Charting the Global Economy: Tariffs Trickling to US Consumers
It's the last readout of inflation before Federal Reserve officials meet at the end of this month. Policymakers are still divided as to whether tariffs will cause a one-time hit to prices or an enduring inflationary risk.
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Countries push for last-minute deals as Thursday tariff deadline looms; Trump claims 'people love the tariffs'
A dizzying array of trade crosscurrents continued Tuesday with a push for last-minute deals, lingering fuzziness on previously announced trade commitments, and indications that a deal to delay tariffs on China is "close." It all comes as global importers brace for a first deadline coming Thursday morning, when Donald Trump promises to implement a central plank of his trade agenda in the form of a tiered approach to "reciprocal" tariffs from 10% to 50%. The president has repeatedly said he's full-speed ahead on his plans and that no delays are likely — even teasing on CNBC Tuesday morning that he probably won't run for president again but that he'd like to, in part because, in his view, "people love the tariffs." (Trump is, of course, barred by the Constitution from running for a third term, but he's often floated the idea.) Some countries clearly aren't big fans at the moment and find themselves on the outside looking in — particularly Switzerland and India. Those two nations face notably divergent situations right now, with the Swiss president announcing she is flying to Washington, D.C., today to try to find last-minute concessions to avert a 39% tariff on goods from her nation. India, meanwhile, has seen its chances of a deal dwindle, with top aides for Indian Prime Minister Narendra Modi also reportedly traveling this week — but to Moscow. Trump downplayed the chances of major concessions with Switzerland during his call with CNBC Tuesday morning and added regarding India that "we settled on 25% [tariffs], but I think I am going to raise that very substantially over the next 24 hours." Trump also weighed in Tuesday morning on talks with China. Markets are closely watching for any signs of an agreement to delay a tariff snapback scheduled for Aug. 12, with Trump saying, "We're getting very close to a deal." The president also added that new sector-specific tariffs on semiconductors and pharmaceuticals are likely and that at least those pharmaceutical tariffs could be announced "within the next week or so." Read more: What Trump's tariffs mean for the economy and your wallet New details for some nations — and a focus on India and Switzerland Meanwhile, there is also some new clarity on some technical details around how the new tariff landscape will likely work beginning at 12:01 a.m. ET on Thursday. US customs officials this week offered additional technical guidance in a new document about how it'll handle some tariff exemptions. The news there may give some select importers a short-term breather. But with a full tally, according to Bloomberg Economics, the average US tariff rate is now expected to rise to 15.2% if duties go forward as planned. That's a jump from current rates of 13.3% and another jump from the 2.3% duties seen in 2024 before Trump took office. That overall landscape set to be in effect Thursday will cover nearly every country on the globe. It also comes after Trump and his team set "bespoke" rates largely based on the trade deficit, with many of America's top trading partners seeing a key new standard of 15% tariff, while others will see higher rates. Read more: 5 ways to tariff-proof your finances Countries from the European Union to South Korea to Japan also struck deals at that 15% rate, but open questions remain. Japan's top trade negotiator is also reportedly due in Washington, D.C., this week for talks to ensure that a plan proceeds to cut auto tariffs to 15%. Likewise, talks with the EU continue as negotiators there are reportedly still pushing for exemptions, such as on wine and spirits. Other Asian countries have struck deals in the 19%-20% range. Trade Representative Jamieson Greer recently said on CBS that the published rates included many agreements, "some of these deals are announced, some are not," with other nations simply being dictated tariffs based on the level of the trade deficit. Switzerland is one nation for which the US has dictated tariffs. Its delegation will be in Washington on Tuesday, set to push for lower rates. But on Tuesday morning, Trump suggested that it would be an uphill climb and that a recent call with the country didn't go well because "they essentially pay no tariffs," even as talks are clearly set to continue there. Meanwhile, any immediate offramp with India appears unlikely because of that nation's connections with Russia and Russian oil. A note Tuesday from Capital Economics suggested that India could, in theory, offer concessions to diversify its energy sources, "but we doubt that India would make a wholehearted effort to wean itself off Russian oil [as it could upset relations and] it would not play well to be seen caving to Trump's demands." At the same time, reports from Bloomberg and the Times of India revealed that two top aides to Indian Prime Minister Narendra Modi are traveling not to the US but to Russia in the coming days and weeks, even amid Trump's ever-escalating threats. Trump on Tuesday morning suggested talks are on ice for now and will be complicated when they resume, adding that "the sticking point with India is that tariffs are too high." Ben Werschkul is a Washington correspondent for Yahoo Finance. Click here for political news related to business and money policies that will shape tomorrow's stock prices Errore nel recupero dei dati Effettua l'accesso per consultare il tuo portafoglio Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati
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Fed Rate Cut Speculation Is Building a Buy Case for T-Bond Futures Here
