US Dollar Falls Early Tuesday Ahead of Busy Schedule

German government bonds and the euro show little reaction to an improvement in Germany's economic outlook measured by the Ifo indicator. Expectations rose to 87.7 in March from 85.6 in February, missing economists' forecast of 88.0 in The Wall Street Journal's poll. The 10-year Bund yield trades 3.5 basis points higher at 2.817% after the data, compared with 2.798% beforehand, according to Tradeweb. The euro stays weaker against the dollar, last down 0.1% at $1.0789, compared to $1.0792 before the data. Better data was widely expected as Germany's fiscal expansion plans have already boosted sentiment, as shown in the ZEW index and purchasing manager indices. (emese.bartha@wsj.com)

The latest Market Talks covering U.S. politics. Published exclusively on Dow Jones Newswires throughout the day.

0501 ET - The euro could be set to rise if Russia and the U.S. announce a positive update on Ukraine ceasefire talks later, ING analyst Francesco Pesole says in a note. Russia and the U.S. are expected to issue a joint statement Tuesday about the progress of negotiations. "Indications that some agreement is building around a full ceasefire would support European sentiment and the euro," Pesole says. Barring that, fading optimism over a quick truce would make generally overvalued European currencies trade softer, he says. For now the euro weakens as the dollar gains. The euro falls 0.2% to a near three-week low of $1.0777, according to FactSet.(renae.dyer@wsj.com)

0340 ET - The dollar rises as optimism over more targeted U.S. tariffs and stronger-than-expected U.S. services data soothe concerns about slowing economic growth. The WSJ reported over the weekend that the Trump administration is narrowing its approach to tariffs that are set to take effect on April 2. On Monday, the flash U.S. services purchasing managers' survey for March exceeded expectations with a reading of 54.3, signalling growth in sector activity. The dollar is also supported by investors buying the currency to rebalance their portfolios before month-end and quarter-end. The DXY dollar index rises 0.1% to 104.347, having reached a near three-week high of 104.444 Monday. (renae.dyer@wsj.com)

0330 ET - The 10-year U.S. Treasury yield will likely trade in a range between 4.25% and 4.35% this week, say ING's Benjamin Schroeder and Padhraic Garvey in a note. "Any attempt to make a material break above this would be constrained by worries about what 2 April brings," the rates strategists say, referring to the announced initial date U.S. President Trump's reciprocal tariffs. They see 4% as a hard floor for the 10-year Treasury yield that can only be broken on materially weak data, they say. "The area of 4.25% is a comfortable distance above that." The 10-year Treasury yield, which rose 8 basis points on Monday after PMI data, is flat at 4.329% in early European trade, according to Tradeweb. (emese.bartha@wsj.com)

1608 ET - Another confidence gauge in Canada hits a record low amid elevated trade-policy uncertainty. The Conference Board of Canada said its consumer-confidence index reached a nadir in March. Half of respondents, or 49.6%, say they anticipate fewer job openings over the next six months, marking a record high. The board says the share of households envisaging a "worsening" financial future jumped by 4.7 percentage points from the previous month to 33.9%, or the highest level in the post-pandemic period. Last week, a widely followed gauge of small-business confidence plunged to a record low. Private-sector economists expect a recession in Canada, starting in 2Q, as President Trump's repeated tariff threats weigh on consumer and business activity. (paul.vieira@wsj.com; @paulvieira)

1509 ET - Oil futures extend gains to four sessions, lifted by the U.S. threat to impose import tariffs on countries that buy oil from Venezuela. "Obviously the market is seeing it as somewhat supportive," says John Kilduff of Again Capital. But he notes President Trump's habit of talking to countries threatened with tariffs to work out deals. "I think to the extent that any of these moves start to impact and push up the price of oil, we've seen that he's going to back off. He doesn't want to hurt the U.S. economy, which that will do." The market has priced in much of the recent bearish news such as talks to end the Ruissia-Ukraine war, and OPEC+ plans to start bringing back output, Kilduff says. "That $66 level's a rock bottom for now, but also getting above $70 is a difficult task." WTI settles up 1.2% at $69.11 a barrel. Brent rises 1.2% to $73.00 a barrel. (anthony.harrup@wsj.com)

