With Trump tariffs set to go into effect, expect analysts to continue to slash growth forecasts not just in Europe but all over the globe. Considering the circumstances now, I reckon European policymakers and lawmakers can be thankful that the economy held up much better than initially thought last year.

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

• Eurostoxx +1.0%
• Germany DAX +0.8%
• France CAC 40 +1.3%
• UK FTSE +1.3%
• Spain IBEX +0.1%
• Italy FTSE MIB +1.2%

The drop yesterday wasn’t as brutal as it was at the open at least. But amid a slight pick up in the risk mood for now, European indices are holding higher in the early stages. S&P 500 futures are seen up 1.5% currently. The over 4% decline in the DAX nearly erased its year-to-date gains while the CAC 40 did fall at one point to test its October 2023 lows.

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

Trump escalated the trade war further yesterday threatening additional 50% tariffs on China effective tomorrow if they don’t back off from the recent retaliatory tariffs. This move increased the risk of the yuan devaluation which could roil the markets if enacted.

China devalued the yuan back in 2015 to respond to an economic slowdown and boost exports. That move suprised the markets and sent them into risk-off as people feared that China’s economy was worse than expected. The US stock market reacted by falling more than 10% back then.

During the first trade war in 2018, the yuan kept on depreciating against the us dollar but in that case it was solely due to market forces (at least that’s what the Chinese said) and the PBoC even stepped in at times to prevent the yuan from falling too fast to avoid panic and capital flight.

Now we are in trade war 2.0 and Trump is pursuing a more aggressive policy against China. China doesn’t look like it’s backing down after it responded tit-for-tat with 34% retaliatory tariffs last Friday. Trump might have decided to take a gamble and threatened an additional 50% tariffs effective tomorrow if China doesn’t back off from the recent retaliation.

After imposing retaliatory tariffs last Friday, China vowed to use “more resolute” measures to protect its interests. That could be a hint for yuan devaluation. The counter-argument is that Chinese officials have been keeping the currency stable because they wanted to internationalise the yuan and avoid capital flight. But conditions have changed. Will their strategy change too?

If China pursues that strategy, then we could see the trade war escalate a lot further and Trump won’t be happy at all as he’s dubbed China a currency manipulator for a long time. The markets will likely expect something worse in response and the fear and uncertainty will likely weigh on the stock market further.

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

• Prior -€6.54 billion; revised to -€6.49 billion

The French trade deficit expanded slightly in February as exports were more or less flat while imports were seen up 2.4% on the month on a seasonally adjusted basis.

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

Global Markets:

•  Asian Stock Markets : Nikkei up 5.64%, Shanghai Composite up 0.72%, Hang Seng up 0.53% ASX up 2.04%
• Commodities : Gold at $3017.35 (1.4%), Silver at $30.07 (1.48%), Brent Oil at $64.65 (1.95%), WTI Oil at $61.26 (1.94%)
• Rates : US 10-year yield at 4.179, UK 10-year yield at 4.6205, Germany 10-year yield at 2.6215

News & Data:

• (USD) Consumer Credit m/m -0.8B  to 14.9B  expected

Markets Update:

Asia-Pacific markets rebounded on Tuesday after a sharp sell-off in the previous session, which was driven by U.S. President Donald Trump’s tariff threats. Trump warned of a potential 50% increase in tariffs on Chinese goods if Beijing did not reduce its own duties on American imports, sparking volatility across global markets.

In response, several major indices in the region posted solid gains. Japan’s Nikkei 225 surged 5.31%, while the broader Topix rose 5.65%. Australia’s S&P/ASX 200 added 1.92%. South Korea’s Kospi edged up 0.34%, and the small-cap Kosdaq increased 0.96%. Hong Kong’s Hang Seng Index rose 1.58%, and its Tech Index jumped 3.57%, rebounding after Monday’s sharp decline of over 13%—its steepest single-day drop since 1997, according to FactSet.

Mainland China’s CSI 300 gained 0.96%, but markets in Southeast Asia remained under pressure. Indonesia’s Jakarta Composite dropped 7.63% following a trading halt triggered by a circuit breaker. Vietnam’s benchmark index fell 5.6% after returning from a holiday, and Thailand’s SET index declined over 5% to reach its lowest level since March 2020, based on data from LSEG.

Meanwhile, U.S. stock futures traded higher following a three-day losing streak sparked by Trump’s tariff announcement. S&P 500 futures rose around 1%, Nasdaq-100 futures gained 1.1%, and Dow Jones futures climbed 476 points, or 1.2%. On Monday, the Dow Jones Industrial Average slipped 0.91% to 37,965.60, while the S&P 500 declined 0.23% to 5,062.25. The Nasdaq Composite was the only major index to notch a gain, rising 0.10% to close at 15,603.26.

Upcoming Events: 

• 02:00 PM GMT – CAD Ivey PMI

The post Tuesday 8th April 2025: Asia-Pacific Markets Rebound After Trump’s Tariff Threats first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 8 April 2025

What happened in the Asia session?

Australia’s Westpac-Melbourne Institute Consumer Sentiment Index slumped 6% in April, dropping from 95.9 in the prior month to 90.1 to register the lowest reading in six months as concerns surrounding a global trade war escalated to dampen consumer optimism. Meanwhile, the NAB business confidence index declined for the second consecutive month, tumbling from -2 in the previous month to -3 in March, marking the lowest figure since November 2024. Industry sentiment was mixed, with confidence slipping in finance, property & business services, and manufacturing, while mining, retail, recreation, and transport saw gains. Despite the weaker-than-anticipated surveys, the Aussie rose strongly to climb above 0.6050 by midday in Asia.

