Insights 
VT 
G10 Currency Trends
G10 currencies are showing varied performances as most currencies recover part of the recent post-Fed losses against the US Dollar. JPY, SEK, and NOK are performing well, while GBP, EUR, and MXN show slight gains and CAD remains stable. The AUD and CHF exhibit minor losses, with NZD down 0.3% against the USD. Attention is on US/China trade discussions, with potential tariff reduction rumours below 60%.
China’s March trade figures reveal a higher than anticipated trade balance due to robust export growth. Global equity indices experience upswing, with the German DAX reaching a new high and US equity futures stabilising. US Treasury yields slightly rise with the 10-year yield approaching 4.40% and the 2-year reaching around 3.87%.
Oil prices rise above $60 per barrel following an earlier decline, while copper remains stable and gold consolidates recent losses. The US data calendar on Friday is empty, with focus shifting to Federal Reserve speakers. These include BoG member Barr and others, whose comments may influence market tone.
What we’ve seen in recent sessions is a mixed recovery across the G10 currency spectrum, a patchwork of modest reversals following last week’s post-Fed repositioning. Some, like the yen and the Scandi pairs, moved with more conviction, reclaiming earlier losses as rate differentials steadied in their favour. Sterling and the euro crept higher, though the pace was slow – likely restrained by traders staying cautious around upcoming data revisions and central bank signals. The Canadian dollar flatlined, aligning with a broadly neutral tone in oil and local yields. Meanwhile, antipodean currencies traded weaker, with the kiwi slipping a deeper fraction as markets pulled back expectations around RBNZ tightening.
What’s now drawing our eye are murmurs of easing trade rhetoric between Beijing and Washington. Reports pointing to less than even odds for tariff changes should temper enthusiasm, yet the momentum in China’s trade data gives reason to keep a close hand on commodity exposure. Export activity was clearly underpriced going into March, and that strength likely props up global demand—at least in appearance. German equities breaking into fresh territory reinforces that narrative, with the DAX pushing through previous highs on the back of stronger industrial sentiment. There’s an undercurrent of optimism, however fragile, that’s being relayed via equity futures in New York as well. Stability on that front tends to dull demand for safe havens, a factor worth watching once again in fixed income positioning.
Commodity and Interest Rate Outlook
Yields in the US nudged higher, particularly along the long end, and with the 10-year eyeing the 4.40% mark, we’re approaching technical levels that could test recent complacency. The flatter slope created by the relatively anchored 2-year rate suggests markets are continuing to weigh soft-landing probabilities, rather than bracing for immediate inflation resurgence. As always, traders should calibrate interest rate expectations in light of this curve behaviour – short-end sensitivity may stay muted, but long-end duration could become more reactive in thin markets.
On the commodity side, crude’s comeback above $60 per barrel was not without drivers, reversing from early-week lows alongside broader asset reflation. Some may want to keep a check on positioning in the metals space; copper continues to tread water, but with Chinese trade surprising to the upside and industrials rallying, one can imagine inflows resuming swiftly. Gold found a footing, consolidating after a rough stretch, though it has yet to attract meaningful hedging flows in this mildly risk-on backdrop.
Friday’s bare US calendar magnifies the importance of upcoming central bank commentary. We’ll be listening closely to speakers like Barr, who could offer subtler cues on the path forward. While no immediate policy shifts are forecast, any deviation in tone – hawkish or dovish – may move implied vol on short-dated interest rate futures. We’ve seen similar instances before where quiet data days lent unexpected weight to just a handful of remarks. It’s a lighter week in scheduled risk, but that can also mean traders are more vulnerable to sharp reactions if expectations are caught off guard. Best to tread carefully and be ready to recalibrate.