1459 ET - Front-month gold closes lower on the day, settling down 0.2% to $3,013.10 a troy ounce. Gold remains near its all-time high set last week, but succumbed today to end-of-month and end-of- quarter volatility as well as new tariff developments. President Trump said on a Truth Social post that a tariff of 25% will be assessed on any nation purchasing oil and gas from Venezuela. That added to volatility, but Robert Yawger of Mizuho Securities USA said in a note that inflows into gold as a safe haven asset have been exhausted. (kirk.maltais@wsj.com)

1338 ET - The U.S. threat of import tariffs on countries that buy Venezuelan crude is pushing up oil futures, although the impact on supply is likely to be small. "I don't think those barrels will evaporate from global supply, but they are definitely going to cost more than they had in the past, and they're probably going to force some rerouting of global oil," says Mizuho's Robert Yawger. While a lot of buyers have stepped away from Iranian oil, "I'm not sure they want to do the same with Venezuelan flows," he adds. The decision could also hit U.S. refiners already facing tariffs on Canadian and Mexican crude imports, Yawger adds. The U.S. imported around 228,000 barrels a day of Venezuelan crude in 2024, according to the EIA. OPEC estimated Venezuela's production at 918,000 b/d in February, citing secondary sources. WTI and Brent are both up 0.8%. (anthony.harrup@wsj.com)

1156 ET - Investors have already priced in the possibility of spending cuts and downgrades to growth forecasts at next week's U.K. budget, Moneyfarm's Richard Flax says in a note. This could limit the impact on U.K. financial markets, he says. "From an investment perspective, we think that the prospect of weaker growth and potential cuts to spending have been well-flagged." U.K. Treasury chief Rachel Reeves is also likely to avoid announcing any big surprises, Flax says. "We think that changes to taxes, if they come at all, are more likely to arrive in the autumn." (miriam.mukuru@wsj.com)

1147 ET - Crude futures move higher after President Trump says the U.S. will impose secondary tariffs of 25% on imports from countries that buy oil and gas from Venezuela. Early this month the administration gave Chevron until April 3 to wind down its operations in the South American country, although the administration was said last week to be considering an extension to Chevron's license while weighing the possibility of tariffs on buyers of Venezuelan oil. WTI is up 1.2% at $69.08 a barrel, and Brent is up 1.1% at $72.93. (anthony.harrup@wsj.com)

1131 ET - President Trump posted on his Truth Social account that countries that purchase oil and gas from Venezuela would be subject to a 25% 'secondary tariff' on their own goods. This could have a large impact on China, who is the top buyer of oil and gas from Venezuela, according to French research firm CEPII. But the U.S. is the largest customer for Venezuelan goods overall. Equity markets and many commodities have been supported today by a WSJ story that said that the U.S. will limit the expanse of April 2's 'reciprocal tariffs' — leaving market segments out like automobiles and semiconductors. (kirk.maltais@wsj.com)

1127 ET - Lightspeed Commerce's downgraded growth expectations reflects plummeting confidence among consumers, Scotiabank says in a research report. The point-of-sale and commerce platform is now calling for growth of 18% down from prior forecasts of 20%, on the back of heightened inflationary pressures and increased job uncertainty. In addition, the company cites declining small business optimism dampening new business formation. Historically, about a third of Lightspeed's net new customers are from new retail and restaurant openings, analyst Kevin Krishnaratne says. Scotiabank is now adjusting its model for Lightspeed. On profitability, it sees adjusted EBITDA of $13.7 million in 4Q versus its prior $14 million. Looking ahead to FY26, Scotiabank sees adjusted EBITDA of $80.5 million versus a prior $84.5 million, and total revenue growth 15.2% versus a prior was 16.8%. (adriano.marchese@wsj.com)

0938 ET - Traders are mulling reports of a potential narrowing of tariffs, likely omitting a set of industry-specific measures while applying reciprocal levies on a targeted set of nations. No mention of agriculture was made. Most-active corn is down 0.4%, while soybeans are off 0.3% and wheat falls 1.3%. (kirk.maltais@wsj.com)

The euro could be set to rise if Russia and the U.S. announce a positive update on Ukraine ceasefire talks later, ING analyst Francesco Pesole says in a note. Russia and the U.S. are expected to issue a joint statement Tuesday about the progress of negotiations. "Indications that some agreement is building around a full ceasefire would support European sentiment and the euro," Pesole says. Barring that, fading optimism over a quick truce would make generally overvalued European currencies trade softer, he says. For now the euro weakens as the dollar gains. The euro falls 0.2% to a near three-week low of $1.0777, according to FactSet.(renae.dyer@wsj.com)