What does it mean for the Europe & US sessions?

The Ivey PMI soared to 55.3 in February 2025 from 2020-lows of 47.1 in January, beating market expectations of 50.6. It was the highest reading in seven months, as employment rebounded while inventories declined. However, PMI activity could now contract sharply in March as concerns surrounding a global trade war mount aggressively. After faltering over the last two trading days, demand for the Loonie looks set to return on Tuesday.

Moving over to U.S. crude oil inventories, the API stockpiles have increased noticeably over the past four weeks – typically a sign of lower crude demand in the United States. Should the API report highlight another week of significantly higher stockpiles, overhead pressures are likely to intensify once more. WTI oil was floating around $61.50 before the start of this session.

The Dollar Index (DXY)

Key news events today

NFIB Small Business Index (10:00 am GMT)

What can we expect from DXY today?

The National Federation of Independent Business (NFIB) Small Business Index fell from 102.8 in the prior month to 100.7 in February as uncertainty was high and rose on Main Street with many small business owners who were expecting better business conditions in the next six months dropped – inflation and labour quality continue to remain a major concern for business owners. Following last week’s tariff announcements by the White House, this index will likely take a big hit as optimism is all but certain to tank.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 19 March 2025
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run but uncertainty around the economic outlook has increased; the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while the unemployment rate has stabilized at a low level in recent months, and labour market conditions remain solid. However, inflation remains somewhat elevated.
• GDP growth forecasts were revised downward for 2025 (1.7% vs. 2.1% in the December projection) while PCE inflation projections have been adjusted slightly higher for 2025, with core inflation expected to reach 2.5%, partly due to tariff-related pressures.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and is prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.
• Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25B to $5B while maintaining the monthly redemption cap on agency debt and agency mortgage-backed securities at $35B.
• The next meeting is scheduled for 6 to 7 May 2025.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

NFIB Small Business Index (10:00 am GMT)

What can we expect from Gold today?

The National Federation of Independent Business (NFIB) Small Business Index fell from 102.8 in the prior month to 100.7 in February as uncertainty was high and rose on Main Street with many small business owners who were expecting better business conditions in the next six months dropped – inflation and labour quality continue to remain a major concern for business owners. Following last week’s tariff announcements by the White House, this index will likely take a big hit as optimism is all but certain to tank. Spot prices for gold hovered around $3,000/oz as Asian markets came online.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

Westpac Consumer Sentiment (12:30 am GMT)

NAB Business Confidence (1:30 am GMT)

What can we expect from AUD today?

Australia’s Westpac-Melbourne Institute Consumer Sentiment Index slumped 6% in April, dropping from 95.9 in the prior month to 90.1 to register the lowest reading in six months as concerns surrounding a global trade war escalated to dampen consumer optimism. Meanwhile, the NAB business confidence index declined for the second consecutive month, tumbling from -2 in the previous month to -3 in March, marking the lowest figure since November 2024. Industry sentiment was mixed, with confidence slipping in finance, property & business services, and manufacturing, while mining, retail, recreation, and transport saw gains. Despite the weaker-than-anticipated surveys, the Aussie rose strongly to climb above 0.6050 by midday in Asia.

Central Bank Notes:

• The RBA maintained the cash rate at 4.10% on 1 April, following a 25-basis point reduction on 18 February.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance.
• Recent information suggests that underlying inflation continues to ease in line with the most recent forecasts published in the February Statement on Monetary Policy.
• Private domestic demand appears to be recovering, real household incomes have picked up and there has been an easing in some measures of financial stress. However, businesses in some sectors continue to report that weakness in demand makes it difficult to pass on cost increases to final prices.
• At the same time, a range of indicators suggest that labour market conditions remain tight. Despite a decline in employment in February, measures of labour underutilisation are at relatively low rates and business surveys and liaison suggest that availability of labour is still a constraint for a range of employers. Wage pressures have eased a little more than expected but productivity growth has not picked up and growth in unit labour costs remains high.
• There are notable uncertainties about the outlook for domestic economic activity and inflation. The central projection is for growth in household consumption to continue to increase as income growth rises. But there is a risk that any pick-up in consumption is slower than expected, resulting in continued subdued output growth and a sharper deterioration in the labour market than currently expected.
• Uncertainty about the outlook abroad also remains significant. On the macroeconomic policy front, recent announcements from the U.S. on tariffs are having an impact on confidence globally and this would likely be amplified if the scope of tariffs widens, or other countries take retaliatory measures. Geopolitical uncertainties are also pronounced.
• The Board’s assessment is that monetary policy remains restrictive and the continued decline in underlying inflation is welcome, but there are nevertheless risks on both sides and the Board is cautious about the outlook.
• The Board will rely upon the data and the evolving assessment of risks to guide its decisions and is resolute in its determination to sustainably return inflation to target and will do what is necessary to achieve that outcome.
• The next meeting is on 20 May 2025.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

