Risk returns as stocks hit new highs
US Treasuries weakened as equities surged to fresh highs. S&P 500 closed above 7000 (+0.8%), Nasdaq notched an 11th straight gain (+1.6%). The move came as headlines suggested the US and Iran are weighing a two-week ceasefire extension to allow for more negotiations, easing some geopolitical risk. The 10-year yield rose 3.5bps, with the curve bear steepening.
US data was mixed: core import prices rose just 0.1% in March, while the Empire manufacturing index jumped to 11.0, beating expectations. However, input costs are rising, with prices paid components reflecting higher energy prices amid ongoing Middle East tensions. WTI crude slipped 1%, while Brent was little changed.
In New Zealand, Finance Minister Willis flagged global concern over oil-driven inflation risks.
Japan’s Finance Minister warned of “bold” FX action if needed, USD/JPY up 0.13% overnight.
The dollar index is now at 98.06. Overnight, AUD/USD gained 0.60%, USD/SGD flat, and USD/CNH rose 0.11%
Yellen leaves the door open for a US rate cut
Former Fed Chair Janet Yellen said a US rate cut later this year is still possible, although the path ahead remains uncertain. Speaking at an event alongside the IMF meetings in Washington DC, she said her base case still points to lower rates, but stressed that the economy could evolve in many different ways. She added that further rate increases cannot be completely ruled out.
Yellen sharply criticised former President Donald Trump, pushing back against his calls for rate cuts to lower government borrowing costs. She said such pressure on a central bank is typical of “a banana republic” and warned that similar approaches have led to severe inflation in other countries. Yellen also said that if Kevin Warsh were to become Fed chair, he would likely struggle to persuade other policymakers that productivity gains from AI alone justify lower interest rates.
In FX, the Australian dollar pushed higher overnight and outperformed its peers. AUD/CNH climbed to a three‑week high, while AUD/USD is now trading around 0.2% below its recent peak near 0.7187, set on 11 March.
On the downside, the next key support for AUD/USD lies at 21-day EMA of 0.7038, followed by 50-day EMA of 0.6996.
Tariff threat returns
US tariffs that were previously struck down by the Supreme Court could be reintroduced as early as July, according to Treasury Secretary Scott Bessent. Speaking at a Wall Street Journal event in Washington on Tuesday, he said the White House could restore duties to earlier levels under Section 301. A temporary 10% tariff on many imports is due to expire on July 24, while new investigations could lead to additional levies in the coming months.
In Asia, USD/SGD has climbed 1% from its recent low of 1.2586, last seen on 28 January. The next key resistance sits at the 21-day EMA of 1.2772, followed by 100‑day EMA at 1.2801.
USD buyers may look to take advantage now.
Aussie top G10 performer overnight
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 6 – 11 April
All times AEST
Have a question? [email protected]
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
