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Japan February Industrial Output (preliminary) +2.5% m/m

• expected +2.3%, prior -1.1%

For the y/y, +0.3%

• prior +2.2%

One month ahead forecast is +0.6%

• prior +0.5%

2 month ahead forecast is +0.1%

• prior -2.0%

USD/JPY update … sitting near session low:

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan February retail sales +1.4% y/y

• expected +2.0%, prior +4.4%

For the m/m, comes in at +0.5%

• expected -0.2%, prior +0.5%

more to come

This article was written by Eamonn Sheridan at www.forexlive.com.

Trump comments crossing:

• says not putting on oil sanctions right now
• making progress on Russia and Ukraine
• will soon make decision on secondary tariffs on Iran
• will put secondary tariffs on Iran if Tehran does not make a deal on a nuclear program with the US
• will be a deal on TikTok

Trump also with praise for UK PM Starmer:

Turnberry is Trump’s gold course in Scotland.

This article was written by Eamonn Sheridan at www.forexlive.com.

Wall Street Journal (gated) with the report on what appears to be much more aggressive tariffs coming on April 2 than Trump was letting on last week. WSJ citing unnamed sources:

Trump spent most of last week playing down expectations for his so-called reciprocal tariff plan on April 2, saying repeatedly that he would be “nicer” than his previous pledges to equalize U.S. tariffs with those charged by other countries, and would consider exempting some countries from tariffs altogether

But in recent days Trump has pushed his team to be more aggressive, encouraging them to devise plans that would apply higher rates of tariffs on a broader set of countries.

advisers have considered imposing global tariffs of up to 20% that would hit virtually all U.S. trading partners

reciprocal plan is also still on the table

administration official said Trump is inclined to tariff every country that the U.S. runs a trade deficit

likely the final action will be broader than earlier plans to prioritize levying tariffs on the U.S.’s biggest trading partners (the “dirty 15”)

considering unveiling a slate of new industry-specific tariffs that could hit critical minerals and products that contain them

This article was written by Eamonn Sheridan at www.forexlive.com.

UK business confidence held steady in March, matching February’s six-month high, according to Lloyds Bank.

• Lloyds Business Barometer March 2025 came in at 49 vs. expected 50 and February’s 49

Retailers showed strong sentiment, aligning with official data showing a surprise jump in February retail sales.

• Confidence in own trading prospects hit its highest level since 2017, despite broader economic uncertainties.

• Manufacturing sentiment fell sharply, reflecting concerns echoed in the recent S&P Global PMI data.

• Upcoming U.S. tariffs, domestic tax hikes, and energy bill increases may challenge the UK’s early 2025 recovery.

• Hiring, pay, and price expectations eased, suggesting a cautious outlook despite signs of underlying growth.

***

GBP slipped early but it has;t followed through lower to much of an extent:

This article was written by Eamonn Sheridan at www.forexlive.com.

It is another potentially massive week for global markets in general, and US markets in particular, with key jobs numbers due out from the US across the week and a pivotal day for tariffs on 2 April.
There is a heavy focus on US data as we move through the week, with jobs data prominent, culminating in the key Non-Farms numbers on Friday.

There are some other key updates across other markets as well, but investors are once again expecting a heavy influence on markets from the US, both from a fundamental data perspective as well as from the expected trade updates.

Here is our usual day-by-day breakdown of the major risk events this week:

The week kicks off with an early focus on Chinese markets in the Asian session, with Manufacturing and Non-Manufacturing PMI numbers due out. The European session will see the focus on Germany, with all individual states reporting the CPI updates during the day, whilst the New York session has little on the cards in terms of data releases.

There is a big focus on Australian markets on Tuesday in the Asian session, with Retail Sales numbers out early in the day before the key Reserve Bank of Australia Rate Decision and Press Conference in the afternoon. There is more inflation data due out in Europe, with the EU CPI numbers due for release, and then we have the first major US data of the week once New York opens. ISM Manufacturing PMI and JOLTS Job Openings data are due out early in the session, with the JOLTS data likely to have the slightly bigger impact.

The quietest day of the week in terms of scheduled market events, with just the US ADP Non-Farms Employment data the only major release of the day. However, it could be one of the busiest days for traders, with the market expecting to get more clarity on tariffs from President Trump.

There is little of note on the calendar again in the Asian session, but traders are expecting a busy day on the back of tariff updates from the States and counter-tariff plans from affected countries. There will be a big focus on Swiss markets shortly after the London open, with the latest CPI data due out, and there is more key US data due out in the New York session, with the Weekly Unemployment Claims numbers out alongside the ISM Services PMI and Final Services PMI data.

It’s Non-Farms Payroll Day on Friday, and the schedule looks likely to set the market up for a classic calm-before-the-storm-type day. There is nothing of note again in the Asian session scheduled, and just the UK Construction PMI numbers in the European day, which should see relatively rangebound conditions (barring, of course, any big geopolitical news) into the big US employment numbers. The Unemployment Rate and Average Hourly Earnings data are out alongside the headline Non-Farms number, but as always, expect the headline number to dominate the initial market reaction. Canadian employment data is again out at the same time as the US numbers, but expect the moves to come on the back of the US updates.

