The announcement of a 25% tariff on imported cars by the US, set to take effect on April 3, has drawn significant attention. Initially targeting fully assembled vehicles, the measure will expand by May 3 to include essential components like engines, transmissions, and electrical systems. Tariffs on imports from Mexico and Canada will vary based on domestic content. A White House official estimated revenue from these tariffs could reach $100 billion annually, though economists question this figure. President Trump warned of further actions if Europe and Canada attempt to retaliate. Additionally, he reaffirmed the US interest in acquiring Greenland, suggesting that local opposition should be addressed through persuasion.

Asia Pacific Markets

In currency movements, the Japanese yen remains under pressure, with the US dollar rebounding from its five-month low of JPY146.55 on March 11. The greenback reached nearly JPY150.95 on Tuesday and remains within that range, with key resistance at JPY151.65-70. Market indicators signal continued dollar strength, supported by rising US Treasury yields. Japanese investors have reduced foreign bond purchases but increased equity acquisitions, while foreign investors have been selling Japanese stocks but buying bonds.
The Australian dollar saw a brief rise to $0.6330 before reversing downward amid a risk-averse trading environment. It dropped below $0.6280 and remains within a tight range. Ahead of the May elections, Australia's government has introduced tax cuts and fiscal measures, impacting market sentiment. The Australian dollar’s recent recovery was tied to a narrowing yield discount against US bonds, which has now widened slightly to around 25 basis points.

European Markets

The euro dipped below its 20-day moving average, touching $1.0725 before recovering towards $1.0790. Its movement reflects shifts in the US-German yield spread, which has risen to 188 basis points. Meanwhile, February money supply in the eurozone showed a 4% annual increase, signaling a gradual economic recovery.
The British pound faced selling pressure after a slight decrease in February inflation and additional losses following the budget announcement by Chancellor Reeves.

American Markets

The US Dollar Index surged to nearly 104.70, its highest since early March, before consolidating within the 104.00-20 support zone. The latest update from the Atlanta Fed predicts a 1.8% contraction in Q1 GDP, though many economists are skeptical of such a sharp decline.
Trade data remains a key focus, with January's record $155.6 billion goods deficit leading to expectations of a still-wide February deficit around $138 billion. If gold imports contributed to increased inventories, the deficit could be even larger. Wholesale inventories are projected to rise further after previous accumulation. Additionally, while weekly jobless claims may create market volatility, next week’s employment report is of greater significance, as analysts anticipate a slowdown in job growth and a slight uptick in the unemployment rate.