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This was a funny tweet from Trump late yesterday in light of the $100 rally in gold today to a record high but it underscores part of the US negotiating strategy worth dwelling on.

Yes, we know the US is much richer than China and that may or may not be a problem for China, which I think can tolerate much more pain than the US.

Where it may be more important is in the rest of the world. Part of the US negotiating strategy appears to be an appeal to trading partners that they need to block out China from trade in some way in order to get relief from tariffs. It’s a something of a re-making of the Trans Pacific Partnership that Trump derided in his campaign against Hilary Clinton.

Meanwhile, China is on a charm offensive to try and shore up alliances, particularly in Asia. Today we learned that China isn’t just planning to use charm though as a statement from the Chinese Ministry of Commerce said that:

“China firmly opposes any party reaching a deal at the expense of
China’s interests. If this happens, China will not accept it and will
resolutely take reciprocal countermeasures.”

That could be seen as a threat.

In a worst-case scenario there is a scramble for every country to join one sphere of influence. That would put many countries in a bind as they would rather trade with both. Given US relationships and military might, most countries would be inclined to trade with the US but Trump’s antagonism and bullying could make that a hard sell domestically.

It’s really hard to say how this will play out and Trump’s frequent policy and messaging switches make it nearly impossible to game out.

This gave me a chuckle:

This article was written by Adam Button at www.forexlive.com.

The thing about losing the ‘Trump put’ is that it’s hard to win back. There was a time what the market would rally on this kind of comment but those days are gone and the market wants to see an actual deal.

• We’re going to make a lot of money (on tariffs)
• Tariffs are going well, everybody wants to negotiate
• Touts tariffs on autos and steel

The other problem here is that arguing for using tariffs as a revenue source argues they will stay. That’s also something trading partners see and wonder if there is any point in trying to negotiate ‘reciprocal’ tariffs.

Despite the latest positive talk from the President, the Nasdaq just hit a session low down 3%.

More:

• Asked about the EU says ‘we will end up having a deal’
• Good chance of a Russia-Ukraine deal this week

This article was written by Adam Button at www.forexlive.com.

Looking back over time, the 1.3436 level—first reached on March 6, 2022—has consistently acted as a key resistance zone. The market approached this area again on September 22, peaking at 1.3433, and on September 23, with a high of 1.3423.

Today, nearly seven months later, GBPUSD pushed as high as 1.34213, falling just short of the lower boundary of that established swing zone between 1.3423 and 1.3436. Not surprisingly, the price has since rotated modestly lower from that area.

This zone continues to serve as a significant technical ceiling, and there is good reason for traders to show caution near this level. Since bottoming in the week of January 19, GBPUSD has trended steadily higher, nearly retracing its full 2024 decline.

With resistance clearly defined, traders are likely to lean against the 1.3436 area, using it as a level to define risk. Stops can be placed just above, making the risk relatively limited for those fading the rally.

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices are continuing their early week fall.

• The NASDAQ index is now down on his 2.34%.
• The S&P index is down -1.84% and the
• Dow industrial average is down -1.69%.

The small-cap Russell 2000 is down -1.50%.

Taking a look at some specific stocks:

• Nvidia shares are down -4.75%
• Amazon is down -3.36%.
• Meta is down -3.40%
• Microsoft is down -1.93%
• Alphabet is down -2.77%

This article was written by Greg Michalowski at www.forexlive.com.