The post The Week Ahead – Week Commencing 31 March 2025 first appeared on IC Markets | Official Blog.

Trump is planning to travel to Saudi Arabia in mid-May.

This’ll be his first foreign trip since returning to the White House.

Info via Axios citing two US officials and a source with knowledge.

This article was written by Eamonn Sheridan at www.forexlive.com.

Goldman Sachs has revised its U.S. tariff expectations sharply higher for 2025, warning that escalating trade tensions could weigh significantly on growth, inflation, and employment. In a note to clients, the bank said it now expects the average U.S. tariff rate to rise by 15 percentage points next year—up from a previous baseline of 10 percentage points and in line with its earlier risk scenario.

The upward revision is largely driven by the expectation that Trump will announce a sweeping “reciprocal tariff” regime averaging 15% across all U.S. trading partners on April 2. While exemptions for specific products and countries are likely, Goldman estimates the effective impact on average tariffs would still amount to a 9-point increase.

In response, the firm has raised its year-end 2025 core PCE inflation forecast by 0.5 percentage points to 3.5%, citing the inflationary impact of higher import costs. GDP growth is now projected to slow to just 1.0% on a Q4/Q4 basis, down 0.5 percentage points from prior estimates, while the unemployment rate is expected to climb to 4.5% by year-end. Reflecting the deteriorating outlook, Goldman has also increased its 12-month recession probability to 35%, citing weaker consumer and business sentiment and signs that policymakers may be more willing to accept near-term economic pain in pursuit of broader policy goals.

With real income growth already decelerating—projected to average just 1.4% in 2025—Goldman cautions that the economy may be entering a more fragile phase, where sentiment and policy risks exert greater drag than in recent years.

GS still see Fed rate cuts this year, citing a scare on growth

This article was written by Eamonn Sheridan at www.forexlive.com.

Violence spreading further in the US with a firebomb attack on a Republican Party HQ office in New Mexico:

Amy Barela, the chairwoman of the Republican Party of New Mexico:

• suspect hurled a Molotov cocktail at the building, igniting the fire
• no one harmed in incident

More here and here.

Pic via CBS

This article was written by Eamonn Sheridan at www.forexlive.com.

China’s finance ministry will inject 500 billion yuan (around $69 billion) into four of the country’s largest state-owned banks as part of a broader effort to strengthen the financial sector and support economic growth.

The Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank plan to raise a combined 520 billion yuan ($72 billion) through private share placements, with the finance ministry as the top investor in each offering.

The fundraising aims to replenish the banks’ core tier-1 capital, with new shares issued at a premium of up to 21.5% above recent trading levels. This move follows Beijing’s earlier pledge to use special sovereign bonds to boost lenders’ capital buffers and enable them to better support sectors such as property, technology, and consumption. While China’s largest lenders already exceed regulatory capital requirements, they face growing challenges including shrinking margins, slowing profits, and rising bad debt. Strengthening their capital positions is seen as key to maintaining financial stability and achieving the government’s 5% growth target for 2025.

This article was written by Eamonn Sheridan at www.forexlive.com.

Trump said he’s “very angry’ with Russian President Vladimir Putin and would consider imposing additional tariffs on Russian oil if a ceasefire with Ukraine isn’t achieved, according to NBC News.

NBC said they spoke with Trump in a phone interview.

• Trump is “very angry” about Putin’s suggestion to replace Ukraine’s leadership and sideline President Zelenskiy.

• He believes that new leadership in Ukraine would delay any potential peace deal.

• Trump said he’s “pissed off” and would impose secondary sanctions on all Russian oil if Russia is at fault for a failed peace deal.

• He plans to speak with Putin this week.

India and China have both been major major importers of Russian oil and would would be particularly impacted by such sanctions.

Trump seems to view tariffs as the solution to everything?

This article was written by Eamonn Sheridan at www.forexlive.com.

The screenshot below shows what’s up for the session ahead. I included the notification for much of Europe and the UK switching to daylight saving on Sunday, ICYMI Justin’s heads up:

• Heads up: The clocks will go forward in Europe this weekend

If you trade European and/or UK markets you may need to adjust your local start/end.

As for today the focal point is the info from China, official PMIs for March. Both the manufacturing and non-manufacturing are expected to show a little improvement from February.

Looking at recent history:

Manufacturing PMI:

• July 2024: The manufacturing PMI stood at 49.4, a slight decrease of 0.1 from June, indicating a marginal contraction in manufacturing activity.

• August 2024: The index declined further to 49.1, suggesting a continued contraction in the manufacturing sector.

• September 2024: The PMI improved to 49.8, approaching the expansion threshold but still indicating a slight contraction.

• October 2024: The index reached 50.1, crossing into expansion territory, reflecting a modest recovery in manufacturing activity.