After tumbling over 4% during the last two trading days, the Kiwi stabilized around 0.5520 in early trading on Tuesday. With demand for the dollar remaining fragile, this currency pair should edge higher as the day progresses.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 3.75% on 19 February, marking the fourth consecutive rate cut.
• The Committee assessed that annual consumer price inflation remains near the midpoint of the MPC’s 1 to 3% target band; inflation expectations are at target and core inflation continues to fall towards the target mid-point.
• Economic activity in New Zealand remains subdued and with spare productive capacity, domestic inflation pressures continue to ease. Price and wage-setting behaviours are adapting to a low-inflation environment while the price of imports has fallen, also contributing to lower headline inflation.
• Economic growth is expected to recover during 2025 as lower interest rates will encourage spending, although elevated global economic uncertainty is expected to weigh on business investment decisions. Higher prices for some key commodities and a lower exchange rate will increase export revenues and employment growth is expected to pick up in the second half of the year as the domestic economy recovers.
• Global economic growth is expected to remain subdued in the near term as geopolitics, including uncertainty about trade barriers, is likely to weaken global growth. Global economic activity is also likely to remain fragile over the medium term given increasing geoeconomic fragmentation.
• Consumer price inflation is expected to be volatile in the near term, due to a lower exchange rate and higher petrol prices. Nevertheless, the Committee is well placed to maintain price stability over the medium term.
• The economic outlook remains consistent with inflation remaining in the band over the medium term, giving the Committee confidence to continue lowering the OCR. If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025.
• The next meeting is on 9 April 2025.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Despite USD/JPY rebounding strongly on Monday, demand for safe-haven assets such as the Japanese yen remained robust – this currency pair climbed above 148 overnight before retreating. Downward pressures mounted on USD/JPY as it slid under 147.50 at the beginning of the Asia session.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 19 March, by a unanimous vote, to maintain the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will continue its plan to reduce the amount of its monthly outright purchases of JGBs, aiming to reach about 3 trillion yen by January-March 2026.
• Japan’s economy has continued to recover moderately, with some sectors showing improvement. Exports and industrial production have remained relatively stable, while corporate profits continue on an improving trend and business sentiment maintains a favourable level.
• The employment and income situation has shown moderate improvement, with private consumption on a moderately increasing trend despite ongoing impacts from price rises.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 3.0-3.5% recently. Services prices continue to rise moderately, reflecting factors such as wage increases, while the effects of cost pass-through from past import price rises have diminished.
• Inflation expectations have continued to rise moderately, with underlying CPI inflation gradually increasing toward the price stability target of 2%. The virtuous cycle between wages and prices continues to strengthen, with businesses increasingly reflecting higher costs in selling prices.
• Japan’s economy is expected to maintain growth above its potential rate, supported by moderately growing overseas economies and the intensifying virtuous cycle from income to spending, underpinned by accommodative financial conditions.
• The next meeting is scheduled for 19 June 2025.

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Despite Germany’s aggressive fiscal plan to revive and kickstart their economy, industrial production declined more than expected, falling 1.3% MoM in February, exceeding the forecast of a 0.9%-decline on Monday. Meanwhile, the trade surplus widened less than anticipated, increasing from €16.2B to €17.7B, missing estimates of a €18.4B rise. The Euro reversed sharply from Monday’s high of 1.1050 before briefly sliding under 1.0900. However, this currency pair should resume its upward momentum on Tuesday as financial markets continue to ditch the greenback.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 6 March to mark the fifth successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.65%, 2.90% and 2.50% respectively.
• The Council acknowledged that monetary policy was becoming meaningfully less restrictive, easing borrowing costs for businesses and households with inflation projected to average 2.3% in 2025, 1.9% in 2026, and 2.0% in 2027, while core inflation also neared the 2% target.
• Although domestic inflation remains elevated due to delayed wage and price adjustments, wage growth is moderating.
• Economic growth forecasts were revised downward to 0.9% for 2025 and 1.2% for 2026, reflecting weak exports and investment.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The ECB remains data-dependent and will adjust its policy as needed to ensure inflation stabilizes around its 2% medium-term target without committing to a specific rate path.
• The next meeting is on 17 April 2025.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Despite USD/CHF rebounding strongly on Monday, demand for safe-haven assets such as the Swiss franc remained robust. This currency pair hit an overnight high of 0.8673 before settling around 0.8600 – downward pressures were mounting as Asian markets came online with USD/CHF looking set to resume its slide on Tuesday.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, from 0.50% to 0.25% on 20 March 2025, marking the fifth consecutive reduction.
• Underlying inflationary pressure has decreased further this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected, decreasing from 0.7% in November to 0.3% in February, primarily due to lower electricity prices.
• In the shorter term, the new conditional inflation forecast is slightly higher than December: 0.3% for Q2 2025, 0.4% for 2025 overall, and 0.8% for 2026 and 2027, based on the assumption that the SNB policy rate remains at 0.25% over the entire forecast horizon.
• GDP growth in Switzerland remains moderate, with the services sector continuing to show slightly stronger growth, while manufacturing faces challenges.
• The SNB anticipates GDP growth of around 1.0% to 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 19 June 2025.

Next 24 Hours Bias

Medium Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

After tumbling sharply over the last couple of trading days, Cable found its footing in early trading on Tuesday. This currency pair established a floor around 1.2720 and it could resume its ascent as demand for the greenback remains frail.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to maintain the Bank Rate at 4.50% on 19 March 2025, while one member preferred to reduce it by 25 basis points (bps).
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Twelve-month CPI inflation increased to 3.0% in January from 2.5% in December, slightly higher than expected in the February Report; domestic price and wage pressures are moderating, but remain somewhat elevated.
• Although global energy prices have fallen back recently, they remain higher than last year and CPI inflation is still projected to rise to around 3.75% in 2025 Q3. While CPI inflation is expected to fall back thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• While UK GDP growth estimates have been slightly stronger than expected at the time of the February Monetary Policy Report, business survey indicators generally continue to suggest weakness in growth and particularly in employment intentions. In recent quarters, subdued activity has been judged to reflect both demand and supply factors.
• The labour market had continued to ease, although it was still judged to be broadly in balance – some indicators of employment intentions had deteriorated markedly, to levels consistent with shrinking employment while other indicators, such as the number of vacancies, had not weakened to the same extent.
• Domestic price and wage pressures were moderating, but remained somewhat elevated. A range of indicators suggested that underlying pay growth had eased further in recent months, although annual growth in private sector regular average weekly earnings had picked up to 6.1% in the three months to January.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

Ivey PMI (2:00 pm GMT)

What can we expect from CAD today?

