Forexlive Americas FX news wrap 31 Mar:Markets rebound late despite tariff fears/mixed Fed ...Middle East

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The US major indices close mixed but are down for the month of March/down for the yearFed's Barkin: Its going to take a while before we get clarity on tariff impact.Fed's Williams: Its early days in figuring out impact of tariffsCrude oil settles at $71.48Trump: Yeman's Iran backed Houthis have been decimatedEuropean major indices are closing sharply lower on the dayWhite House press secretary; Trump is committed to tariffsChina, Japan, and South Korea will jointly respond to US tariffsECB sources: More members ready to accept an April pause in ratesThe viral news about a drop in Canadian air travel booking to the US is wildly overstatedTech stocks retreat: A closer look at market volatilityTesla China: Offers three year, interest-free loans for refreshed Model YDallas Fed manufacturing index for March -16.3 versus -8.3 in FebruaryGoldman Sachs raises U.S. recession risk to 35% amid trade tensions and weak confidenceGermany March preliminary CPI +2.2% vs +2.2% y/y expectedForexLive European FX news wrap: Safety bids stick as Trump tariffs loom

In the early hours, the S&P trading down as much as -92.21 points or -1.65%. The NASDAQ index traded down as much as -468 points or -2.7%. The Dow fell -435 points.

Later in the US session, Fed's Williams and Barkin spoke and although both kinda cancelled each other out (Williams a little more dovish and Barkin a little more hawkish), the markets were encouraged.

Williams a cautiously dovish tone, with a strong emphasis on uncertainty and data dependence. He repeatedly notes the unclear impact of tariffs and highlights the need to monitor both inflation and growth risks. He avoids firm predictions—particularly around recession odds—and underscores the importance of waiting for more data before making policy moves. While his comments lean toward patience and flexibility, he also signals vigilance on inflation, emphasizing the importance of keeping long-run expectations anchored. Overall, his stance favors a wait-and-see approach, leaning dovish but leaving room to adjust as the outlook evolvesIn contrast, Fed Barkin strikes a cautiously hawkish tone, emphasizing inflation vigilance and a patient, data-dependent approach. He highlights supplier price pressures and makes clear that rate cuts would require strong confidence that inflation is under control. While he acknowledges consumer fatigue and some risk in the labor market, his focus remains on inflation risks. Barkin avoids committing to any specific policy path, underscoring uncertainty and the importance of waiting to see how conditions evolve. Overall, he signals no urgency to cut rates and a preference to hold steady until the inflation outlook becomes clearer.

IN the US interest rate market, as a stocks rose, yields started to chip away at the declines in reaction to less risk off flows. A further decline in rates in the last 30 or so minutes have led to lower yields. A snapshot of the market the end of day shows:

2 year yield 3.891%, -1.9 basis points 5-year yield 3.956%, -2.3 basis points 10 year yield 4.212%, -4.2 basis points30 year yield 4.580%, -5.2 basis points

2-year yield, -35.3 basis points5-year yield -42.2 basis points10 year yield -36.2 basis points30 year yield -20.6 basis points

In the forex market, the USD was more bid today on risk-off sentiment, and although it is still closing higher on the day, it is also off the highs. Nevertheless, the biggest gains for the greenback came against the CAD, AUD and NZD (0.48%, 0.62% and 0.65% respectively) as risk off and fears of tariffs hurt those currencies.

Looking at the USDs changes were all positive vs the major currencies:

EUR +0.10%JPY +0.06%GBP +0.14%CHF +0.43%CAD +0.48%AUD +0.62%NZD +0.65%

Dow industrial average rose 417.86 points or 1.00% at 42001.76S&P index rose 30.91 point toward 0.55% at 5611.85.NASDAQ index fell -23.70 points or -0.14% at 17295.29. Russell 2000 fell -11.36 points or -0.56% in 2011.91.

The first three months of the year ended with the major indices all down.

Dow -1.28%S&P -4.59%Nasdaq -10.42%

So the 1st quarter is in the books and there not a lot to write home about as fears weigh on the market including:

StagflationHigher inflation from tariffsSlower job marketQ1 earnings coming lower

Tomorrow is a new day, and quarter.

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

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