As Wall Street awaits numbers on GDP, inflation, jobs and megacap earnings, the latest twists in the tariff standoff have been in a positive direction. Washington appears to be rowing back some of the tensions, and there is now the prospect of at least some bilateral deals emerging over the coming week.
President Donald Trump's administration will move to reduce the impact of his automotive tariffs on Tuesday, according to officials, by ensuring car companies paying tariffs will not be charged other levies, such as those on steel and aluminum.
Meanwhile, Treasury Secretary Scott Bessent said many top trading partners of the United States had made 'very good' proposals to avert U.S. tariffs. He also noted that one of the first deals to be signed would likely be with India this week or next.
These slightly more positive soundings were enough to turn around intraday losses for the main U.S. stock indexes on Monday, and the S&P 500 ended flat, with futures a touch higher before Tuesday's bell.
North of the border, one clear political implication of Trump's trade and diplomatic policies also unfolded overnight.
Canadian Prime Minister Mark Carney was set to return as the country's leader as his Liberal Party, miles behind in opinion polls as recently as January, looks set to be the biggest party after Monday's election, albeit just shy of an overall majority.
The Canadian dollar, which has appreciated more than 3% against the greenback this month and almost 4% for the year so far, held firm as the results streamed in.
Back on Wall Street, there was a heavy diary slated for Tuesday, including April consumer confidence readouts and March trade data. March job openings numbers also kick off the week's big labor market tallies.
U.S. Treasuries rallied on Monday in advance, with a dour manufacturing survey from the Dallas Federal Reserve for April acting as a tailwind by nudging up bets for Fed rate cuts a tad.
Staying with Treasuries, 2- and 10-year yields hit their lowest in more than three weeks on Monday, although they backed up a bit today. The dollar - seemingly hurt whether Treasury yields go up or down these days - ebbed again, most obviously against China's yuan.
Sterling also hit a more than 3-year high against the dollar on Monday, with positive momentum behind UK stocks building and the Bank of England dragging its feet on interest rate cuts. It has ticked back only marginally today.
The rally in Treasuries came despite what appeared to be worrying U.S. government borrowing projections. The Treasury said on Monday it expects to borrow $514 billion in the second quarter, $391 billion higher than its February estimate, mainly due to a lower cash balance at the beginning of the quarter and projected lower net cash flows.
These figures likely do not include any revenues from tariffs, though these are still highly uncertain, and markets assume the Treasury will leave most of its auction sizes unchanged for the fifth straight quarter when it announces its refunding plans on Wednesday.
In Europe, most of the market attention was on the earnings season there.
Shares of HSBC rose 2.5% after the London-based lender launched a $3 billion share buyback, while Deutsche Bank advanced almost 3% after Germany's largest lender posted a 39% rise in first-quarter profit.
BP was a darker story, with its shares down 3.5% after the oil giant reported a deeper-than-expected 48% drop in net profit to $1.4 billion on weaker refining and gas trading.
And now I'll turn back to the U.S. and consider what could happen if the Trump administration were to take the previously unthinkable step of leaving the IMF.
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