Collinson FX: April 15: Tariff exemption covers 25% of China exports - a massive step forward
by Collinson FX 15 Apr 22:46 NZST
15 April 2025
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Collinson FX: April 15: A massive step forward
The recovery of global equities continues, bolstered by the Trump Administration approving an exemption from massive tariff on electronic equipment from China. This accounts for nearly 25% of Chinese exports to USA and is a massive step forward. Equity markets rallied across Asia, Europe and the USA. US Bond Yields calmed down and the US Dollar continued to lose ground.
The EUR charged towards 1.1350, while the GBP jumped above 1.3150. Chinese data confirmed a massive increase in Chinese exports to the world and huge trade surplus, but this will be impacted, if a deal between the US and China is not made soon. The US is negotiating deals with more than 100 Countries currently.
The flagging reserve allowed further gains in the commodity currencies, with the AUD breaking back above 0.6300, while the NZD surged to 0.5850. Trade and tariffs will continue to dominate global markets in trading this week.
Collinson FX: April 14:Recovering lost ground
A week of intense volatility came to a close Friday, with gains on US stock markets, looking to recover the lost ground from ’Liberation Day’. The massive losses sustained by global bourse, following the imposition of global tariffs by the Trump administration, is quickly being recuperated. The relief by suspension of tariffs, to all but China, triggered the surge in confidence and signalled one of the biggest days of gains in US stock market history. The focus is now on China and the pressure is immense. China has retaliated, but we are likely seek a compromise, to enable the new-normal global trade to begin. US bond yields remain high and the US Dollar is under pressure, with the EUR blasting through 1.1400, while the GBP surged above 1.3100. The GBP was boosted by stronger than expected GDP growth data, but both currencies settled lower at the close.
The fall in the reserve bolstered the performance of commodity currencies, with the AUD looking to regain 0.6300, while the NZD consolidates above 0.5800. This coming week will likely see continued volatility, with economic data releases taking a back seat, to the global trade conversation. Chinese actions will be the market focus in a trade shortened week, due to Easter Holiday celebrations.
Collinson FX: April 11: Markets will be suffering severe whiplash, after the last couple of weeks trade, and overnight was no exception.
Asian and European markets posted big gains, bolstered by the Trump announcement of a ‘pause’ on tariffs, on all but China. Tariffs remain at 10%, but the full tariff burden, has been suspended for 90 days. This was enough to trigger rallies in equities across Asia and Europe. The USD finally succumbed to the market volatility, as fears began to emerge of the overall impact of the global trade wars, on US economic growth. The EUR surged above 1.1200, while the GBP is heading back to the important 1.3000. US inflation data was largely ignored amongst the fallout, but the CPI crashed to 2.4%, much lower than expected.
The tumbling reserve further boosted resurgent commodity currencies, with the AUD breaking above 0.6200, while the NZD pushed up towards 0.5850. The roller coaster continues, and uncertainty will only fuel the tenure of this disruptive period. Trump seems focused on China, so developments there, remain key to the return of some semblance of normality.
Collinson FX: April 10: Tarriffs suspended with 70 countries - except China
President Trump announced a temporary pause on ‘reciprocal tariffs’, while negotiations are under way, with 70-odd Countries.
US equity markets roared back overnight, with massive gains across all of the bourse.
The relief from markets was manifest, with an explosion upwards in the Dow, Nasdaq and S&P. Markets are experiencing a massive roller-coaster ride and uncertainty breeds volatility. It appears that Trump has taken a chill-pill, on the rest of the world and decided to turn all guns on the resistant and rebellious, China. Trump has increased tariffs on China, then when retaliation arrived, doubled and tripled down. Who will blink first?
The equity market tumult has also spread to the bond markets, with yields on the rise, sparking real concerns in the Trump administration. A big sell-off in bonds would be extremely uncomfortable and China have a lot to sell. The USD was softer overnight, with the EUR looking to regain 1.1000, while the GBP trades above 1.2700.
The Trump administration announcement of a pause in tariffs, allowed the commodity currencies to regain some mojo. The AUD surged above 0.6100, while the NZD regained 0.5600. The RBNZ cut rates by 25 basis points, in line with expectations, and promised further cuts if the ‘tariff’ volatility continued. The focus for Trump is now China and this will determine the outcome of this trade war.
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