LIVE MARKETS-Dollar positioning suggests complacency before tariff announcement
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DOLLAR POSITIONING SUGGESTS COMPLACENCY BEFORE TARIFF ANNOUNCEMENT
Long positions in the euro, neutral positioning in the U.S. dollar, and recent buying of the greenback suggests that markets may be complacent ahead of U.S. President Donald Trump’s tariff announcement due later on Wednesday, according to Bank of America.
“We believe tariffs on selective products are what markets expect, but across-the-board tariffs will be a negative surprise. While high tariffs are likely to eventually hurt the US economy more than the rest of the world, global risk-off could still support the USD short-term,” analysts led by Athanasios Vamvakidis said on Wednesday in a report.
“On the other hand, we would expect the USD to weaken if tariffs are benign, or markets expect negotiations to bring them down,” they added.
The analysts said they went tactically short the euro against the British pound ahead of the announcement, noting that the European Union could be more at risk from high U.S. tariffs than the United Kingdom. The British pound also benefits April seasonality, they added.
(Karen Brettell)
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FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:
LIBERATION DAY: INVESTORS ARE TRADING CAUTIOUSLY - CLICK HERE
LIBERATION DATA: ADP, FACTORY ORDERS, MORTGAGES - CLICK HERE
DESPITE UNCERTAINTIES, STOCK VOLATILITY HASN’T PICKED UP MUCH ON TRUMP - CLICK HERE
BOFA CLIENTS HAVEN'T BEEN POSITIONING FOR RECESSION - CLICK HERE
U.S. STOCKS HUNKER DOWN AHEAD OF TRUMP TARIFFS - CLICK HERE
'EVERYTHING IS AWESOME' NO MORE: U.S. BANKS FACE 'MODEST RECESSION' REALITY - CLICK HERE
LARGER TARIFFS POSE STAGFLATIONARY RISKS, CITIGROUP SAYS - CLICK HERE
BENCHMARK TREASURY YIELD CAUGHT IN THE CLOUD - CLICK HERE
WATCH OUT FOR AN UPTICK IN U.S. APRIL DATA - CLICK HERE
US TREASURIES WILL FOLLOW STOCKS ON APRIL 2 - CLICK HERE
TRUMP TARIFFS: WILL THE UK EARN A FREE PASS? CLICK HERE
HEALTHCARE LEADS EUROPE LOWER - CLICK HERE
EUROPE BEFORE THE BELL: FUTURES DIP AHEAD OF LIBERATION DAY - CLICK HERE
MORNING BID: MARKETS AT A STANDSTILL BEFORE TARIFF DRAMA - CLICK HERE
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