December U.S. Treasury bond futures (ZBZ25) present a buying opportunity on more price strength. See on the daily bar chart for December T-Bond futures that prices are now trending up and have just hit a four-week high. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bullish posture, as the red MACD line is above the blue trigger line and both lines are trending higher. More News from Barchart Dear Nvidia Stock Fans, Mark Your Calendars for August 27 Options Traders Expected Palantir Stock's Tamest Earnings Reaction in a Year. Did They Get It Right? Tesla Gains on Elon Musk's New Pay Package. Is TSLA Stock a Buy? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Fundamentally, last Friday's U.S. jobs report abruptly changed the trajectory of marketplace thinking. Now, odds are 75% that the Federal Reserve will lower U.S. interest rates at the September Federal Open Market Committee (FOMC) meeting. That's bullish for U.S. Treasury futures markets prices. A move in the December T-Bond futures prices above chart resistance at 115 23/32 would give the bulls more power and it would also become a buying opportunity. The upside price objective would be 121 even or above. Technical support, for which to place a protective sell stop just below, is located at 113 16/32. IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature. Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Dollar Recovers with Bond Yields
The dollar index (DXY00) today is up by +0.16%. The dollar is moving higher today on some mild short covering after last Friday's and Monday's losses. Higher T-note yields today are supportive of the dollar. Also, today's news that showed the US Jun trade deficit shrank to a 1.75-year low was bullish for the dollar. The dollar fell back from its best levels today after the Jul ISM services index unexpectedly declined. Also, dovish comments late Monday from San Francisco Fed President Mary Daly were bearish for the dollar when she said the time is nearing for Fed interest rate cuts with the labor market softening and no signs of tariff-induced inflation. The dollar still has a negative carryover from last Friday's weaker-than-expected US payroll and ISM manufacturing reports, which bolstered speculation that the Fed may cut interest rates as soon as next month. More News from Barchart What Traders Can Learn from the Copper Price Crash Dollar Falls with Bond Yields on Fed Rate Cut Speculation Dollar Under Pressure as Fed Rate Cut Expectations Increase Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Also, questions about the Fed's credibility are weighing on the dollar after Fed Governor Adriana Kugler resigned last Friday, which could prompt President Trump to nominate a new governor who is more dovish and could undermine Fed Chair Powell's influence. Strength in stocks today has also reduced liquidity demand for the dollar. The US Jun trade deficit shrank to -$60.2 billion from -$71.7 billion in May, better than expectations of -$61.0 billion and the smallest deficit in 1.75 years. The US Jul ISM services index unexpectedly fell -0.7 to 50.1, weaker than expectations of an increase to 51.5. The Jul ISM services prices paid sub-index unexpectedly rose +2.4 to a 2.75-year high of 69.9, versus expectations of a decline to 66.5. Federal funds futures prices are discounting the chances for a -25 bp rate cut at 92% at the September 16-17 FOMC meeting and 63% at the following meeting on October 28-29. EUR/USD (^EURUSD) today is down by -0.27%. The euro is under pressure today from a stronger dollar. Also, today's downward revision to the Eurozone Jul S&P composite PMI was bearish for the euro. In addition, the euro is struggling due to concerns that President Trump's tariff policies will curb economic growth in the Eurozone. The Eurozone Jul S&P composite PMI was revised downward by -0.1 to 50.9 from the previously reported 51.0. Swaps are pricing in a 13% chance of a -25 bp rate cut by the ECB at the September 11 policy meeting. USD/JPY (^USDJPY) today is up by +0.37%. The yen retreated from a 1.5-week high against the dollar today after the minutes of the June 16-17 BOJ meeting showed policymakers were concerned about ending its QE program too quickly. Also, today's decline in the 10-year JGB Japanese government bond yield to a 4-week low of 1.465% has weakened the yen's interest rate differentials. In addition, higher T-note yields today are weighing on the yen. The Japan Jul S&P composite PMI was revised upward by +0.1 to 51.6 from the previously reported 51.5. The minutes of the June 16-17 BOJ meeting were slightly dovish as many board members held the view that if the BOJ cuts its buying of Japanese government bonds too quickly, it might have an unforeseen impact on market stability. December gold (GCZ25) today is up +3.80 (+0.11%), and September silver (SIU25) is up +0.3527 (+0.94%). Precious metals today are moving higher. Dovish comments from San Francisco Fed President Mary Daly gave precious metals a boost when she said the time is nearing for Fed interest rate cuts. Also, demand for gold as an inflation hedge rose today on signs of price pressures after the July ISM services prices paid sub-index unexpectedly rose +2.4 to a 2.75-year high of 69.9. Precious metals have carryover support from last Friday's weaker-than-expected US July payroll and July ISM manufacturing reports, which boosted speculation that the Fed may cut interest rates as soon as next month. The chance of a Fed interest rate cut at the September FOMC meeting has risen to 92% today from 40% last Friday. Precious metals prices also have safe-haven support on concerns that President Trump's tariff policies will weigh on global economic growth prospects. Finally, precious metals continue to receive safe-haven support from geopolitical risks, including the conflicts in Ukraine and the Middle East. However, today's stronger dollar and higher T-note yields are limiting gains in precious metals. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
