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EGBS: Only Modestly Off Highs On Potential April Start For Reciprocal Tariffs

EGBS
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  • Risk-on flows following CNBC’s Javers saying there won’t be an announcement on the immediate installation of reciprocal tariffs has helped EGBs more meaningfully move off highs but moves are very much contained.
  • If accurate, and it could well be rebuffed by Trump in due course ahead of an expected announcement at 1pm ET, it would mark a further delay in tariffs. As noted earlier, the proposed tariffs on steel & aluminium for Mar 12 have limited macro impact compared to other industries as such chemical products, vehicles and broader manufacturing (where reciprocal tariffs could impact).
  • See https://marketnews.com/eu-response-to-steel-and-aluminium-tariffs-alone-likely-small-12-1739444031579 and https://marketnews.com/but-eu-still-exposed-to-reciprocal-tariffs-due-today-22-1739444107470.
  • Dovish spillover from US PPI details and Russia-Ukraine peace prospects still ensure large gains on the day though.
  • RXH5 for instance is only 10 ticks off session highs of 132.93, having come close to resistance at 133.00 (50-day EMA) after which lies 133.71 (Feb 5 high).
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  • Risk-on flows following CNBC’s Javers saying there won’t be an announcement on the immediate installation of reciprocal tariffs has helped EGBs more meaningfully move off highs but moves are very much contained.
  • If accurate, and it could well be rebuffed by Trump in due course ahead of an expected announcement at 1pm ET, it would mark a further delay in tariffs. As noted earlier, the proposed tariffs on steel & aluminium for Mar 12 have limited macro impact compared to other industries as such chemical products, vehicles and broader manufacturing (where reciprocal tariffs could impact).
  • See https://marketnews.com/eu-response-to-steel-and-aluminium-tariffs-alone-likely-small-12-1739444031579 and https://marketnews.com/but-eu-still-exposed-to-reciprocal-tariffs-due-today-22-1739444107470.
  • Dovish spillover from US PPI details and Russia-Ukraine peace prospects still ensure large gains on the day though.
  • RXH5 for instance is only 10 ticks off session highs of 132.93, having come close to resistance at 133.00 (50-day EMA) after which lies 133.71 (Feb 5 high).