Market volatility remains high, due to the tariff wars, launched by the Trump administration. Trump had imposed tariffs on Canada, Mexico and China, over the weekend, coming into effect Monday. Furious phone calls and diplomacy suspended the effectiveness of these tariffs, in both Mexico and Canada, as both Countries caved to Trumps immediate demands. Promised negotiations, for the outstanding issues, over the next month. China had only a 10% tariff levied on their exports, but they decided to retaliate, and are now locked in an effective trade war with the USA. The USA is holding all the cards, as they run massive trade deficits with all these Countries. Europe and the UK are next in line for tariffs, so it will be interesting to see how they respond. The Jolts Jobs report from the US, was weaker than expected, dimming predictions for the important Non-Farm Payroll number, set to be released Friday. The US Dollar declined followed the suspension of tariffs, with the EUR heading back towards 1.0400, while the GBP popped above 1.2450.The rise in the reserve allowed a relief rally in commodity currencies, with the AUD pushing back to 0.6250, while the NZD jumped to 0.5650. NZ Employment data will be released today, which may influence local markets, although expectations are not high. All eyes are firmly on the evolving trade wars.
