Articles

Be aware: Pres. Trump will be signing Executive Orders at the top of the hour.

The details of the executive orders are unsure but there will be some press there. With tariffs to go into effect on April, if there is Q&A it will be on that. Markets will be focused on any hints of a lessening of tariffs or delay.

US stocks are well off their lows and trading to highs for the day. The S&P and the NASDAQ indices are still in negative territory:

• Dow industrial average up 122.33 points or 0.30% at 41708
• S&P index down 17.16 points or -0.31% at 5563.01
• NASDAQ index -204.70 points or -1.18% at 17118.25.: That session lows

At session lows:

• Dow industrial average was down -435.77 points
• S&P index was down -92.21 points
• NASDAQ index was down -468.62 points

This article was written by Greg Michalowski at www.forexlive.com.

China Japan and South Korea will reportedly jointly respond to the US tariffs:

• Japan and South Korea are seeking to import semi conductor raw materials from China.
• China is also interested in purchasing chip products from Japan and South Korea.
• China Japan and South Korea have consensus that they hope to keep the supply chain smooth in these areas.

China South Korea and Japan are looking to conduct high level free-trade agreement talks in reaction to the higher tariffs expected from Pres. Trump.

This article was written by Greg Michalowski at www.forexlive.com.

Some viral numbers did the rounds this week with data showing a forward year-over-year drop in Canadian air travel to the USA between 75% and 71% for April-September. It was even discussed on CNBC.

To illustrate: In April, the forward numbers show 295K passengers compared to 1.2 million a year ago.

Those are hard to believe given the bulk of those visits would have been booked well-before things got really bad between the US and Canada.

That said, the numbers come from respected airline flight database company OAG (who cites “a major GDS supplier”) but CIBC has questions, at least with respect to Air Canada.

“In our discussions with Air Canada, it does note it is seeing a softening in the
transborder market and has shifted some capacity, but the decline it has
experienced is not of the magnitude cited by OAG when it aggregates all
indirect and direct booking channels. AC notes the decline it is seeing in
transborder traffic is significantly less than what is being reported by
OAG.”

OAG’s own numbers also raise some questions as they show that forward seats available are only down around 3%. If demand was so bad, wouldn’t airlines be cancelling flights?

Time will tell (April data will start rolling in very shortly) but I think the truth is in the middle somewhere. For instance, Statistics Canada reports that Canadian
residents returning by vehicle from the US declined by 23% Y/Y in
February. That’s still a staggering drop but it’s not 70%.

On the other hand, if those 70% numbers are right, then the US tourism sector is in for a beating, as Canadians are the #1 visitors to the USA (by a long shot), followed by Mexicans (who also aren’t feeling the love). Tourism is a small part of the US economy overall but it’s a big part for some areas.

Update: Air Canada at its annual meeting today said that Canada-US travel bookings are down 10% in the next six months.

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

Tesla China’s announcing a three year interest rate loan for their refreshed model why.

They also offer five year interest free loans for model 3 Rearwheel Dr., long-range trim before April 30.

The company is fighting a tumble in sales in China.In China, where Shenzhen-based BYDis the biggest-selling EV brand, Tesla’s sales have fallen 49%.

Shares of Tesla currently trading down $16.27 or -6.14% at $247.56. Last week the price gap higher and tested its 200 day moving average at $287.04. However the price fell into the close on Friday with the price closing at $273.13. The high price last week reached $291.85 on Thursday.

The price decline today has now filled the gap from the close on Friday, March 21 to the open on Monday on March 24. That gap was between $249 and $256. The low price today has reached $243.36.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month -8.3
• March manufacturing index -16.3 versus -8.3 last month. Lower
• Output index 6 versus -9.1 in February.
• Shipments 6.1 versus 5.6 last month
• New orders -0.1 versus -3.5 last month. Higher
• Employment -4.6 versus -0.7 last month. Lower
• Prices paid for raw materials 37.7 versus 35.0 last month. Higher
• Prices received 6.3 versus 7.8 last month. Lower
• Wages and benefits 16.0 versus 16.7 last month. Unchanged
• Growth rate of new orders -8.1 versus -7.5 last month. Lower
• Hours worked -2.9 versus -14.2 last month. Higher
• Capital expenditures -0.6 versus 8.6 last month. Lower
• Capacity utilization -2.3 versus -8.7 last month. Higher

This article was written by Greg Michalowski at www.forexlive.com.

