A Morning for the Ages

Housekeeping: Good Morning.

“All Gold is monetary Gold ”

Today

• Discussion: Tariffs, Treasuries, and Tactics The Global Repricing of U.S. Risk

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Analysis:

As we wrote this CPI came in very low.

• CPI -0.1% MoM, Exp. 0.1% CPI Core 0.1% MoM, Exp. 0.3%

• CPI 2.4% YoY, Exp. 2.5% CPI Core 2.8% YoY, Exp. 3.0%

Gold proceeded to rally to 3128. Everything else did almost nothing so far.  Some commentary will be posted on Substack in a thread this morning.

The Global Repricing of U.S. Risk

1. Capital Flight and Currency Defense
   Global investors are exiting U.S. assets as China responds to tariffs by selling Treasuries rather than devaluing the yuan. Japan is quietly repatriating capital, mirroring China’s likely moves. This marks a shift toward financial onshoring as a counter to the dollar’s weaponization.

2. Safe Havens Redefined
   Gold and local currencies are emerging as the only perceived safe assets. The U.S. dollar is no longer viewed as a refuge. Domestic markets are now reactive to Asia’s moves, with price action during U.S. hours driven by geopolitical uncertainty and monetary policy speculation.

3. The 1:18 PM Reversal
   Trump’s announcement to suspend reciprocal tariffs for non-retaliating countries flipped the market. Gold, stocks, and crypto surged. The move isolates China while disincentivizing broader retaliation, signaling a shift to tactical tools in an otherwise strategic trade war.

4. Systemic Leverage and Structural Risk
   Hedge funds engaged in leveraged cross-border basis trades—borrowing foreign currencies to buy U.S. assets—are under pressure. As FX and rate assumptions break down, these trades echo the stress seen in the 2019 repo crisis. Major funds like Citadel and Millennium are exposed. The implications for consumers and savers are yet to surface.

5. The Outlook From Here:

   Tariff ceasefires, trade partner negotiatons and attempts to isolate each other form the global community. Trump’s horsetrading technique is about to be center stage

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Market Recap:

Wall Street soared after Trump announced a 90-day tariff pause for many countries, relieving investors. Treasury yields pared gains following a strong 10-year notes auction. The dollar was little changed, while gold rose as Trump further increased tariffs on China. Oil prices bounced back from four-year lows.

Canada's main stock index closed higher after U.S. President Donald Trump announced an immediate 90 day pause on tariffs for several countries, offering some relief to investors concerned about the global economic fallout from U.S. trade policies. Toronto Stock Exchange's S&P/TSX composite index closed 5.42% higher at 23,727.03 points.

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Market News:

• Trump temporarily lowers tariffs for most countries, raises them for China

• Magnificent Seven to add more than $1 trillion in value after

• Trump administration backs off Nvidia's H20 chip crackdown after Mar-a-Lago dinner, NPR reports

• Delta Air Lines pulls financial forecast, saying Trump tariffs hit demand

• Walmart backs annual forecasts and vows to keep prices low amid tariff woes

Full Stories in Premium at Bottom…

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Data on Deck: CPI/ PPI

• MONDAY, APRIL 7 Consumer credit

• TUESDAY, APRIL 8 NFIB optimism index

• WEDNESDAY, APRIL Minutes of Fed's March FOMC meeting

• THURSDAY, APRIL 10 CPI Monthly U.S. federal budget

• FRIDAY, APRIL 11 PPI year over year3.3%¹

Summary and Final Market Check

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