Trump's Tariff Pause Does Little To Lower Overall Tariff Rates, Yale Researchers Say

(April 10): Oil prices retreated 2% on Thursday as fears of a deepening US-China trade war and a possible recession eclipsed earlier relief created by President Donald Trump's announcement of a 90-day pause on some tariffs against most countries.

Brent futures fell US$1.55, or 2.37%, to US$63.93 a barrel by 1027 GMT. While US West Texas Intermediate crude futures dropped US$1.51, or 2.42%, to US$60.84.

The retreat followed a volatile session on Wednesday, when crude benchmarks, which had tumbled as much as 7% earlier in the day, ended around 4% higher following Trump's announcement of a pause on reciprocal tariffs on most countries, though he maintained a baseline tariff rate of 10%.

However, the reprieve excluded China. Trump increased tariffs on Chinese imports to 125% from 104%, deepening a trade standoff with the world's second-largest economy and a leading consumer of crude.

The trade war between the US and China leaves significant uncertainty over oil demand growth with more risk to downside for prices, said Ashley Kelty, analyst at Panmure Liberum.

"Volatility remains high, and it remains tricky to see where oil prices may settle in near-term," said Kelty.

China also announced an additional import levy on US goods, imposing an 84% tariff from Thursday.

Despite the tariff pause, Ole Hansen, head of commodity strategy at Saxo Bank, said the world was still facing the most severe trade barriers since the 1930s.

"With a lot of uncertainty still existing, the prospect for a major rebound in crude is not possible at this stage when the market has to deal with the risk of weakening demand and rising production from Opec," said Hansen.

Analysts at ANZ Research warned that a deeper global slowdown could push prices lower still.

"In a worst-case scenario of a global recession (which is not our base case), there is scope for further weakness... for oil, we view US$50/bbl as a likely support level," the analysts said in a note.

Investors were eyeing mixed supply drivers as well.

The Keystone oil pipeline from Canada to the United States remained shut on Wednesday following an oil spill near Fort Ransom, North Dakota, while plans to return it to service were being evaluated, its operator South Bow said.

Elsewhere, the Caspian Pipeline Consortium resumed loading oil at one of two previously shut Black Sea moorings, it said on Wednesday, after a court lifted restrictions put on the Western-backed group's facility by a Russian regulator.

In the United States, crude inventories rose by 2.6 million barrels in the week to April 4, the Energy Information Administration said, nearly double the expectations in a Reuters poll for a 1.4-million-barrel rise.

Source: Theedgemarkets

Underlying US inflation cooled broadly in March, indicating some relief for consumers prior to widespread tariffs that risk contributing to price pressures.

The consumer price index, excluding often volatile food and energy costs, increased 0.1% from February, the least in nine months, according to Bureau of Labor Statistics data out Thursday. Compared with March of last year, the core CPI rose 2.8%, remaining the tamest in nearly four years.

The overall CPI declined 0.1% from a month earlier, the first decrease in nearly five years, and rose 2.4% on a year-over-year basis.

The CPI was helped by a decline in energy costs, used cars and airfares, as well as slower price growth in apparel.

Treasury yields slid and S&P 500 index futures remained lower and the dollar extended its decline on the day.

While the figures indicate some relief for consumers who have struggled with higher prices for years, the good news risks being short-lived after President Donald Trump put in place more expansive tariffs.

While Trump announced 90-day pause on higher reciprocal tariffs on Wednesday — less than 24 hours after they came into effect — imports from most countries are now subject to 10% duties. The US began collecting tariffs last month on imported steel and aluminum, and levies on China now stand at 125% after retaliation from Beijing earlier this week.

Some of the higher import costs will ultimately be passed on to the consumers, and companies from Target Co. to Volkswagen AG have warned higher prices are in store for Americans.

The uncertainty is keeping Federal Reserve officials in wait-and-see mode as they look for more clarity on the impact the levies will have on inflation — and the economy more broadly.

Source: Bloomberg Europe

Crypto mining companies also saw gains, with MARA Holdings (MARA) up 17%, Cipher Platforms (CIFR) up 16.59%, and Riot Platforms (RIOT) rising 12.77%.

Michael Saylor’s Strategy, formerly known as MicroStrategy, surged 24.76% during the trading day. Source: Google Finance

Source: Cointelegraph

Above: Pound to Dollar rate shown at 15-minute intervals, with GBP/EUR. Click for closer inspection.

“The other alternative is that they come to the negotiating table with Trump and Trump gives them reduced tariffs, far lower than 104%, maybe back to 10% or so and the Chinese agree to let their currency strengthen. We all know it is undervalued, by quite a bit, and this has been a bee in Trump's bonnet,” he adds.

Above: GBP/CNY shown in green, alongside USD/CNY and EUR/CNY.

Source: Poundsterlinglive

Gold rose again after posting its biggest one-day gain in 18 months, as confusion over US President Donald Trump’s tariff agenda drove investors to buy the precious metal as a haven.

Bullion climbed as much as 1.6% on Thursday and was trading less than $50 short of last week’s all-time high. That’s after it closed up 3.3% on Wednesday in a whipsaw day for markets. The precious metal has also been supported by a weaker greenback.

Gold’s initial surge in the previous session came after US tariffs on around 60 trading parters kicked in, fueling market upheavals and increasing worries about a global recession. Then Trump announced a 90-day pause to higher tariffs on 56 countries and the European Union, which will now be taxed at the 10% baseline rate.

“When you’re in a crisis and gold is selling off, that’s telling you you’ve got a liquidity problem,” Carlyle Group Inc.’s Jeff Currie told Bloomberg Television on Thursday. “Then boom, they came out with the reprieve, gold bounced back up which is telling you liquidity came back into the system,” he said.

Still, Trump also hiked duties on China to 125%, effective immediately, after Beijing announced plans to retaliate with an 84% tariff to start Thursday. Those moves are exacerbating concerns the world’s two biggest economies will become enmeshed in a crippling trade war.

Markets rallied after Trump’s tariff-pause announcement. US stocks had their best day since the financial crisis, with the S&P 500 soaring nearly 10%, after slumping to the fringe of a bear market in the past week.

The constant back-and-forth of the US administration’s tariff plan has rocked the world, as investors scramble to find direction and certainty. That’s generally been supportive for gold, which is up 19% this year. The metal has also been bolstered by hopes for more Federal Reserve monetary easing and central-bank buying.

“We remain quite positive for gold,” Dominic Schnider, head of commodities and Asia Pacific currencies at UBS Global Wealth Management, said on Bloomberg Television. “The next step is going to be, at some point, the Fed coming in — and that gives the next leg up for gold.”

Source: Yahoo Finance