The day has been known, but with the so-called “Liberatation Day” ahead on April 2 where Pres. Trump’s administration will “hit essentially all countries with tariffs” in response to their tariffs, the global markets are bracing for slower growth and lower earnings as a result.

The futures are implying a lower opening across the board. European shares are also lower. The current futures are targeting:

• Dow industrial average -289 points
• S&P index -55 points
• NASDAQ index -265 points

On Friday, the broader indices fell for the third consecutive day. The Dow industrial average has been lower for four consecutive days:

• Dow industrial average -715.80.0 -1.69%
• S&P index -112.37 points or -1.97%
• NASDAQ index -481.04 points or -2.70%

For the trading week, the major indices all fell:

• Dow industrial average -0.96%
• S&P index -1.53%
• NASDAQ index -2.59%

This article was written by Greg Michalowski at www.forexlive.com.

Goldman Sachs has raised its estimate for the likelihood of a U.S. recession in the next 12 months to 35%, up from 20%. The company – not surprisingly – cites risks from escalating trade tensions and weakening consumer and business confidence. They also add that “statements from White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies”, is a contributing factor

The firm lowered its 2025 GDP growth forecast to 1% and now expects three interest rate cuts this year—in July, September, and November.

It revised its year-end inflation forecast higher to 3.5%, based on the Fed’s preferred PCE index, and sees the unemployment rate rising to 4.5% by year-end.

Other major institutions share similar concerns, with JPMorgan assigning a 40% recession probability and Moody’s Analytics’ Mark Zandi warning of a two-in-five chance, pointing to soft consumer spending and persistently high inflation.

This article was written by Greg Michalowski at www.forexlive.com.

The DAX has been under strong selling pressure after Trump placed 25% tariffs on auto imports last week. The index is now down more than 6% from the all-time highs and it’s testing a key trendline.

This is where we will likely see some dip-buyers stepping in with a defined risk below the trendline. The sellers, on the other hand, will look for a break lower to start targeting the next major trendline around the 21,000 level.

The negative mood coming from tariffs is impacting global equity markets in general. If US indices continue to sell off, it’s unlikely that we will see global equity markets rising.

April 2 is going to be an important day for all markets.

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

• Prior +2.3%
• CPI +0.3% vs +0.4% m/m expected
• Prior +0.4%
• HICP +2.3% vs +2.4% y/y expected
• Prior +2.6%
• HICP +0.4% vs +0.5% m/m expected
• Prior +0.6%

It’s a slight contrast to the state readings earlier here, which indicated some stickier price pressures. But considering this, the ECB can take in some extra comfort following the softer French and Spanish readings from last week as well. The added good news is that core annual inflation is projected to ease to 2.5% in March, down from 2.7% in February.

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

Headlines:

• Gold thrives as stagflationary risks continue to increase
• The gold train marches on for now
• USD/JPY slides lower as risk aversion grips markets to start the week
• Traders increase easing expectations for all central banks amid the global growth fears
• France’s Le Pen found guilty in case over misuse of parliamentary funds
• France’s Le Pen reportedly receives immediate election ban
• ECB president Lagarde: We’re almost at our inflation target
• ECB’s Panetta: The fight against inflation cannot be considered over
• Bavaria March CPI +2.3% vs +2.4% y/y prior
• Italy February preliminary CPI +2.0% vs +1.6% y/y expected
• Germany February import price index +0.3% vs 0.0% m/m expected
• Germany February retail sales +0.8% vs 0.0% m/m expected
• UK February mortgage approvals 65.5k vs 65.6k expected
• No Putin-Trump call scheduled so far for this week