The Ivey PMI soared to 55.3 in February 2025 from 2020-lows of 47.1 in January, beating market expectations of 50.6. It was the highest reading in seven months, as employment rebounded while inventories declined. However, PMI activity could now contract sharply in March as concerns surrounding a global trade war mount aggressively. After faltering over the last two trading days, demand for the Loonie looks set to return on Tuesday.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points bringing it down to 2.75% on 12 March; this marked the seventh consecutive meeting where rates were reduced.
• The bank announced its plan to complete the normalization of its balance sheet, ending quantitative tightening, and will restart asset purchases in early March, beginning gradually so that its balance sheet stabilizes and then grows modestly, in line with growth in the economy.
• The Governing Council noted that the economy grew more than expected in the fourth quarter of last year, spurred by past rate cuts but growth is now expected to slow at the turn of the year due to increasing trade conflict with the United States.
• Employment growth strengthened in November through January and the unemployment rate declined to 6.6%. In February, job growth stalled. While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt the recovery in the jobs market. Meanwhile, wage growth has shown signs of moderation.
• Inflation remains close to the 2% target. The temporary suspension of the GST/HST lowered some consumer prices, but January’s CPI was slightly firmer than expected at 1.9%. Inflation is expected to increase to about 2½% in March with the end of the tax break. The Bank’s preferred measures of core inflation remain above 2%, mainly because of the persistence of shelter price inflation. Short-term inflation expectations have risen in light of fears about the impact of tariffs on prices.
• While economic growth has come in stronger than expected, the pervasive uncertainty created by continuously changing U.S. tariff threats is restraining consumers’ spending intentions and businesses’ plans to hire and invest.
• While monetary policy cannot offset the impacts of a trade war, the Governing Council will carefully assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.
• The Council will also be closely monitoring inflation expectations and is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 16 April 2025.

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

API Crude Oil Stockpiles (8:30 pm GMT)

What can we expect from Oil today?

After falling nearly 5% at its lowest point on Monday, crude oil prices stabilized with WTI oil reversing off its lows at $58.95 to settle around $60.70 per barrel. The commodity markets continue to be roiled with tariff-related news headlines and announcements, keeping volatility elevated. Meanwhile, the API stockpiles have increased noticeably over the past four weeks, typically a sign of lower crude demand in the United States. Should the API report highlight another week of significantly higher stockpiles, overhead pressures are likely to intensify once more.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Europe Fundamental Forecast | 8 April 2025 first appeared on IC Markets | Official Blog.

• If US wants to talk, it should show attitude for equality and respect
• If US insists on a trade war, China will fight until the end
• China will take necessary measures against latest tariffs threat

As mentioned earlier, this is still one spot that markets have to watch closely. Even if there is the potential for negotiations to progress elsewhere, a tariffs war between the two largest economies in the world is nothing to scoff at.

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

It looks like at least we’ve moved past peak fear for now but it doesn’t meant that the coast is clear. The storm clouds are still circling as Trump’s tariffs are due to hit in the next day, with potential for an escalation in trade tensions with China as well. In case you missed it, Trump warned on that overnight:

“Yesterday, China issued Retaliatory Tariffs of 34%, on top of their already record setting Tariffs, Non-Monetary Tariffs, Illegal Subsidization of companies, and massive long term Currency Manipulation, despite my warning that any country that Retaliates against the U.S. by issuing additional Tariffs, above and beyond their already existing long term Tariff abuse of our Nation, will be immediately met with new and substantially higher Tariffs, over and above those initially set. Therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th. Additionally, all talks with China concerning their requested meetings with us will be terminated!”

For the time being, we’re seeing market players catch a slight breather. S&P 500 futures are up 0.9% with 10-year Treasury yields keeping steadier around 4.14%. On the latter, it’s still hard to get a gauge to what extent we saw liquidations to meet margin requirements and what not. But do keep an eye out for the Treasury auctions tomorrow and on Thursday for a read on that.

In FX, we’re seeing the dollar trade lower on the day after the gains overnight. EUR/USD is up 0.5% to 1.0965 while GBP/USD is recovering after the plunge in the past two days to be up 0.4% to 1.2770 currently. Meanwhile, AUD/USD is also marked up by 1% to 0.6045 at the moment.

It’s all still early in the day though with plenty of headline risks surely still to come especially in US trading later. For now, I guess we can afford a bit of a breather with little on the agenda in Europe as well.

0645 GMT – France February trade balance data1000 GMT – US March NFIB small business optimism index

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

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

• S&P 500 futures +1.4%
• Nasdaq futures +1.1%
• Dow futures +1.7%

While there is a suggestion that market players are holding out some optimism for Trump to start making deals, the threat of him just letting the world burn in the meantime is still very much alive. There’s only 24 hours left before the tariffs come into effect and by the look of things, it is only Japan that is likely to settle upon something – at least for now.

As for the rest of the world, there will be at the minimum some short-term mess and pain to deal with from Trump’s tariffs. At best, that may only persist for a few more days/weeks as negotiations lead to some compromise. At worst though, this continues and the global economy is rocked hard in the months ahead.

