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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

The dollar against the yen is hovering near a three-year high! Risk sentiment remains weak

Oct 26, 2021 11:05

After testing a three-year high of 114.46 in Asian markets in early trading on Monday (October 18), USD/JPY consolidated above 114.00, and the bulls paused before resuming the upward trend.


The exchange rate closely follows the trend of U.S. Treasury yields, and the benchmark 10-year Treasury bond yields are also trending. Yields rose again and pushed up the currency pair to the multi-year top it hit last Friday.

However, the 10-year Treasury bond yield seems to be unable to break through 1.60% without follow-up buying, limiting the exchange rate to a 3-year high.

The decline in the exchange rate is still limited by the strengthening of the US dollar, because the market risk tone remains weak.

Concerns about the slowdown in global economic growth have resurfaced within the day, and the surge in oil prices has weakened market sentiment and supported the dollar bulls.

At the same time, Japanese Prime Minister Fumio Kishida said that he has no plans to change the sales tax. Since there are relatively few data in the United States, the exchange rate may be affected by broader market sentiment and yield price movements.

However, as the Fed’s hawkish expectations continue to rise, the Fed’s speech will attract more attention.

USD/JPY technical outlook


FXStreet analyst Christian Borjon Valencia explained, “The first resistance was at 114.54, the high of October 4, 2018, which is a key level. The exchange rate has been blocked four times in four years. If it breaks through this level, the exchange rate will rise further. Clear the obstacles and point to key resistance levels, such as the high of 115.37 on January 27, 2017, and then the high of 117.52 on January 9, 2017. On the other hand, if it breaks 114, it will open the door to decline, and the current RSI will exceed purchase. "

(Daily chart of USD/JPY)

At GMT+8 16:36, the USD/JPY traded at 114.35.