Risk sentiment was initially buoyed overnight and through Europe after the US announced that smartphones and electronics were exempt from China’s additional tariffs, but Trump clarified they are still subject to the 20% tariff rate imposed on China due to the inflows of fentanyl to the US. Equity futures hit peaks around the opening bell, but a soft open saw the upside pare by the time Europe left for the day. Further on tariffs, we are still on the look out for any semiconductor related update, while Trump said Monday they will do tariffs on imported pharmaceuticals, they do not make their own drugs, and pharmaceutical tariffs in the not too distant future. The upside returned in the US afternoon, perhaps buoyed by dovish commentary from Fed’s Governor Waller, which also gave a helping hand to T-Notes as they settled at highs. The Fed Governor noted that under the current tariff rate (effective tariff rate of 25%), he would support cutting rates sooner, and to a greater extent than previously thought. Elsewhere, the data highlight was the New York Fed SCE, which saw inflation expectations rise in the short-term, unchanged in the medium term, and fall in the long term. In FX, The Dollar was choppy, with the Dollar Index trading between 99.27-101.16, but heads to European Trading sub-100. Cyclical currencies outperformed (ex-CAD) while JPY saw marginal gains. The Swiss Franc saw some notable weakness during trade but with little headline catalyst, and the moves have since pared. In commodities, crude ultimately settled flat but off earlier lows while gold was down, but silver was up. Attention this week remains on ongoing trade updates with EU’s Sefcovic in Washington for trade talks. Elsewhere, US retail sales and US earnings will be in focus. The March New York Fed Survey of Consumer Expectations saw the one-year inflation expectations rise, three-year remain unchanged, with the 5-year forecasts falling. The report also found that unemployment, job loss, and earnings growth expectations deteriorated, while household income growth expectations declined. Median one-year-ahead earnings growth expectations fell by 0.2% to 2.8% in March, equaling its 12-month trailing average. The mean probability that the US unemployment rate will be higher one year from now jumped 4.6% to 44.0%, the highest reading since April 2020. The survey found the mean perceived probability of losing one’s job in the next year rose 1.6% to 15.7%, while the probability of finding a job if the current job was lost fell by 0.1% to 51.1%. Households were also more pessimistic about their year-ahead financial situations and access to credit. On the stock market, stock price expectations declined and reached the lowest level since June 2022. Fed Governor Waller suggested that the new tariff policy represents one of the largest shocks to the US economy in decades. He believes that higher inflation from tariffs will be temporary, but policy is highly uncertain and calls on the Fed to remain flexible. He acknowledged how partial tariff suspension has widened the range of possible outcomes and made the timing less certain. He notes inflation expectations have not become unanchored, and expects inflation to return to a more moderate level in 2026. Waller said policy is meaningfully restricting economic activity (Powell and others have used the term modestly restrictive), and hopes underlying inflation will continue to moderate. Waller added that in Q1, the economy was growing modestly, the labour market was solid, but inflation was too high and making slow progress. Waller also gave his PCE forecasts for March, Y/Y headline expected at 2.3%, with Core at 2.7%. The Fed Governor also laid out some economic projections under different tariff scenarios. Under a large tariff scenario, where a 25% average tariff rate stays for some time, inflation could peak near 5%, while the drag on output and employment could be longer-lasting, with unemployment climbing to 5%. Under this scenario, Waller would favour cutting the policy rate sooner than previously thought. However, under a scenario where tariffs drop down to 10%, inflation could peak at 3%, would see limited effects on economic activity and he would support a limited monetary policy response. Under a smaller-tariff scenario, the Fed could be more patient and rate cuts could take place in the latter half of the year. In wake of the speech, Wall Street Jornal’s Timiraoss highlighted Waller continuing to be more dovish than his colleagues. Elsewhere, Oil ended Monday with a 0.2% gain while Gold traded sideways before closing 0.8% lower.
To mark my 3175th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 310 points yesterday and is now ahead by 6345 points for April after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 0.79% higher at a price of 5405.
The Dow Jones Industrial Average closed 312 points higher for a 0.78% gain at a price of 40,524.
The NASDAQ 100 closed 0.57% higher at a price of 18,796.
The Stoxx Europe 600 Index closed 2.6% higher.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 1.18% higher at a price of 33,982.
Currencies
The Bloomberg Dollar Spot Index closed 0.45% lower.
The Euro closed 0.03% lower at $1.1354.
The British Pound closed 1.05% higher at 1.3190.
The Japanese Yen rose 0.32% closing at $143.04.
Bonds
Germany’s 10-year yield closed 6 basis points lower at 2.57%.
Britain’s 10-year yield closed 10 basis points lower at 4.67%.
U.S.10 Year Treasury closed 12 basis points higher at 4.38%.
Commodities
West Texas Intermediate crude closed 0.2% higher at $61.62 a barrel.
Gold closed 0.8% lower at $3210.10 an ounce.
This morning on the Economic Front we have UK Employment including Average Earnings at 7.00 am. At the same time the German Wholesale Price Index will be release. Next, we have the German and Euro-Zone ZEW Surveys at 10.00 am. This is followed by the New York State Empire Manufacturing Index and Canadian CPI at 1.30 pm. Finally, we have speeches from Fed Members Barkin at 4.35 pm and Cook at 7.10 pm.