The fake news on the 90-day tariffs pause yesterday shows how strong the risk appetite among dip buyers can be. But we’re not likely to see that again, at least in a realistic way, so it sort of rules out any instantaneous switch in the risk mood.

That means risk trades will have to gradually look for some form of stabilisation perhaps. And that might not be an easy thing when the best one can hope for is to just stare at the screens in hopes for negotiations and deals to be struck.

In the meantime, the longer the tariffs run their course will just mean more pain for the global economy as a whole. That especially if US-China trade tensions continue to escalate further as well.

The bottom line is that while there is some reprieve so far today, we’re not close to a major turning point yet as there are still so many uncertainties that need resolving.

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

DXY (US Dollar Index):

Potential Direction: Bearish 

Overall momentum of the chart: Bearish

Price could  make a bearish continuation toward the 1st support.

Pivot: 103.21
Supporting reasons: Identified as an overlap resistance that aligns close to the 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify. 

1st support: 101.37
Supporting reasons: Identified as a swing low support, indicating a potential area where the price could stabilize once again.

1st resistance: 104.72
Supporting reasons: Identified as a swing high resistance, indicating a potential level that could cap further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could make a bullish continuation toward the 1st resistance.

Pivot: 1.0912
Supporting reasons: Identified as an overlap support that aligns close to the 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 1.0722
Supporting reasons: Identified as a swing low support, indicating a potential area where the price could stabilize once more.

1st resistance: 1.1089
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish continuation toward the 1st resistance.

Pivot: 158.18

Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 155.55
Supporting reasons: Identified as a swing low support, indicating a potential area where the price could stabilize once again.

1st resistance: 164.05
Supporting reasons: Identified as a swing low resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could fall toward the pivot and potentially make a bullish bounce off this level to rise toward the 1st resistance.

Pivot: 0.8462

Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 0.8332
Supporting reasons: Identified as a swing low support, indicating a potential area where the price could stabilize once more.

1st resistance: 0.8626
Supporting reasons: Identified as a swing high resistance that aligns close to the 161.8% Fibonacci projection, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 1.2881
Supporting reasons: Identified as a pullback resistance,  indicating a potential area where selling pressures could intensify.

1st support: 1.2695
Supporting reasons: Identified as an overlap support that aligns close to the 161.8% Fibonacci extension, acting as a potential level where the price could stabilize once again.

1st resistance: 1.3163
Supporting reasons: Identified as a swing high resistance, indicating a potential level that could cap further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 189.21
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 186.17
Supporting reasons: Identified as a swing low support, indicating a potential level where the price could stabilize once more.

1st resistance: 192.21
Supporting reasons: Identified as a pullback resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential level that could cap further upward movement.

USD/CHF:

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 0.8755
Supporting reasons: Identified as a pullback resistance that aligns close to the 78.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.8519
Supporting reasons: Identified as a multi-swing low support, indicating a potential level where the price could stabilize once again.

1st resistance: 0.8864
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

USD/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation toward the 1st support.

Pivot: 148.22
Supporting reasons: Identified as an overlap resistance that aligns close to the 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 145.32
Supporting reasons: Identified as a multi swing low support, suggesting a potential area where the price could stabilize once more.

1st resistance: 151.28
Supporting reasons: Identified as a swing high resistance, indicating a potential level that could cap further upward movement.

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price has made a bearish reversal off the pivot and could potentially fall toward the 1st support.

Pivot: 1.4275

Supporting reasons: Identified as an overlap resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 1.4063
Supporting reasons: Identified as a swing-low support that aligns with a 61.8% Fibonacci projection, indicating a key level where the price could stabilize once more.

1st resistance: 1.4390
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 0.6115
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 0.5964

Supporting reasons: Identified as a swing-low support, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6192
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 0.5601
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 0.5516

Supporting reasons: Identified as a multi-swing-low support, suggesting a potential area where the price could stabilize once more.

1st resistance: 0.5671

Supporting reasons: Identified as a pullback resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is trading close to the pivot and could potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 38,614.13

Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 37,040.80

Supporting reasons: Identified as a swing-low support, indicating a potential level where the price could stabilize once again.

1st resistance: 40,202.56

Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 21,148.40

Supporting reasons: Identified as a pullback resistance that aligns with a 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 19,601.00

Supporting reasons: Identified as a swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 22,080.30
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is trading close to the pivot and could potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 5,146.82

Supporting reasons: Identified as a pullback resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 4,889.80

Supporting reasons: Identified as a swing-low support, indicating a potential level where the price could stabilize once again.

1st resistance: 5,385.30

Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 81,358.56

Supporting reasons: Identified as a pullback resistance that aligns with a 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 76,555.03
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where the price could stabilize once more.

1st resistance: 86,682.04
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 1,770.98

Supporting reasons: Identified as a pullback resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 1,488.91
Supporting reasons: Identified as a swing-low support, indicating a potential level where the price could stabilize once again.

1st resistance: 1,947.17
Supporting reasons: Identified as an overlap resistance that aligns with a 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 65.94

Supporting reasons: Identified as a pullback resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 59.68
Supporting reasons: Identified as a swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 68.75
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could make a bullish continuation toward the 1st resistance.

Pivot: 2954.81
Supporting reasons: Identified as a pullback support that aligns with the 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 2882.27
Supporting reasons: Identified as an overlap support, acting as a potential level where price could stabilize once again.

1st resistance: 3049.66
Supporting reasons: Identified as a pullback resistance that aligns close to the 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

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The post Tuesday 8th April 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 8 April 2025

What happened in the U.S. session?

