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ANZ highlights that safe-haven flows are increasingly favoring the euro amid U.S. trade policy turmoil, with the options market signaling aggressive upside positioning. The EUR/USD risk reversal curve is at its most bullish in five years, pointing to mounting expectations for further euro appreciation.

Key Points:

• Shift in Global Confidence:U.S. trade uncertainty is eroding confidence in the USD, while Europe appears insulated due to the tariff pause and Germany’s fiscal shift.

• Safe-Haven Flows into EUR:The euro is emerging as a defensive play, especially with investor focus on stability and diversification away from USD risks.

• Options Market Signals:The three-month EUR/USD risk reversal (calls vs puts) is at a five-year high, indicating strong demand for near-term euro upside.

• Volatility Term Structure Inversion:Short-dated EUR calls are now more expensive than longer-dated ones—showing traders are rushing to buy upside exposure in the near term.

• Policy Already Priced In:ANZ’s forecast for 75bp of ECB cuts in 2025 is fully priced, meaning rate policy is unlikely to drive EUR lower in the near term.

• Pullback Risk:A modest retracement to 1.12 is possible if U.S.-Europe trade negotiations improve, but momentum remains on the upside.

Conclusion:

The euro’s rally is being fueled not just by fundamentals but by option-driven momentum, with near-term volatility and risk reversals strongly favoring more gains. Unless trade risks dissipate significantly, EUR/USD is poised to remain well bid, with ANZ pointing to continued resilience and upside potential.

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This article was written by Adam Button at www.forexlive.com.

This is a poor start to the week as the S&P 500 is down an ugly 3.3% and has seen virtually zero bounces today.

If you zoom out to the daily chart, the reciprocal pause bounce is quickly evaporating and we’re about 5% from a retest of the April lows.

I would hate to be a company that reports bad earnings this week. The big ones on the list are Tesla on Tuesday and Alphabet on Thursday but there are many companies that could offer up some insight on the economy.

This article was written by Adam Button at www.forexlive.com.

Trump today wrote that he stands behind Hagseth but maybe not if this story is correct. There could be pressure from Congress on this one.

Could something like this buy Iran more time? I’d say on net it makes the US less likely to do anything militarily that could boost oil prices.

This article was written by Adam Button at www.forexlive.com.

Fox Business’ Charlie Gasparino reports:

Japanese negotiators are complaining that the problem with the trade negotiations with the White House, what’s delaying concrete progress and a real deal, is that US keeps changing its ask in terms of exactly what it wants, said one financial CEO who speaks regularly to country officials. Maybe it’s a negotiating tactic. But the lack of publicly announced deal progress is depressing the dollar, spiking bond yields and leading to a flight to quality to gold and now Bitcoin.

Former US Assistant Secretary of Defense and veteran diplomat Chas Freeman also relayed a similar story on YouTube:

The Japanese have just been in Washington. Their experience apparently was they went to talk to the American leadership on this matter, and the American leadership said ‘what are you offering?’ And the Japanese said ‘well, what is it that you want?’ And the Americans could not explain what they wanted.’

The Art of the Deal, evidently. If I’m one of those countries, I would make a whole bunch of promises that sound good in a headline, like buying fighter planes and whatnot … then just not do those things. You’re probably only going to have to leg it out until the mid-terms.

This article was written by Adam Button at www.forexlive.com.

It’s another ugly day in the market today and tariffs are the main reason why. We haven’t heard anything that would lead us to believe this is going to be resolved any time soon but

This article was written by Adam Button at www.forexlive.com.

This was a funny tweet from Trump late yesterday in light of the $100 rally in gold today to a record high but it underscores part of the US negotiating strategy worth dwelling on.

Yes, we know the US is much richer than China and that may or may not be a problem for China, which I think can tolerate much more pain than the US.

Where it may be more important is in the rest of the world. Part of the US negotiating strategy appears to be an appeal to trading partners that they need to block out China from trade in some way in order to get relief from tariffs. It’s a something of a re-making of the Trans Pacific Partnership that Trump derided in his campaign against Hilary Clinton.

Meanwhile, China is on a charm offensive to try and shore up alliances, particularly in Asia. Today we learned that China isn’t just planning to use charm though as a statement from the Chinese Ministry of Commerce said that:

“China firmly opposes any party reaching a deal at the expense of
China’s interests. If this happens, China will not accept it and will
resolutely take reciprocal countermeasures.”

That could be seen as a threat.

In a worst-case scenario there is a scramble for every country to join one sphere of influence. That would put many countries in a bind as they would rather trade with both. Given US relationships and military might, most countries would be inclined to trade with the US but Trump’s antagonism and bullying could make that a hard sell domestically.

It’s really hard to say how this will play out and Trump’s frequent policy and messaging switches make it nearly impossible to game out.

This gave me a chuckle:

This article was written by Adam Button at www.forexlive.com.

The thing about losing the ‘Trump put’ is that it’s hard to win back. There was a time what the market would rally on this kind of comment but those days are gone and the market wants to see an actual deal.