Cash S&P 500
My S&P plan worked well on Monday as the market rallied to my 5462-sell level before falling over 100 Handles. Subsequently, the S&P bottomed at a price of 5357 before rallying 50 Handles into the close. I covered my short position at my revised 5438 T/P level and I am still flat. There is no doubt the key level for bulls to make a stance is at 5500. As long as this key pivot point continues to prove to be strong resistance I will be a small seller of rallies. We are now living in an environment where markets can move 3/5% in either direction on a dime just based on a tweet out of the blue. I am perfectly aware of this as we have to base our buy/sell levels based on this strategy. Even though the VIX fell 17.55% on Monday to close at 31, the VIX needs to break and close below 20 for confidence to return to the equity markets. Today, I will again be a seller on any further rally to 5490/5530 with a higher 5551 ‘Closing Stop’. The S&P has short-term support from 5280/5320. I will now raise my buy level to this area with a higher 5265 ‘Closing Stop’. If I am taken short, I will have a T/P level at 5455. If I am taken long, I will have a T/P level at 5363.
EUR/USD
I am still flat the Euro as the market tries to consolidate last week’s gains. Given how overbought the Euro is trading and oversold the Dollar is at this time I will not chase the price of the Euro higher. Therefore, I will continue to be a buyer from 1.1110/1.1200 which was the high from last September with the same 1.1045 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1280.
Dollar Index
The Dollar sold off to my 99.40 buy level. I am still long and I will add to this position on any further move lower to 98.60 with the same 96.95 ‘Closing Stop’. I will now lower my T/P level to 100.20. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
My latest 1820 average long Russell position worked well as the market rallied to my 1890 T/P level and I am now flat. The Russell has support below from 1780/1850 where I will again be a buyer with the same 1715 ‘Closing Stop’.
FTSE 100
I am still flat as the FTSE never came close to yesterday’s sell range. This morning the FTSE is trading at a price of 8140. Today, I will leave my 8210/8300 sell level unchanged with the same 8375 ‘Closing Stop’. If I am taken short, I will have a T/P level at 8140. I still do not want to be long the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
No Change: I am still flat. With 30-Year Bonds at 5% I am not sure that this crisis is anyway close to been over. We are probably in the early stages of a massive financial reordering that will end the U.S. Dollar status as the world’s only reserve currency. We are entering a period of monetary plurality that will see the Dollar, Euro, Gold, the Chinese Yuan and Bitcoin compete as the monetary reserve currency. This transition will be extremely painful for America, which for the last 50+years has enjoyed the ‘’exorbitant’’ privilege of being able to print the reserve currency. President Trump’s trade war means this global order can no longer be financed only with the currency that America prints. Federal spending for the first half of 2025 totals $3,56 trillion, a 10% increase over the $3.25 trillion spent in the same period last year. The result is the U.S. Bond Market selling off at a scale that I have never seen before. Normally, when global market volatility strikes, investors rush into U.S. Treasury Bonds. Now, investors (most likely foreign central banks) are dumping bonds, producing declines that are virtually unprecedented. To say that America Inc is now trading as a third world country is not far from the truth something that no one of us would ever believe we would see in our lifetimes. This move higher in yields is causing a huge threat to financial institutions like Bank of America who has invested over $600 billion into long-duration, low yield mortgages (45%) and Treasury Bonds (52%) at the top of the bond market ana re sitting on massive capital losses given the average yield on these investments is just 2%. The last 50 years has seen the creation of an immense financial bubble in financial bonds. That bubble is now being popped and there is going to be a lot of fireworks going forward. This will now be good for global equity markets. I am still flat the Dow. The Dow has short-term resistance from 41100/41400 where I will be a small seller with a tight 41605 ‘Closing Stop’. If triggered, I will have a T/P level at 40750.
Cash NASDAQ 100
I am still flat. This morning the NDX is trading lower at 18760. We have strong resistance from 19600/19900 where I will continue to be a seller with the same 20105 ‘Closing Stop’. Meanwhile, I will continue to be a strong buyer on any dip lower to 18100/18300 with the same 17995 ‘Closing Stop’.
December BUND
Late in Monday’s session the Bund rallied to my sell range for a now 131.80 short position. I am still short and I will add to this position on any further move higher to 132.60 while raising my ‘Closing Stop’ to 133.25. I will now raise my T/P level on this position to 131.20. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change: After the US raised tariffs on China to 145% last week, China announced they would be raising tariffs to 125% on Friday. Meanwhile, PPI and CPI inflation both came in far weaker than expected for March which further supported gold prices. The story was largely about the US Dollar Index (DXY) which collapsed to a new 52-week low of 99.01 on April 11th. The sudden move lower sent gold above $3200 and accelerated capital rotation into safe haven assets. Furthermore, as the basis trade was unwound in bond markets and yields surged rapidly, more capital rotated out of bonds and into gold, a “golden” scenario’’. Given how oversold the Dollar is I would expect Gold to fall once the Dollar starts to recoup some of last week’s large losses. I will use a sell-off in Gold to buy the market. For now, I will stay flat until we get a badly needed retracement.
Silver Rolling Contract
No Change: I am still flat Silver as I continue to be a strong buyer on any further move lower to 28.30/29.30 with the same 26.95 ‘Closing Stop’. If triggered, I will have a T/P level at 30.20.
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