Volatility across all major asset classes remained elevated as stocks saw a wild session at the start of the U.S. trading hours. A false report about U.S. President Donald Trump issuing a 90-day pause on tariffs for all countries bar China initially lit a fire under U.S. stocks. However, this rally quickly vanished as the pause was rebutted by the White House and declared as ‘fake news’ by President Trump’s administration. Demand for the greenback returned momentarily as the dollar index (DXY) reversed off its lows at 102.20 to rise above 103 overnight. However, overhead pressures remain and this index could resume its downward slide on Tuesday.

What does it mean for the Asia Session?

Australia’s Westpac-Melbourne Institute Consumer Sentiment Index rose 4% in March, reaching 95.9 from 92.2 in the previous month to mark its highest level in three years. The increase was driven by the Reserve Bank of Australia’s interest rate cut in February and easing cost-of-living pressures. Meanwhile, the NAB business confidence index tumbled to -1 in February from an upwardly revised 5 in the prior month, marking the first negative reading of 2025 as sentiment fell across industries, particularly in mining; recreation; and transport. Coupled with the ongoing escalating concerns surrounding a global trade war, both consumer sentiment and business confidence will no doubt take another hit in March.

The Dollar Index (DXY)

Key news events today

NFIB Small Business Index (10:00 am GMT)

What can we expect from DXY today?

The National Federation of Independent Business (NFIB) Small Business Index fell from 102.8 in the prior month to 100.7 in February as uncertainty was high and rose on Main Street with many small business owners who were expecting better business conditions in the next six months dropped – inflation and labour quality continue to remain a major concern for business owners. Following last week’s tariff announcements by the White House, this index will likely take a big hit as optimism is all but certain to tank.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 19 March 2025
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run but uncertainty around the economic outlook has increased; the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while the unemployment rate has stabilized at a low level in recent months, and labour market conditions remain solid. However, inflation remains somewhat elevated.
• GDP growth forecasts were revised downward for 2025 (1.7% vs. 2.1% in the December projection) while PCE inflation projections have been adjusted slightly higher for 2025, with core inflation expected to reach 2.5%, partly due to tariff-related pressures.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and is prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.
• Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25B to $5B while maintaining the monthly redemption cap on agency debt and agency mortgage-backed securities at $35B.
• The next meeting is scheduled for 6 to 7 May 2025.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

NFIB Small Business Index (10:00 am GMT)

What can we expect from Gold today?

The National Federation of Independent Business (NFIB) Small Business Index fell from 102.8 in the prior month to 100.7 in February as uncertainty was high and rose on Main Street with many small business owners who were expecting better business conditions in the next six months dropped – inflation and labour quality continue to remain a major concern for business owners. Following last week’s tariff announcements by the White House, this index will likely take a big hit as optimism is all but certain to tank. Spot prices for gold hovered around $3,000/oz as Asian markets came online.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

Westpac Consumer Sentiment (12:30 am GMT)

NAB Business Confidence (1:30 am GMT)

What can we expect from AUD today?

Australia’s Westpac-Melbourne Institute Consumer Sentiment Index rose 4% in March, reaching 95.9 from 92.2 in the previous month to mark its highest level in three years. The increase was driven by the Reserve Bank of Australia’s interest rate cut in February and easing cost-of-living pressures. Meanwhile, the NAB business confidence index tumbled to -1 in February from an upwardly revised 5 in the prior month, marking the first negative reading of 2025 as sentiment fell across industries, particularly in mining; recreation; and transport. Coupled with the ongoing escalating concerns surrounding a global trade war, both consumer sentiment and business confidence will no doubt take another hit in March.

Central Bank Notes:

• The RBA maintained the cash rate at 4.10% on 1 April, following a 25-basis point reduction on 18 February.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance.
• Recent information suggests that underlying inflation continues to ease in line with the most recent forecasts published in the February Statement on Monetary Policy.
• Private domestic demand appears to be recovering, real household incomes have picked up and there has been an easing in some measures of financial stress. However, businesses in some sectors continue to report that weakness in demand makes it difficult to pass on cost increases to final prices.
• At the same time, a range of indicators suggest that labour market conditions remain tight. Despite a decline in employment in February, measures of labour underutilisation are at relatively low rates and business surveys and liaison suggest that availability of labour is still a constraint for a range of employers. Wage pressures have eased a little more than expected but productivity growth has not picked up and growth in unit labour costs remains high.
• There are notable uncertainties about the outlook for domestic economic activity and inflation. The central projection is for growth in household consumption to continue to increase as income growth rises. But there is a risk that any pick-up in consumption is slower than expected, resulting in continued subdued output growth and a sharper deterioration in the labour market than currently expected.
• Uncertainty about the outlook abroad also remains significant. On the macroeconomic policy front, recent announcements from the U.S. on tariffs are having an impact on confidence globally and this would likely be amplified if the scope of tariffs widens, or other countries take retaliatory measures. Geopolitical uncertainties are also pronounced.
• The Board’s assessment is that monetary policy remains restrictive and the continued decline in underlying inflation is welcome, but there are nevertheless risks on both sides and the Board is cautious about the outlook.
• The Board will rely upon the data and the evolving assessment of risks to guide its decisions and is resolute in its determination to sustainably return inflation to target and will do what is necessary to achieve that outcome.
• The next meeting is on 20 May 2025.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

