White House Rolls Out Tariff Relief for Auto Sector Amid Rising Trade Tensions

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3720-1.3950

Euro                 1.5600-1.5850

Sterling            1.8350-1.8590

WTI Oil (opening level) $59.94

The CAD/USD is opening at 1.3833 ( 0.7229 )

Headlines

·    Trump criticized Fed Chair Powell once again late yesterday, saying he’s “not really doing a good job” and that he knows more about interest rates than the Fed Chair does.

·    Australia Q1 CPI out at 2.4% YoY vs. 2.3% expected and 2.4% in Q4. The Q1 Trimmed Mean CPI (core) was out at 2.9% YoY vs. 2.8% expected and an upward revised 3.3% (from 3.2% ) in Q4.

·    As was flagged in the media the day before yesterday, Trump will sign three orders today to reduce tariffs on auto manufacturing, offering rebates for US-made cars and exempting imported parts from steel and aluminum tariffs.

·    Ahead of Amazon.com’s earnings after the close tomorrow, US press secretary Karoline Leavitt said that the company’s purported plan to display the impact on each product it sold from US tariff hikes amounted to a “hostile and political act”.

·    The US goods trade deficit hit a record $162 billion in March 2025, above the expected $146 billion, as firms increased imports due to tariff threats. Imports grew 5% monthly and 30.8% annually to $342.7 billion, led by consumer goods, industrial supplies, and capital goods.

·    China's factory activity has slipped into contraction, with the official manufacturing PMI index falling to 49 from 50.5 in March, suggesting early damage from Donald Trump's tariffs, which are expected to hurt a sector that contributed to nearly a third of the economy's growth last year. The downbeat indicators for factories followed an earlier warning sign for China’s exporters, with cargo shipments plunging possibly by as much as 60%, according to one estimate

Key Points

·    Equities: Sixth day of US gains; DAX hits 1-month high; FTSE extends winning streak

·    Volatility: VIX dips under 25; short-term vols mixed; Amazon options imply 7% move

·    Digital Assets: Bitcoin steady; altcoins mixed; MSTR +3.3%; XRP ETF decision delayed

·    Currencies: AUD gets a bump on stronger than expected CPI. USD and JPY firm ahead of key US data and BoJ tonight.

·    Fixed Income: US long treasury yields edge to new three-week lows

·    Commodities: Crude sees historic April selloff; Gold softer as China goes on holiday