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A White House official cited by CNBC said the President may not take all of the non-tariff barriers into account when setting tariff rates. He specifically mentioned VAT taxes, which I take as a good sign. He also mentioned currency devaulation and wage suppression.

We saw reports like that on the weekend, though less detailed so I wouldn’t expect a big market reaction to this. At this point, it might just be better to wait.

CNBC’s Eamon Javers said he expects the 25% additional tariff due to Venezuelan oil to hit China, which would push their rate to 45%.

This article was written by Adam Button at www.forexlive.com.

Goldman Sachs is out with a note saying that high inflation and high survey-based inflation expectations raise the bar for possible rate cuts this year. They add that survey data are muddied by respondents’ political leanings, but still can’t be ignored. They also keep a door open for cuts saying that deteriorating economic indicators could still push the Fed to cut interest rates.

Rising survey-based inflation expectations have been a new thing in 2025 and started to attract the attention from traders and policymakers. They are getting dismissed citing market-based inflation expectations which have been stable just a bit above 2%.

The thing is that market-based inflation expectations were a bit below 2% in January 2022 even when Core CPI in the US was at 6% during the same time. Below you can see the 5y5y forward inflation expectations which is the one Fed Chair Powell have been citing.

Markets tend to remain anchored near the 2% level because of the Fed’s inflation target unless there are black swan events that push them lower. As many successful traders know though, markets are not always right, so we shouldn’t take market-based expectations for granted and always have an open mind on the next potential path.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

UK yields initially rose on the details of the budget but there has been a re-think in the market, or a ‘buy the fact’ reaction to all the angst about the deficit situation.

My suspicion is that there are still many generals ‘fighting the last war’ in regards to the Liz Truss fiasco, and fearful of a repeat. Today, after rising to 5.41%, 30-year yields have fallen to 5.29% and dragged the pound down.

Now that’s not happening in a vacuum as the euro also hits session lows and I take it as a good sign for the pound in the longer term but right now the market is sorting through the spending implications.

This article was written by Adam Button at www.forexlive.com.

For all the tariff talk this year, there is a compelling argument that all the weakness in US stock markets is really just Mag7 euphoria fading, in part because of confusion about how AI will play out.

I’m a big believer but there will be an ebb and flow and this might be the flow phase or it might be a bubble popping (at least in a few names).

It’s worth remembering that 25 years ago this week, Goldman Sachs released a note titled: B2C Internet: The End of the Beginning. It urged investors to rotate out of business-to-consumer (B2C) internet stocks and into more sustainable plays. The same month, Robert Shiller released is book “Irrational Exuberance” that argued tech stocks were overvalued.

Before that, there were other trickles of skepticism.

What’s the parallel to today?

In the last 24 hours there have been incredible model releases in Gemini 2.5, a new DeepSeek foundational model that beats everything and OpenAI releasing insane image generation capabilities. Despite that, the market is unimpressed. Meanwhile, Goldman Sachs’s Asian team yesterday revised down its AI training server outlook.

We revise down our Rack-level AI Server volume forecast due to the combined reasons of product transitioning and uncertainties of demand and supply. We now expect 19k/ 57k of rack-level AI servers (in 144-GPU equivalent) for 2025/ 26E, down from previously 31k/ 66k in 2025/ 26E.

Now, this isn’t exactly alarming but it’s slower, it’s a change in the second derivative at the very least. Goldman still sees US cloud services providers raising capex by 41% y/y in 2025 but that slows to 15% in 2026. For China, they see it leveling off at +4% in 2026 and stabilizing there.

The 2000 Goldman Sachs note symbolized the shift from “growth at all costs” to “show me the money” in tech investing. Will we be seeing the same thing in AI? Is that time now?

Nasdaq futures are flat today but Nvidia shares are down 1.8% premarket.

h/t @SquirrelMacro

This article was written by Adam Button at www.forexlive.com.

• Growth recovers to average around 1.75% over the rest of the decade
• OBR: underlying fiscal outlook has deteriorated since October

• if global trade disputes escalate to include 20 pct pt rises in tariffs between the USA and the rest of the world, this could reduce UK GDP by a peak of 1% and reduce current surpluses in the target year to almost zero

• UK finance minister Reeves says to raise extra 1 bln stg by tackling tax evasion
• UK finance minister Reeves says this statement contains no further tax increases
• OBR: Borrowing is projected to be 3.5 billion pounds higher and debt 0.6% of gdp higher at the end of the decade than in our October forecast
• UK’s Reeves: this statement does not contain any further tax increases
• UK’s Reeves: obr forecasts show 2028/29 current budget deficit/surplus of 7.1 bln stg (Oct forecast: 9.3 bln stg surplus)
• OBR forecasts 2029/30 net financial debt 82.7% of GDP (Oct forecast 83.4%)
• OBR forecasts show 2025/26 current budget deficit of 36.1 bln stg (Oct forecast: 26.2 bln stg)
• CPI seen at 3.2% in 2025 vs 2.6% in October
• CPI seen at 2% from 2027 onwards

Gilts have bounced around on these headlines, rising first but a Reuters calculation shows an additional 47.5B in additional borrowing between now and 2029/30 compared to October forecasts.

