The Morning Update

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Stocks wavered as the dollar's rebound faded, with investors grappling with mixed signals from the Trump administration. Oil prices rally as bond yields hedges lower. With recent speculation that foreign investors where selling US bonds, report shows that Japanese investors bought a net 223.7 billion yen ($1.57 billion) in overseas bonds in the week through April 19, marking their first purchase since February. While Trump has stopped his recent attacks on Fed Powell, he has revived his 51st state rhetoric, suggesting higher auto tariffs on Canada.

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News Headlines. According to news report, China's Commerce Ministry denied any ongoing trade talks with the U.S., stressing that negotiations must be based on mutual respect. Chinese customers are rejecting new Boeing jets due to tariffs, prompting the company to reroute planes to other buyers. A South Korean delegation will meet U.S. officials Thursday for trade talks, focusing on shipbuilding, energy, and possibly shared defense costs, as Seoul seeks lower tariffs. Trump accused Ukraine's Zelensky of delaying peace by rejecting a deal recognizing Russia's control of Crimea. The U.S. proposal would freeze current front lines, but Ukraine refuses to give up Crimea. Zelensky made a historic visit to South Africa, aiming to counter Russia's growing influence. The trip marked a diplomatic breakthrough but was cut short after a Russian airstrike on Kyiv. In Gaza, growing crowds are openly denouncing Hamas, blaming it for years of suffering and the current crisis.

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In currency markets. Japanese Finance Minister Kato criticized U.S. tariffs at a G7 meeting, highlighting their negative impact on markets and global stability. He called for free trade, policy coordination, and avoiding excessive forex fluctuations. In the Asian currency market, the USD declined 0.78% against the JPY and 0.41% against both the THB and MYR. The AUD and NZD also strengthened, each gaining 0.45%. In emerging markets, the MXN rose 0.28%, while the ZAR slipped 0.13% against the dollar.

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In commodity markets. Oil prices stabilized after a 2% drop yesterday, as investors assessed the likelihood of upcoming OPEC+ production increases. Gold rebounded above $3,300 after two days of losses from its $3,500 peak. The recovery follows Trump’s comments hinting at new China tariffs within weeks, while Treasury Secretary Bessent clarified no unilateral de-escalation is planned. Agricultural commodities were mixed, with soybeans and lumber each rising 0.60%, while wheat slipped 0.24%.

Current level USD Index                99.334         Down 0.52%

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USD/CAD fell as the U.S. dollar weakened after the Fed’s Beige Book highlighted economic concerns, including tariff impacts and slower growth. Mixed S&P PMI data also added pressure on the dollar.

Current level USD/CAD                   1.3846            Down 0.25%

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EUR/CAD rebounds after a two-day selloff as and remains in striking distance of recent highs.

Current level EUR/CAD                   1.5772           Up 0.40%

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EUR/USD held near 1.1300 on Thursday after a two-day correction, as the USD faces pressure in its attempt to extend its recovery. Markets are pricing in a potential USD recovery amid hopes for de-escalation in the US-China trade war, contingent on reducing high tariffs.

Current level EUR/USD                   1.1388            Up 0.64%

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GBP/EUR rose after two sessions of losses, supported by optimism over potential US-China trade talks. The White House is reportedly considering cutting tariffs on Chinese imports by up to 50%. US Treasury Secretary Bessent acknowledged the unsustainable current tariff levels, while President Trump emphasized that any tariff revisions depend on China’s willingness to negotiate.

Current level GBP/EUR       1.1690 (0.8540)         Up 0.06%

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GBP/USD bounced back as the USD struggled. Trump’s softening stance on the Fed and China eased pressure on the dollar, after previous attacks on the Fed had shaken investor confidence.

Current level GBP/USD                   1.3316          Up 0.47%

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