Markets:

• JPY leads, AUD and NZD lag on the day
• European equities lower; S&P 500 futures down 1.2%
• US 10-year yields down 6.9 bps to 4.186%
• Gold up 1.0% to $3,113.42
• WTI crude up 0.1% to $69.43
• Bitcoin down 0.5% to $81,961

As we get closer to Trump’s so-called Liberation Day, markets are cowering in fear and seeking shelter in safe haven assets to start the new week. Trump’s tariffs are the main source of worries, with weekend news suggesting he may not take a targeted approach and go with broad-based with high tariffs.

That kept risk sentiment on the defensive right from the get go and things stuck that way in European morning trade as well.

Equities suffered throughout the session with European indices hammered down by around 2% across the board now. As for US futures, the losses kept piling on with S&P 500 futures having been down around 0.6% at the start of the session to now be down 1.2%. Nasdaq futures are down 1.6% currently as tech shares are being crushed ahead of the open.

In FX, the Japanese yen is the main beneficiary amid a bid in bonds as well. 10-year Treasury yields are down nearly 7 bps and that’s dragging down yen pairs to start the week. USD/JPY itself is also down 0.4% to 149.25 currently but fell to a low of 148.70 earlier in the session.

Meanwhile, the dollar is keeping steadier elsewhere while commodity currencies are the ones dragged through the mud. AUD/USD was lightly changed early on but is now down 0.6% to 0.6250 while USD/CAD is marked up by 0.2% to 1.4350 currently.

As traders look to traditional safe haven assets like the yen and bonds, gold is also another big beneficiary from all this. The precious metal climbed to a high of $3,128 at one stage but is still seen up 1% on the day to $3,113 at the moment.

Besides the focus on risk aversion, we also got a political bombshell in France as far right leader Marine Le Pen was found guilty in her graft trial. And that saw the French court sentence her to a five-year political ban, making her ineligible to run for presidency in 2027 – in which she has been the frontrunner.

And there was also inflation data from Germany and Italy. The former showed some stickiness in price pressures while headline numbers in the latter also jumped higher. However, Italian core inflation remained unchanged in February and still kept under 2%. So, that offers some comfort to the ECB after the softer French and Spanish readings last week.

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

Rate cuts by year-end

• Fed: 80 bps (76% probability of no change at the upcoming meeting)

• ECB: 64 bps (92% probability of rate cut at the upcoming meeting)

• BoE: 52 bps (66% probability of rate cut at the upcoming meeting)

• BoC: 55 bps (62% probability of no change at the upcoming meeting)

• RBA: 74 bps (83% probability of no change at the upcoming meeting)

• RBNZ: 66 bps (76% probability of rate cut at the upcoming meeting)
• SNB: 15 bps (74% probability of no change at the upcoming meeting)

Rate hikes by year-end

• BoJ: 31 bps (77% probability of no change at the upcoming meeting)

The easing expectations increased for all the central banks although for the Fed it was more aggressive which also weighed on the US Dollar in the short-term.

For the BoJ, the market just slightly decreased the expectations for the third rate hike this year because of the risks to the Japanese economy which have also been reflected by the selloff in the Nikkei. In fact, the Japanese Yen has been driven more by global events rather than domestic fundamentals as another rate hike has been priced in a long time ago.

This just shows how all the markets are interconnected and how the unveiling of the US tariffs plan on April 2 will be a global event.

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

• Kremlin on Trump saying he was ‘pissed off’ with Putin: we continue to work on building bilateral relations and on Ukraine settlement ideas.
• Kremlin says president Putin remains open to contacts with Trump.
• A Putin-Trump conversation can be arrenged as needed.
• Some American companies have shown interest in rare earth projects in Russia, but this is still at an early stage.

This follows Trump’s comments in a phone interview with NBC where he said that he was “pissed off” and would impose secondary sanctions on all
Russian oil if Russia is at fault for a failed peace deal.

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