After tumbling over 4% during the last two trading days, the Kiwi stabilized around 0.5520 in early trading on Tuesday. With demand for the dollar remaining fragile, this currency pair should edge higher as the day progresses.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 3.75% on 19 February, marking the fourth consecutive rate cut.
• The Committee assessed that annual consumer price inflation remains near the midpoint of the MPC’s 1 to 3% target band; inflation expectations are at target and core inflation continues to fall towards the target mid-point.
• Economic activity in New Zealand remains subdued and with spare productive capacity, domestic inflation pressures continue to ease. Price and wage-setting behaviours are adapting to a low-inflation environment while the price of imports has fallen, also contributing to lower headline inflation.
• Economic growth is expected to recover during 2025 as lower interest rates will encourage spending, although elevated global economic uncertainty is expected to weigh on business investment decisions. Higher prices for some key commodities and a lower exchange rate will increase export revenues and employment growth is expected to pick up in the second half of the year as the domestic economy recovers.
• Global economic growth is expected to remain subdued in the near term as geopolitics, including uncertainty about trade barriers, is likely to weaken global growth. Global economic activity is also likely to remain fragile over the medium term given increasing geoeconomic fragmentation.
• Consumer price inflation is expected to be volatile in the near term, due to a lower exchange rate and higher petrol prices. Nevertheless, the Committee is well placed to maintain price stability over the medium term.
• The economic outlook remains consistent with inflation remaining in the band over the medium term, giving the Committee confidence to continue lowering the OCR. If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025.
• The next meeting is on 9 April 2025.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Despite USD/JPY rebounding strongly on Monday, demand for safe-haven assets such as the Japanese yen remained robust – this currency pair climbed above 148 overnight before retreating. Downward pressures mounted on USD/JPY as it slid under 147.50 at the beginning of the Asia session.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 19 March, by a unanimous vote, to maintain the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will continue its plan to reduce the amount of its monthly outright purchases of JGBs, aiming to reach about 3 trillion yen by January-March 2026.
• Japan’s economy has continued to recover moderately, with some sectors showing improvement. Exports and industrial production have remained relatively stable, while corporate profits continue on an improving trend and business sentiment maintains a favourable level.
• The employment and income situation has shown moderate improvement, with private consumption on a moderately increasing trend despite ongoing impacts from price rises.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 3.0-3.5% recently. Services prices continue to rise moderately, reflecting factors such as wage increases, while the effects of cost pass-through from past import price rises have diminished.
• Inflation expectations have continued to rise moderately, with underlying CPI inflation gradually increasing toward the price stability target of 2%. The virtuous cycle between wages and prices continues to strengthen, with businesses increasingly reflecting higher costs in selling prices.
• Japan’s economy is expected to maintain growth above its potential rate, supported by moderately growing overseas economies and the intensifying virtuous cycle from income to spending, underpinned by accommodative financial conditions.
• The next meeting is scheduled for 19 June 2025.

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Despite Germany’s aggressive fiscal plan to revive and kickstart their economy, industrial production declined more than expected, falling 1.3% MoM in February, exceeding the forecast of a 0.9%-decline on Monday. Meanwhile, the trade surplus widened less than anticipated, increasing from €16.2B to €17.7B, missing estimates of a €18.4B rise. The Euro reversed sharply from Monday’s high of 1.1050 before briefly sliding under 1.0900. However, this currency pair should resume its upward momentum on Tuesday as financial markets continue to ditch the greenback.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 6 March to mark the fifth successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.65%, 2.90% and 2.50% respectively.
• The Council acknowledged that monetary policy was becoming meaningfully less restrictive, easing borrowing costs for businesses and households with inflation projected to average 2.3% in 2025, 1.9% in 2026, and 2.0% in 2027, while core inflation also neared the 2% target.
• Although domestic inflation remains elevated due to delayed wage and price adjustments, wage growth is moderating.
• Economic growth forecasts were revised downward to 0.9% for 2025 and 1.2% for 2026, reflecting weak exports and investment.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The ECB remains data-dependent and will adjust its policy as needed to ensure inflation stabilizes around its 2% medium-term target without committing to a specific rate path.
• The next meeting is on 17 April 2025.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Despite USD/CHF rebounding strongly on Monday, demand for safe-haven assets such as the Swiss franc remained robust. This currency pair hit an overnight high of 0.8673 before settling around 0.8600 – downward pressures were mounting as Asian markets came online with USD/CHF looking set to resume its slide on Tuesday.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, from 0.50% to 0.25% on 20 March 2025, marking the fifth consecutive reduction.
• Underlying inflationary pressure has decreased further this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected, decreasing from 0.7% in November to 0.3% in February, primarily due to lower electricity prices.
• In the shorter term, the new conditional inflation forecast is slightly higher than December: 0.3% for Q2 2025, 0.4% for 2025 overall, and 0.8% for 2026 and 2027, based on the assumption that the SNB policy rate remains at 0.25% over the entire forecast horizon.
• GDP growth in Switzerland remains moderate, with the services sector continuing to show slightly stronger growth, while manufacturing faces challenges.
• The SNB anticipates GDP growth of around 1.0% to 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 19 June 2025.

Next 24 Hours Bias

Medium Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

After tumbling sharply over the last couple of trading days, Cable found its footing in early trading on Tuesday. This currency pair established a floor around 1.2720 and it could resume its ascent as demand for the greenback remains frail.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to maintain the Bank Rate at 4.50% on 19 March 2025, while one member preferred to reduce it by 25 basis points (bps).
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Twelve-month CPI inflation increased to 3.0% in January from 2.5% in December, slightly higher than expected in the February Report; domestic price and wage pressures are moderating, but remain somewhat elevated.
• Although global energy prices have fallen back recently, they remain higher than last year and CPI inflation is still projected to rise to around 3.75% in 2025 Q3. While CPI inflation is expected to fall back thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• While UK GDP growth estimates have been slightly stronger than expected at the time of the February Monetary Policy Report, business survey indicators generally continue to suggest weakness in growth and particularly in employment intentions. In recent quarters, subdued activity has been judged to reflect both demand and supply factors.
• The labour market had continued to ease, although it was still judged to be broadly in balance – some indicators of employment intentions had deteriorated markedly, to levels consistent with shrinking employment while other indicators, such as the number of vacancies, had not weakened to the same extent.
• Domestic price and wage pressures were moderating, but remained somewhat elevated. A range of indicators suggested that underlying pay growth had eased further in recent months, although annual growth in private sector regular average weekly earnings had picked up to 6.1% in the three months to January.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

Ivey PMI (2:00 pm GMT)

What can we expect from CAD today?