This article was written by Adam Button at www.forexlive.com.

• Prior was +3.2%
• Nondefense capital goods orders ex-air -0.3% vs +0.2% expected
• Prior nondefense capital goods orders ex-air +0.8% (revised to +0.9%)
• Ex transport +0.7% vs +0.2% expected
• Ex defense +0.8% vs +3.5% prior

This is a solid number but the core orders are weaker than the headline suggests. Still, that’s coming off a prior number that was strong and revised slightly higher.

This article was written by Adam Button at www.forexlive.com.

Industrial production has been a source of strength in economic data so far this year and that’s been one of the main data points used as a push-back against slowing consumer and business surveys.

Today we get a forward-looking industrial indicator with the February durable goods orders report. In truth, this indicator hasn’t been a great one in the post-pandemic period but all numbers are being watched closely at the moment. In this report, the one to key in on is capital goods orders non-defense ex-aircraft. The consensus on it is +0.8% following a +0.2% reading previously.

This article was written by Adam Button at www.forexlive.com.

Headlines:

• UK February CPI +2.8% vs +3.0% y/y expected
• Sterling eases after cooler UK inflation but outlook remains challenging
• Traders increase bets for BoE rate cut at the May meeting after the UK CPI release
• ECB’s Villeroy: Trump tariffs would have limited impact on euro area inflation
• Fed’s Goolsbee: We’re no longer on the golden path as seen in the last two years
• ECB’s Panetta says must remain pragmatic and data-driven in setting policy rate
• BOJ’s Koeda: We are seeing signs of progress on rising prices alongside wage hikes
• Spain Q4 final GDP +0.8% vs +0.8% q/q prelim
• Switzerland UBS March investor sentiment -10.7 vs 3.4 prior
• US MBA mortgage applications w.e. 21 March -2.0% vs -6.2% prior
• China urged to focus on bolstering domestic demand, especially consumption

Markets:

• NZD leads, GBP lags on the day
• European equities lower; S&P 500 futures flat
• US 10-year yields up 3.6 bps to 4.344%
• Gold up 0.3% to $3,028.73
• WTI crude up 0.9% to $69.61
• Bitcoin up 0.2% to $88,053

It was a slower session as markets continue to be caught in the countdown to Trump tariffs next week.

The UK CPI report was the main event on the economic calendar and it turned out to be slightly softer than estimated. The pound fell in the aftermath despite details still arguably potentially offering a headache for the BOE.

Services inflation remains stick at 5.0% and at 3.5%, core annual inflation is still sitting well above the desired 2% level for the time being. While headline annual inflation is seen at 2.8% now, there are concerns that it could pick up in the months ahead as the drag from energy prices dissipates and firms potentially having raise prices when NICS and NLW increases come into effect next month.

Some analysts are even forecasting UK inflation to move towards 4% by the April or May reports. And that is consistent with the BOE forecast of inflation returning to a peak of 3.75% in Q3 this year.

Nonetheless, traders are looking past all of this for now with GBP/USD falling from 1.2940 to 1.2890 and is keeping thereabouts now.

The dollar is mixed across the board as it holds slight gains against the yen and franc while keeping lower against the commodity currencies. EUR/USD remains flat just under the 1.0800 mark.

Looking to broader markets, the risk mood is more tentative even with a bit of a stutter in Europe. Major indices in the region are lower after a more tepid open while US futures are still looking relatively muted ahead of the Wall Street open later.

Coming up, we do have the UK spring budget statement to go through before navigating more Trump tariff headlines surely during the session ahead.

This article was written by Justin Low at www.forexlive.com.

The key date for the markets is next Wednesday when the US will finally unveil the tariffs plan. Trump has been calling it “Liberation Day” and that will likely be the same for the markets as uncertainty has been historically high.

The expectations for tariffs rates is around 9% for universal and 50% on China. Q1 has been a tough quarter for the markets as the tariffs noise increased the volatility and sent markets into a spin. Uncertainty is not a good thing for the economy and we’ve been seeing that cited a lot across many business surveys.

Taking out that uncertainty will be a very good thing for the markets but the potential for nasty surprises is still there. Scanning through different charts, it feels like the markets are reaching key levels right ahead of the key date and that’s going to be the catalyst for the next big moves.

Therefore, the best approach from a risk management perspective would be to just wait for the key date and start taking positions after the tariffs plan announcement as we will likely get some long lasting trends from there.