The euro falls to a near three-week low against a stronger dollar and after Monday's weak eurozone purchasing managers' surveys compared to the equivalent figures for the U.S. Traders exercise caution ahead of the Ifo German business confidence survey at 0900 GMT. Markets "may not be expecting anything too big" from the Ifo survey, ING analyst Francesco Pesole says in a note. However, this leaves scope for a "positive surprise to lift the euro" if sentiment remains optimistic due to Germany's fiscal spending plans. The euro falls to a low of $1.0777, according to FactSet. (renae.dyer@wsj.com)

The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

0756 GMT - Sterling could trade softer by the end of the week if U.K. Treasury chief Rachel Reeves announces spending cuts in Wednesday's budget, Swissquote Bank analyst Ipek Ozkardeskaya says in a note. Spending cuts would be negative for U.K. growth expectations and sterling if the Bank of England doesn't step in to compensate with interest-rate cuts to prop up the economy, she says. "And the BOE is not in a hurry to give support when global and trade uncertainties loom." Sterling will struggle to rise above the key $1.30 level unless the dollar suffers another selloff, she says. Sterling falls 0.1% to $1.2910. The euro trades flat at 0.8359 pounds. (renae.dyer@wsj.com)

0740 GMT - The dollar rises as optimism over more targeted U.S. tariffs and stronger-than-expected U.S. services data soothe concerns about slowing economic growth. The WSJ reported over the weekend that the Trump administration is narrowing its approach to tariffs that are set to take effect on April 2. On Monday, the flash U.S. services purchasing managers' survey for March exceeded expectations with a reading of 54.3, signalling growth in sector activity. The dollar is also supported by investors buying the currency to rebalance their portfolios before month-end and quarter-end. The DXY dollar index rises 0.1% to 104.347, having reached a near three-week high of 104.444 Monday. (renae.dyer@wsj.com)

0730 GMT - The 10-year U.S. Treasury yield will likely trade in a range between 4.25% and 4.35% this week, say ING's Benjamin Schroeder and Padhraic Garvey in a note. "Any attempt to make a material break above this would be constrained by worries about what 2 April brings," the rates strategists say, referring to the announced initial date U.S. President Trump's reciprocal tariffs. They see 4% as a hard floor for the 10-year Treasury yield that can only be broken on materially weak data, they say. "The area of 4.25% is a comfortable distance above that." The 10-year Treasury yield, which rose 8 basis points on Monday after PMI data, is flat at 4.329% in early European trade, according to Tradeweb. (emese.bartha@wsj.com)

0723 GMT - Improving sentiment in the German economy in the wake of the future government's large-scale fiscal expansion plans is expected to be reflected in Tuesday's Ifo print, a key input for bond markets. Business expectations are forecast to rise to 88.0 in March from 85.4 in February, according to The Wall Street Journal's poll of analysts. "It will be interesting to see if the release mirrors the positive surprise in the manufacturing PMI or the downtick in services counterpart," says Danske Bank Research's Emilie Herbo in a note. Shortly after opening, the 10-year Bund yield edges up 0.5 basis point to trade at 2.787%, according to Tradeweb. (emese.bartha@wsj.com)

0713 GMT - The Netherland's 1.5 billion-2 billion euros auction of the 2.50% July 2035 government bond, or DSL, presents a good opportunity for investors to go long, Rabobank's Richard McGuire and Lyn Graham-Taylor say in a note. "We think that, in the wake of Germany's spending announcement, there are logical reasons to use this auction to go long versus EUR swap, France or Belgium," the senior rates strategists say. They note that the anticipated increase in German debt issuance is already priced in, they say. The upcoming auction of the July 2035 DSL comes unusually soon after its 6 billion euro launch on March 4, suggesting that the tap is intended to meet unsatisfied demand "and so should be well received," they add. (emese.bartha@wsj.com)

0658 GMT - Japanese stocks ended higher as concerns about U.S. tariffs eased. The Nikkei Stock Average rose 0.5% to 37780.54. E-commerce and videogame stocks led gains. MonotaRO climbed 7.2% and Nexon gained 9.0%. USD/JPY was at 150.45, compared with 150.69 as of Monday 5 p.m. Eastern time. Investors are focusing on U.S. trade and foreign policies and their implications for Japanese businesses. The 10-year Japanese government bond yield gained 3 basis points to 1.570%. (kosaku.narioka@wsj.com; @kosakunarioka)