The Ivey PMI soared to 55.3 in February 2025 from 2020-lows of 47.1 in January, beating market expectations of 50.6. It was the highest reading in seven months, as employment rebounded while inventories declined. However, PMI activity could now contract sharply in March as concerns surrounding a global trade war mount aggressively. After faltering over the last two trading days, demand for the Loonie looks set to return on Tuesday.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points bringing it down to 2.75% on 12 March; this marked the seventh consecutive meeting where rates were reduced.
• The bank announced its plan to complete the normalization of its balance sheet, ending quantitative tightening, and will restart asset purchases in early March, beginning gradually so that its balance sheet stabilizes and then grows modestly, in line with growth in the economy.
• The Governing Council noted that the economy grew more than expected in the fourth quarter of last year, spurred by past rate cuts but growth is now expected to slow at the turn of the year due to increasing trade conflict with the United States.
• Employment growth strengthened in November through January and the unemployment rate declined to 6.6%. In February, job growth stalled. While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt the recovery in the jobs market. Meanwhile, wage growth has shown signs of moderation.
• Inflation remains close to the 2% target. The temporary suspension of the GST/HST lowered some consumer prices, but January’s CPI was slightly firmer than expected at 1.9%. Inflation is expected to increase to about 2½% in March with the end of the tax break. The Bank’s preferred measures of core inflation remain above 2%, mainly because of the persistence of shelter price inflation. Short-term inflation expectations have risen in light of fears about the impact of tariffs on prices.
• While economic growth has come in stronger than expected, the pervasive uncertainty created by continuously changing U.S. tariff threats is restraining consumers’ spending intentions and businesses’ plans to hire and invest.
• While monetary policy cannot offset the impacts of a trade war, the Governing Council will carefully assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.
• The Council will also be closely monitoring inflation expectations and is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 16 April 2025.

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

API Crude Oil Stockpiles (8:30 pm GMT)

What can we expect from Oil today?

After falling nearly 5% at its lowest point on Monday, crude oil prices stabilized with WTI oil reversing off its lows at $58.95 to settle around $60.70 per barrel. The commodity markets continue to be roiled with tariff-related news headlines and announcements, keeping volatility elevated. Meanwhile, the API stockpiles have increased noticeably over the past four weeks, typically a sign of lower crude demand in the United States. Should the API report highlight another week of significantly higher stockpiles, overhead pressures are likely to intensify once more.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 8 April 2025 first appeared on IC Markets | Official Blog.

What a wild day in markets yesterday. It looked like we were bound for some pain early on in US trading before a fake headline sent markets into overdrive. If anything, it shows two things. One, that this is a market that is ready to rip on any positive headlines involving tariffs. Two, the unpredictability of Trump makes almost any headline to be conceivable.

Upon coming to terms with the fake news, we saw equities readjust lower. But a key takeaway was that it didn’t quite wipe out remaining dip buyers and they came back in late yesterday amid some hopeful optimism.

For one, the US showed some willingness in talks with Japan. And I think that’s a very big tell about Trump’s intentions when it comes to the tariffs approach. Sure, Japan is a close US ally so there might be some bias. But still, it shows some wiggle room and in all likelihood, I would expect tariffs against Japan to be watered down before the deadline tomorrow.

The second thing is Trump continuing to tweet and/or retweet things like these:

“Negotiations with other countries, which have also requested meetings, will begin taking place immediately.”

“More than 50 countries have reached out to the president to begin a negotiation…”

“Countries from all over the World are talking to us. Tough but fair parameters are being set.”

“Secretary of Treasury, Scott Bessent: Almost 70 countries have now approached us wanting to help rebalance global trade…”

As a reminder, Trump’s tariffs will go into effect in about 24 hours from now (9 April 12am ET). Even if some countries might not be able to secure any deals or strike a compromise by then, it doesn’t mean there won’t be one in the coming days/weeks.

So, that’s the main thing to watch out for. Trump will want to demonstrate his resolve by showing that he is serious on implementing tariffs. But given the above, it shows that they may not be permanent so long as there are trade negotiations taking place.

The only wildcard though remains China. And that is a big risk that broader markets shouldn’t ignore. An escalation in trade conflict between the two biggest economies in the world is bound to reverberate across the globe. So, that is one key factor that risk trades need to be wary about despite holding out some optimism.

This was Trump’s latest verbal barrage towards China overnight:

“Yesterday, China issued Retaliatory Tariffs of 34%, on top of their already record setting Tariffs, Non-Monetary Tariffs, Illegal Subsidization of companies, and massive long term Currency Manipulation, despite my warning that any country that Retaliates against the U.S. by issuing additional Tariffs, above and beyond their already existing long term Tariff abuse of our Nation, will be immediately met with new and substantially higher Tariffs, over and above those initially set. Therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th. Additionally, all talks with China concerning their requested meetings with us will be terminated!”

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