On the S&P 500 daily chart, we can see that we have now almost erased 50% of the selloff and the price is close to a key resistance zone around the 5855 level that previously acted as support. If we were to get good news on the tariffs front, the market will likely break to the upside and a new all-time high would be eyed. Conversely, harsher than expected tariffs could weigh on the market considering also the lack of Fed support and sinking consumer sentiment.

The 10 year Treasury price chart is also looking like it’s setting up for something big. We’ve been just consolidating for the entire month waiting for the key catalyst. What follows after such consolidations is generally strong and sustained moves. The bond market response to negative news would be the opposite (bonds up) of the stock market as recession fears would start to increase again especially on a potential stock market selloff and the Fed being constrained by high inflation expectations.

Bitcoin is also in an interesting spot as the price is pulling back into a key resistance zone around the 90K level that acted as support before being broken. We can also see that there’s a major trendline adding confluence to the resistance, which makes it more compelling. Bitcoin is generally correlated to the stock market being a risk asset and being influenced by similar macro drivers. Therefore, we can expect it to move in line with the stock market.

Finally, the US Dollar index hasn’t been doing much lately. We just got the strong downward push triggered by the German defence spending news which saw EU-US yield differentials jumping in favour of the Euro. As a reminder, the US Dollar Index (DXY) is basically EUR/USD upside down as the Euro makes up for 60% of the index.

This is harder to square but the greenback will most likely be influenced by the risk sentiment following the catalyst as positive news should keep rate cuts expectations around two for this year, while negative news could push those to four or more.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior -6.2%
• Market index 247.5 vs 252.5 prior
• Purchase index 155.8 vs 154.7 prior
• Refinance index 752.4 vs 794.4 prior
• 30-year mortgage rate 6.71% vs 6.72% prior

Mortgage applications declined in the past week but it owes mostly to a continued pullback in refinancing activity. Purchase activity was actually stronger but only marginally. Meanwhile, the average rate of the most popular US home loan is seen somewhat steady in the last week at 6.71%.

This article was written by Justin Low at www.forexlive.com.

Fundamental
Overview

The USD got a bit of a
boost on Monday following the better than expected US PMIs although the gains were not widespread. We’ve
also seen some bids in the greenback yesterday following the weak US Consumer Confidence where inflation expectations jumped
to yet another high.

Overall, the market is
still pricing between two to three rate cuts this year and the sentiment
remains tentative as we approach the Trump’s “Liberation Day” on April 2nd.

On the CHF side, as a
reminder, the SNB cut interest rates by 25 bps as expected bringing the
policy rate to 0.25%. There was no signal of the end of the easing cycle, but
the central bank is now in a good position to just pause for a long time with
no need to go back to ZIRP or even NIRP. The market doesn’t see any more rate
cuts.

The focus is now on next Wednesday when the US will unveil the tariffs plan and we can then move forward from there without the high uncertainty that is prevailing at the moment.

USDCHF
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that USDCHF remains stuck in a 100-pips range between the 0.8760 support and the 0.8860 resistance. The sellers will
likely step in around the resistance and the trendline
to position for a drop into new lows, while the buyers will want to see the
price breaking higher to gain more conviction and push into the 0.90 handle
next.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have an even smaller range on this timeframe with support around the 0.88 handle. Market participants will likely continue to play this range until we get a breakout on either side but waiting for April 2nd would be a better idea given the uncertainty and the potential for surprises. The red
lines define the average daily range for today.

Upcoming Catalysts

Tomorrow we get the latest US Jobless Claims
figures, while on Friday we conclude the week with the Canadian GDP and the US
PCE report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Rate cuts by year-end

• Fed: 62 bps (85% probability of no change at the upcoming meeting)

Following the weak US consumer confidence report, traders increased the easing bets from 59 bps to 62 bps.

• ECB: 51 bps (78% probability of rate cut at the upcoming meeting)
• BoE: 45 bps (54% probability of rate cut at the upcoming meeting)

Following the lower than expected UK CPI figures, traders went from expecting no change to pricing in higher chances of a 25 bps cut at the May’s BoE meeting.

• BoC: 44 bps (72% probability of no change at the upcoming meeting)

Following Trump’s positive comments on Canada and Mexico, traders revised expectations a bit lower from 46 bps to 44 bps.

• RBA: 63 bps (88% probability of no change at the upcoming meeting)

Following the unexpected tax cuts announcement yesterday, traders see less easing this year from 65 bps to 63 bps.

• RBNZ: 60 bps (65% probability of rate cut at the upcoming meeting)
• SNB: 7 bps (80% probability of no change at the upcoming meeting)

Rate hikes by year-end

• BoJ: 36 bps (72% probability of no change at the upcoming meeting)

This article was written by Giuseppe Dellamotta at www.forexlive.com.