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Trump has been quiet on the tariff front today and with that it’s no surprise that equities have a bid. The S&P 500 has extended its gain to 2% and the gap lower at yesterday’s open is now almost closed.

It can all change with a tweet so beware.

Some people were pointing out that late yesterday there were bids in Vietnam-related equities like Nike (which has huge factories there). The speculation is that that there could be progress towards a deal there, though there are no real headlines along those lines.

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

• Prior was -14.5

This is the lowest since Oct 2023.

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

• Lowest since November
• Prior was -4
• Services index -7 vs -4 prior
• Manufacturing shipments -17 vs -7 prior

At some point all this deterioration in sentiment has to lead to worsening economic performance.

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

Consumer goods giant Kimberly-Clark reported Q1 earnings today that reveal several macro themes worth watching and the dynamic of a weakening USD and how that will hurt equities.

The maker of Kleenex and Huggies posted a 6% drop in net sales to $4.8 billion, with currency translation accounting for a significant 2.4% of that decline. More concerning for macro watchers is the company’s revised outlook, citing “greater costs across our global supply chain” than anticipated at the beginning of 2025.

They’ve significantly reduced their outlook from “high single-digit growth” to “flat to positive” for operating profit on a constant-currency basis, indicating a notable slowdown in business expectations.

Share of KMB are down 3.5%.

If the US dollar continues to fall, we could see a reversal in some of this commentary as a weak dollar boosts foreign profits in USD terms.

The good news is company reported a 1.5% decrease in price, with volume and mix flat year-over-year. That’s some good news on inflation but suggests challenges in maintaining pricing power in a slowing consumer environment.

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

• Sees 2025 at 2.8% vs 3.3% in January
• Sees 2026 at 3.0% vs 3.3% prior
• 2025 US GDP seen at 1.8% vs 2.7% prior
• 2026 US GDP seen at 1.7% vs 2.1% prior
• 2025 China GDP seen at 4.0% vs 4.6% prior
• 2026 China GDP seen at 4.0% vs 4.5% prior
• 2025 Germany GDP seen at 0.0% vs +0.3% prior

The IMF cited US tariffs for the cut. The lone economy where negative GDP is forecast is Mexico but it has been one of the stronger equity markets this year.

“Intensifying downside risks dominate the outlook, amid escalating trade
tensions and financial market adjustments. Divergent and swiftly
changing policy positions or deteriorating sentiment could lead to even
tighter global financial conditions. Ratcheting up a trade war and
heightened trade policy uncertainty may further hinder both short-term
and long-term growth prospects. Scaling back international cooperation
could jeopardize progress toward a more resilient global economy,” the IMF said.

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

The main tariff news of the Asian session was a press release from the US Trade Representative highlighting progress on a trade deal with India as JD Vance visited.

“I am pleased to confirm that USTR and India’s Ministry of Commerce and
Industry have finalized the Terms of Reference to lay down a roadmap for
the negotiations on reciprocal trade,” said Ambassador Greer.

Is this what we’re doing?

After touting 90 days in 90 days we get a press release to announce that after extensive negotiations, officials are proud to announce they have successfully agreed… to begin discussing how they might eventually start negotiating a trade deal.

Hardly confidence inspiring.

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

• General activity (region): -42.7 vs. -32.5 prior
• General activity (firm level): -26.7 vs. -17.5 prior
• New orders: -6.9 vs. -19.5 prior
• Sales/revenues: -7.8 vs. -4.7 prior
• Full-time employment: -7.2 vs. -7.5 prior
• Part-time employment: -7.9 vs. 3.5 prior
• Prices paid: 46.5 vs. 36.0 prior
• Prices received: -0.1 vs. 8.4 prior

Future indicators (six months):

• General activity : -31.8 vs. -24.0 prior (lowest since April 2020)
• General activity (firm level): -23.0 vs. -19.8 prior

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

• Prior was +0.4% (revised to +0.6%)
• PPI yy 4.7% vs 4.9% prior
• Raw materials price index -1.0% m/m vs +0.3% prior
• Raw materials price index +3.9% y/y vs +6.6% prior

The slowdown in price pressures is notable via raw materials and that will continue in April via the plunge in oil and natural gas prices.

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

The US dollar has bounced back today and that’s led to a give-back of some of yesterday’s “sell America” trade.

I don’t see any game-changers on the economic calendar today as the main highlight is another economic sentiment survey; this time the Richmond Fed manufacturing survey. These have clearly deteriorated as we saw with Empire last week but the market wants to see some hard data showing what’s happening to the economy, particularly employment.

The other front to watch is Fedspeak with Jefferson (9 am ET), Harker (9:30 am ET), Kashkari (1:40 pm ET), Barkin (2:30 pm ET) and Kugler (6 pm ET). So far there has been a strong consensus that the Fed needs to wait on tariff policy and get inflation lower before cutting rates.

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

• Interest rates are now within the neutral range.
• June to depend on data, forecasts and risk outlook.
• Inflation to reach 2% in the next few months.
• Time needed to assess risks associated with tariffs.
• US Trade policy is eroding confidence.
• We must remain vigilant and agile.

Markets are pricing a 72% chance of a 25 bps cut in June and a total of 66 bps of easing by year-end.

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

• ECB’s Rehn: Great uncertainty is restraining economic activity
• US VP Vance: India and America have finalised terms of reference for a trade deal
• Little progress on trade negotiations keeps the market betting on more aggressive easing
• BoE’s Greene: Pricing partly reflects global factors
• ECB survey: Inflation seen at 2.2% in 2025 vs 2.1% seen three months ago
• SNB total sight deposits w.e. 18 April CHF 448.3 bn vs CHF 446.9 bn prior
• Japan Keidanren Chief Tokura: Rapid FX fluctuation not desirable for economy
• What are the main events for today?
• Tedious US-Japan trade talks highlight difficulty for any deals
• USD/JPY dips below 140 for the first time since September last year
• FX option expiries for 22 April 10am New York cut
• Long-end Treasuries continue to send warning signals
• Gold stays relentless in its push higher, eyes $3,500 next

It’s been a relatively quiet session in the markets compared to yesterday’s aggressive moves. There hasn’t been any notable data or news release and we continue to wait for some concrete development on the trade negotiations front.

The main theme remains the “sell America” trade with US assets like stocks, bonds and the USD remaining under pressure while safe havens like gold continue to make new highs.

The problem is that positioning is getting overstretched pretty much everywhere and that’s when you see big reversals once a catalyst hits the market.

The catalyst will likely be the first trade deal as the focus remains on tariff negotiations.

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

• Great uncertainty is restraining economic activity.
• In the short-term, the impact of tariffs on Euro Area inflation is to the downside due to lower demand.
• Most economist assumed the euro would weaken as a result of tariffs. That has not happened.
• If China redirects its exports toward Europe due to excessively high
  tariffs by the US, if energy prices fall and if the euro strengthens,
  then tariffs won’t cause inflation to accelerate in the euro area.
• The trade war started by President Trump has created exceptional uncertainty, which reduces euro-area economic growth.

The experience from the trade war 1.0 in 2018 taught that tariffs indeed cause temporary inflation but have also a negative impact on growth which eventually weighs on inflation. Today’s context is very different of course and we will see how this evolves.

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