• We’re going to make a lot of money (on tariffs)
• Tariffs are going well, everybody wants to negotiate
• Touts tariffs on autos and steel

The other problem here is that arguing for using tariffs as a revenue source argues they will stay. That’s also something trading partners see and wonder if there is any point in trying to negotiate ‘reciprocal’ tariffs.

Despite the latest positive talk from the President, the Nasdaq just hit a session low down 3%.

This article was written by Adam Button at www.forexlive.com.

There is an article doing the rounds in a source that I’m not sure is reputable but it says Nvidia is having a serious issue with an upcoming chip and “has delayed the device by months so far with no fix in sight.”

That’s certainly not helping as Nvidia shares are down 5.4% to $95.98.

It’s part of a broad selloff in the Nasdaq that has the index down 2.6% to the worst levels since Trump paused his ‘reciprocal but not reciprocal’ tariffs for 90 days.

As for Nvidia, it’s held lows in the $90 range several times in the past 10 months. The bulls will highlight that it’s only trading at 17x earnings but the bears worry that its earnings are a one-time bubble, particularly with reports that Huawei has a new chip that’s going to ship imminently.

It achieves performance comparable to Nvidia’s H100 chip by combining
two 910B processors into a single package through advanced integration
techniques, they said.

Everything is being questioned in terms of US and USD dominance at the moment.

This article was written by Adam Button at www.forexlive.com.

Fox Business Gasparino is saying Elon Musk will give guidance on when he will leave DOGE during the testing earnings call on Tuesday after the bell.

Tesla shares are down $16.80 or -6.95% to $224.59. It’s a low this year on April 7 reached $214.25.. At that time, the price tested the lows going back to October 2024. The price is down around 53% from it’s high price reached in December.

In other company specific news, Nvidia has a serious issue with upcoming chip. This new problem is serious and has delayed the device by months so far with no fixed insight. This is according to SemiAccurate but unsubstantiated otherwise . Shares of Nvidia are currently down $5.44 or 5.34% at $96.03

This article was written by Greg Michalowski at www.forexlive.com.

For what it is worth, the

• US leading index for March fell -0.7% versus -0.5%.
• Prior month -0.2% versus -0.3%

“The US LEI for March pointed to slowing economic activity ahead. March’s decline was concentrated among three components that weakened amid soaring economic uncertainty ahead of pending tariff announcements: 1) consumer expectations dropped further, 2) stock prices recorded their largest monthly decline since September 2022, and 3) new orders in manufacturing softened. That said, the data does not suggest that a recession has begun or is about to start. Still, the Conference Board downwardly revised our US GDP growth forecast for 2025 to 1.6%, which is somewhat below the economy’s potential. The slower projected growth rate reflects the impact of deepening trade wars, which may result in higher inflation, supply chain disruptions, less investing and spending, and a weaker labor market.” – Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.

Conference Board Coincident Economic Index® (CEI) – March 2025:

• Increased by 0.1% to 114.4 (2016=100), following a 0.3% increase in February.

• Rose 0.8% over the six months from September 2024 to March 2025, up from 0.7% in the previous six months.

• The CEI includes four components:

  • Payroll employment

  • Personal income less transfer payments

  • Manufacturing and trade sales

  • Industrial production

• Industrial production was the only negative contributor in March, marking its first decline since November 2024.

Conference Board Lagging Economic Index® (LAG) – March 2025:

• Decreased by 0.1% to 119.1 (2016=100), after a 0.3% increase in February.

• Six-month growth remained positive at 0.7% (September 2024–March 2025), reversing a –0.7% decline in the prior six months (March–September 2024).

Below is a look at the components that contributed and didn’t contribute to the index:

This article was written by Greg Michalowski at www.forexlive.com.

Pres. Trump is posting about “Too Late” Powell, calling for a cut from the Fed as there is virtually No Inflation.

Yesterday, Trump posted on the Non-tariff cheating, listing 8 ways of anti-competitive practices from other countries.

This article was written by Greg Michalowski at www.forexlive.com.

From Russia’s Putin:

• Fighting resumes after Easter truce

• Russia has a positive attitude to any peace initiatives, expects Kyiv to have the same attitude

• Ukraine treated truce initiative “like a game”

• We have to look at results of ceasefire

• We have to analyze this experience

• Ukraine’s activity decreased during truce

• Need to look into initiative to abstain from hitting civil targets

• Kyiv uses civilian facilities for military purposes

• On strike on Ukraine’s Sumy: there was Ukrainian servicemen’s award ceremony

• We are positive about all the peaceful proposals

• We can see that Kyiv is trying to seize the initiative with a new moratorium proposal

Ukraines Zelenskyy has a different view of the so-called Easter truce.

Meanwhile, Gold is continueing its run to the upside iwth the price now up $88 or 2.67% at $3414. The high reached $3424.53.

This article was written by Greg Michalowski at www.forexlive.com.