2.5 basis points to 4.62%.

2. Equity Market Reaction

While stocks initially saw a brief dip, they have since rebounded, with major indices holding gains:

• S&P 500: Up 33.75 points.
• Nasdaq: Up 171 points.

Despite some intraday volatility, equities remain in positive territory.

Currency Market Analysis

EURUSD: Bearish Bias Emerging

The EURUSD pair saw a notable decline from 1.0411 to 1.03515, breaking below critical technical levels:

• 200-hour moving average: Previously at 1.0376.
• 38.2% retracement level: Positioned at 1.0378.

These broken levels now act as short-term resistance. On the downside, the next key targets include:

• 100-hour moving average: At 1.03418.
• Swing area: Extending down to 1.0332.

A break below these support levels could further strengthen the bearish momentum.

USDJPY: Key Resistance Levels in Focus

The USDJPY pair moved higher, retesting important moving averages:

• 100-hour moving average: At 157.158.
• 200-hour moving average: At 157.318.

These levels are acting as critical resistance. A sustained move above them would shift the short-term bias to the upside. However, if the pair remains below these levels, sellers retain control in the short term.

Key Question: What’s Wrong with the Story?

The market’s reaction underscores the significance of Trump’s comments on tariffs. Traders are now questioning the validity of the original story and its potential impact on future policy. As uncertainty remains high, market participants are likely to continue focusing on key technical levels and any further clarifications from the President-elect.

Conclusion

President-elect Trump’s remarks have introduced fresh volatility into the markets, driving the USD higher and lifting yields. Equities have shown resilience despite the initial rotation lower. Moving forward, traders will be closely monitoring further developments in the tariff story and key technical levels in both the currency and bond markets.

Stay tuned for more updates as the story evolves.

Would you like a deeper dive into technical chart patterns or additional coverage on other asset classes? Let us know!

Please follow and like us: