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On August 18th, according to South Korean media reports, Trump, when discussing the joint US-South Korea military exercises, mentioned South Koreas defense costs and its refusal to participate in a war with Iran, expressing his dissatisfaction. He said, "South Korea has been protected by us for decades. During my first term as president, they agreed to pay nearly $3 billion a year for protection. I asked for $10 billion, and they were unhappy about that. The agreement we reached was to pay $3 billion in the short term, increase it after one year, and increase it again the following year." Trump then claimed, "I watched as Biden (former president) withdrew that $3 billion for some reason." Trump also stated, "Recently, when I spoke with the South Korean president (Lee Jae-myung) on the phone, I said, Would you be willing to offer some help? We dont need your help on Iran, but if you want to help, then help. And he said, Were not going to participate." Trump continued, "We have 39,000 US troops deployed in South Korea, and youre unwilling to help us in such an easy military operation as Iran. Its really strange."Market news: Anthropics annualized revenue surpassed $65 billion prior to its IPO.Sources familiar with the matter revealed that some North American auto industry officials believe that either option would be an improvement over the current 25% tariff imposed by the United States on Canadian cars, since the tariff rates on cars from Japan, South Korea, and the European Union are only 15%.Sources familiar with the matter revealed that U.S. officials proposed deducting only the U.S. domestic value from the 15% tariff on Canadian cars, but Canadian officials wanted to deduct all North American components.Sources familiar with the matter revealed that, after deducting certain value components, the United States and Canada are in talks to reduce U.S. auto tariffs from the current 25% to 15%.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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