• November 2024: The PMI increased to 50.3, marking the highest reading since April and indicating a continued expansion in the manufacturing sector.

• December 2024: The index slightly decreased to 50.1%, maintaining its position above the threshold, thus indicating ongoing, albeit modest, expansion.

• January 2025: China’s manufacturing PMI fell to 49.1 from 50.1 in December 2024, indicating a contraction in manufacturing activity. This decline was partly attributed to the Lunar New Year holiday, during which many workers returned to their hometowns, leading to reduced production capacity. Additionally, new orders and production sub-indices also experienced declines, reflecting weakened demand and output.

• February 2025: China’s manufacturing PMI rose to 50.2, up from 49.1 in January, indicating a return to expansion in the manufacturing sector. These result, combine with the non-manufacturing PMI for the month (see below) imply a tentative stabilization in China’s economy, though challenges such as trade tensions and internal structural adjustments persist.​

Non-Manufacturing PMI:

• July 2024: The non-manufacturing PMI was at 50.2, a decrease of 0.3 from June, indicating marginal expansion in the non-manufacturing sector.

• August 2024: The index declined to 49.6, signaling a contraction in non-manufacturing activities.

• September 2024: The PMI rebounded to 50.9, returning to expansion territory.

• October 2024: The index decreased to 50.6, indicating a slower pace of expansion.

• November 2024: The PMI further declined to 50.0, suggesting stagnation in non-manufacturing activities.

• December 2024: The index rose to 52.2, reflecting a notable recovery and expansion in the non-manufacturing sector.

• January 2025: The non-manufacturing PMI, which encompasses the services and construction sectors, decreased to 50.2 in January from 52.2 in the previous month, suggesting a slowdown in growth. The services sector, in particular, was affected by the holiday period, leading to reduced business activity and employment challenges. Despite the slowdown, the index remained above the 50-point threshold, indicating continued, albeit slower, expansion.
• February 2025: The non-manufacturing PMI edged up to 50.4 from 50.2, suggesting modest growth in services and construction activities.

​

The unofficial, Caixin, PMIs from March will follow later in the week. More on the difference between these two sets of PMI’s below.

The PMIs (Purchasing Managers’ Indexes) from China’s National Bureau of Statistics (NBS) and Caixin/S&P Global differ primarily in survey scope, methodology, and focus. Here’s a breakdown of the key differences:

1. Provider and Affiliation

• NBS PMI:

  • Compiled by the National Bureau of Statistics of China, a government agency.
  • Seen as the official PMI, closely aligned with government policies and priorities.

• Caixin/S&P Global PMI:

  • Compiled by Caixin Media in collaboration with S&P Global.
  • A private-sector index, often considered more market-driven.

2. Survey Scope

• NBS PMI:

  • Focuses on large and state-owned enterprises.
  • Covers a broader range of industries, including manufacturing and non-manufacturing sectors (e.g., construction and services).
  • Reflects conditions in sectors heavily influenced by government policies and infrastructure spending.

• Caixin PMI:

  • Focuses on small to medium-sized enterprises (SMEs), particularly in the private sector.
  • Captures the performance of companies that are more exposed to market-driven forces and less influenced by state interventions.

3. Sample Size and Composition

• NBS PMI:

  • Larger sample size, with about 3,000 enterprises surveyed for the manufacturing PMI.
  • Emphasizes state-owned enterprises and larger companies, which tend to dominate traditional industries.

• Caixin PMI:

  • Smaller sample size, surveying around 500 enterprises, with a stronger focus on export-oriented and technology-driven firms.
  • Provides insights into the private sector and its responsiveness to global economic conditions.

4. Release Dates

• NBS PMI:

  • Released monthly, typically on the last day of the month.
  • Provides separate PMIs for manufacturing and non-manufacturing sectors.

• Caixin PMI:

  • Released a few days later, usually on the first business day of the following month.
  • Includes only the manufacturing PMI and services PMI, with no equivalent for non-manufacturing activities like construction.

5. Interpretation and Use

• NBS PMI:

  • Reflects the overall economic landscape, especially trends in industries influenced by government policy.
  • Analysts use it to gauge the impact of fiscal and monetary policies on the broader economy.

• Caixin PMI:

  • Viewed as a better indicator of the health of the private sector and market-driven segments of the economy.
  • Considered more sensitive to external shocks (e.g., global trade conditions).

6. Key Insights and Differences in Results

• The NBS PMI often reflects policy-driven stability, showing less volatility because it covers sectors cushioned by government support.
• The Caixin PMI can be more volatile, as SMEs are more sensitive to real-time changes in market demand, supply chain disruptions, and global economic shifts.

Why Both Matter:

• NBS PMI offers a macroeconomic view of China’s state-influenced economy.
• Caixin PMI provides a microeconomic perspective of the more market-driven and globally competitive sectors.

By analyzing both, investors and policymakers can obtain a more comprehensive picture of China’s economic health and its underlying dynamics.

This article was written by Eamonn Sheridan at www.forexlive.com.