0657 GMT - South Korea's benchmark Kospi fell 0.6% to close at 2615.81 after erasing early gains. Losses in shipbuilding and chip stocks outweighed gains in auto shares. Foreign and retail investors were net sellers. Hanwha Ocean slumped 6.3%, leading a retreat of shipbuilding stocks. Memory-chip maker SK Hynix lost 1.7%. Tech giant Samsung Electronics shed 1.2% after a co-CEO in charge of its consumer electronics and smartphone business died from cardiac arrest. Meanwhile, Hyundai Motor rose 3.3% after unveiling a new U.S. investment plan to help avoid tariffs. USD/KRW settled 0.1% higher at 1,469.20 in Seoul onshore trading. South Korea's 10-year government bond yield was up 0.5 bp at 2.821%. (kwanwoo.jun@wsj.com)

0655 GMT - Eurozone government bond yield spreads are in goldilocks mood as EU funding plans become more concrete, says Commerzbank Research's Christoph Rieger in a note. "Near-term supply pressure remains modest (or even negative), volatility is calming down and carry appears attractive," the head of rates and credit research says. Additional support for spread sentiment comes from the EU's more concrete plans to allow member states to "immediately and massively" scale up their defense investments, he says. Meanwhile, German 10-year Bund yields look to establish above 2.75%, he says. (emese.bartha@wsj.com)

0644 GMT - Trade in U.S. Treasurys remains choppy but the 10-year yield is expected to stay within a 20-basis-point range, says Pepperstone's Michael Brown in a note. "Zooming out, though, 10-year Treasurys remain stuck in a 4.15%-4.35% range, despite what's been incredibly choppy trade over the last three weeks or so," the senior research strategist says. The 10-year Treasury yield needs to break either direction from the range to build momentum, he says. Brown, meanwhile, continues to favor risk-reward on offer for longs, he says. The 10-year Treasury yield is stable at 4.329%, stabilizing after Monday's 8 basis point selloff, according to Tradeweb. (emese.bartha@wsj.com)

0633 GMT - U.S. Treasurys stabilize after the previous day's selloff. Monday's selloff was driven by improved sentiment and by participants' bracing for significant short- and medium-term Treasury issuance this week, says Pepperstone's Michael Brown in a note. The Treasury will kick off this week's auctions with a $69 billion offer in two-year notes on Tuesday, followed by $70 billion in five-year notes on Wednesday and $44 billion in seven-year notes on Thursday. The 10-year Treasury yield, which rose 8 basis points on Monday, is largely stable at 4.329%, according to Tradeweb. The two-year Treasury yield is also flat at 4.034%. (emese.bartha@wsj.com)

0535 GMT - South Korea's consumer sentiment declined in March amid the continuing political turmoil in the country, ING's senior economist Min Joo Kang writes in a note. Kang notes that the Constitutional Court is taking longer than expected to deliver a verdict on President Yoon Suk Yeol, who was impeached for imposing martial law in December. While inflation is relatively well anchored, the latest consumer confidence data suggest a gloomy outlook for private spending, she says. The political situation is likely to continue weighing on consumer sentiment for the foreseeable future, Kang says. ING reiterates its base case for the central bank to hold rates steady in April and resume easing in May. The timing of rate cuts may change as the political situation in Korea evolves, ING adds. (jihye.lee@wsj.com)

0517 GMT - Indonesia's rupiah weakens against U.S. dollar in the Asian session amid uncertainty surrounding the country's sovereign wealth fund, analysts say. "The adage that there is no free lunch continues to hold true," MUFG Bank's Michael Wan says in a research report. He notes that Indonesia's stock markets have fallen sharply due to concerns over the fund, as well as uncertainty regarding the transfer of stakes in state-owned enterprises and other key policies. The USD/IDR rises 0.2% to 16,600.63 after earlier touching 16,659.50, its highest intraday level since April 2020, according to FactSet. (ronnie.harui@wsj.com)

Sterling could trade softer by the end of the week if U.K. Treasury chief Rachel Reeves announces spending cuts in Wednesday's budget, Swissquote Bank analyst Ipek Ozkardeskaya says in a note. Spending cuts would be negative for U.K. growth expectations and sterling if the Bank of England doesn't step in to compensate with interest-rate cuts to prop up the economy, she says. "And the BOE is not in a hurry to give support when global and trade uncertainties loom." Sterling will struggle to rise above the key $1.30 level unless the dollar suffers another selloff, she says. Sterling falls 0.1% to $1.2910. The euro trades flat at 0.8359 pounds. (renae.dyer@wsj.com)