The North American trading session on 11 March 2025 featured multiple tariff-related developments. President Trump imposed a 25% tariff on Canadian steel and aluminium imports, responding to Ontario’s electricity surcharge, which was later revoked following discussions with U.S. Commerce Secretary Lutnick.
Market reactions were volatile, with stocks initially declining but rallying after the tariff withdrawal, only to finish lower by the close. Major indices showed selling pressure despite brief gains during the session.
Us Debt Market Trends
In the US debt market, yields increased across various maturities. The 2-year yield rose to 3.949%, while the 30-year yield reached 4.596%.
In Forex, EURUSD aimed for a high not seen since October, while USDCAD fluctuated between key moving averages, closing around 1.4427. GBPUSD showed gains above critical support levels, with targets at 1.3000 and 1.3044-1.3058 forthcoming.
Lutnick’s involvement in the discussions ultimately eased market concerns, but the initial reaction to the tariff announcement underlined how sensitive equities remain to abrupt policy changes. The retreat in indices after an early rebound suggests that investors had already incorporated some expectations of trade frictions into their positioning. However, the degree of selling into the close points to lingering caution, a response that should not be ignored.
Debt markets reflected a different sentiment. The increase in yields, particularly in shorter maturities, indicates a recalibration of interest rate expectations. With the 2-year yield nearing 3.95% and the 30-year approaching 4.60%, participants are reassessing the direction of monetary policy. Yield curves have long served as indicators of market sentiment, and the shifts observed on 11 March imply a growing focus on inflation and central bank trajectory rather than short-term trade manoeuvres.
Foreign Exchange Market Insights
Foreign exchange markets added an additional layer of complexity. The euro’s strength against the dollar accentuated the return of October highs as a focal point, while the Canadian dollar’s fluctuations reflected the shifting tariff narrative. Sterling’s movement past key levels reinforced expectations of stability, with 1.3000 remaining an area of focus. As momentum builds toward the 1.3058 range, traders will need to assess whether recent strength represents sustained positioning or mere reaction to external catalysts.
The coming sessions are expected to test whether market participants have fully accounted for recent disruptions or if further realignments lie ahead.
