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Markets saw reduced volatility yesterday, with the quietest trading day since the new US tariff plans were announced, despite confusion over tech tariffs.

1. Markets finally slowed down quite a bit yesterday, with volatility dropping almost everywhere, after two weeks of exceptionally high volatility and several assets reaching new long-term low or high prices, notably major US stock indices, the US Dollar, and Gold. The news on tariffs is dominated today by two issues:

   1. Ongoing confusion over exactly which tariff will apply to electronic imports from China - is it 0% or 20%?

   2. President Trump floated a further exemption, this time to automobile imports, which boosted major automotive equities.

2. The current US tariff position is as follows:

   1. 145% on Chinese imports (except for electronics which may be 0% or 20%)

   2. 25% on Mexican and Canadian imports, except for imports of goods covered by pre-existing agreements.

   3. 25% tariff on automobile imports.

   4. 10% tariff on everything else (which may rise country by country at the end of the 90-day pause, which will expire on 7^th July.

3. Stock markets are trading higher so far today, likely boosted by optimism over the potential exemptions to the new US tariffs, and the outcome of trade negotiations with major trading partners. It may be that markets will now get stuck into recovery mode, with major bad news elements pushed off to June or July. The Chinese HSI is trading up by 0.13% and the Japanese Nikkei 225 Index is up by 0.84%. The biggest major gainer today is the German DAX 30 which is up by 0.96% at the time of writing. So, stocks are up, but not by very much.

4. In the Forex market, since today's Tokyo open, the stronger major currency is the New Zealand Dollar, while the weakest is the Swiss Franc, so it seems the market is clearly in risk-on mode as the London session gets underway. We have also seen a weak US Dollar, which reached a new 4-year low last Friday, but the US Dolar Index may now be finding support at 99.27, giving a potential long USD trade setup for longer-term traders. The two major currency pairs, the EUR/USD and the USD/JPY are both in strong long-term trends.

5. Spot Gold made - barely - a new record high yesterday but pulled back a little and is now making a shallow consolidation about $20 off the high. Trend traders will still want to be long here.

6. Bitcoin is looking quite bullish as it challenges recent highs near the crucially resistant $86,215 level. Getting established above that level would be a bullish sign.

7. The US National Economic Council Director Kevin Hassett stated yesterday that over 10 countries had made "very good" trade deal offers to the USA.

8. The Bank of Canada is seen as less likely to pause in cutting rates at its policy meeting tomorrow, as the 25% tariffs, rising Canadian inflation, and weaker employment numbers suggest the need for urgent economic stimulus has diminished. Analysts now see only a 58% chance that the Bank will cut tomorrow by another 58% - which is still more likely than not. Canadian CPI (inflation) data due for release today is expected to show an unchanged annualized rate at 2.5%

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