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Yesterday’s slide in 30-year yields helped to calm market nerves but the improvement stalled today after they fell as low as 4.76%. Since then, they have turned higher to touch 4.84%.

I don’t think the market will be too fussed so long as they stay below 4.90% but it’s something to keep an eye on.

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

• Prior month 2.6%
• CPI m/m +0.3% versus +0.6% expected. Prior month +1.1%
• Core CPI m/m +0.1% versus +0.7% last month
• Core CPI y/y +2.2% versus 2.7% last month
• CPI Median y/y 2.9% versus 3.0% estimate. Last month 2.9%
• CPI Trim 2.8% versus 3.0% expected Last month 2.9%
• CPI Common 2.3% versus 2.5% last month
• Full report

This is an important final data point ahead of Wednesday’s Bank of Canada rate decision. Ahead of the data, the market was pricing in a 60% chance of a hold and a 40% chance of a cut. That’s shifted to 50/50 and USD/CAD has quickly risen about 30 pips.

Macklem signalled that they were going to be more-patient in cutting rates but this data point gives them the greenlight to cut or signal that a cut will be coming in June.

The report highlights the end of the GST tax holiday on February 15 as something that moderated the drop in prices. Prices for travel-related items were a drag with air transport down 12% y/y and travel tours down 4.7%. Cell phone service prices also fell 8.8% y/y amid a price war from Canadian telcos.

Looking ahead, the Canadian carbon tax was removed on April 1 and that’s led to a sharp drop in gasoline prices that’s been compounded by the falling price of oil. That will show up in next month’s data.

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

• Prior was +0.4% (revised to +0.2%)
• Export prices m/m +0.0% vs +0.0% expected
• Prior was +0.1% (revised to +0.5%)
• Import prices y/y +0.9% vs +2.0% prior
• Export prices y/y +2.4% vs +2.1% prior

Lower prices for fuel imports more than offset higher prices for nonfuel imports in March.

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

• Prior month -20.00
• Empire manufacturing index for April from the New York Fed

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

• All necessary permits will be expedited to Nvidia.
• As they will to all companies committing to be part of the Golden Age of America.

“Nvidia commits 500 billion dollars to build AI supercomputers, plus, in the United States, exclusively. This is very big and exciting news. All necessary permits will be expedited and quickly delivered to Nvidia, as they will to all companies committing to be part of the Golden Age of America”

Nvidia is getting a bid in pre-market on Trump’s post.

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

• China’s Premiur Li: Currently, external situations have drastically changed
• What are the interest rates expectations for G8FX?
• Watch out for the first trade deals to lead the market expectations
• Eurozone February industrial production +1.1% vs +0.3% m/m expected
• Germany April ZEW survey current conditions -81.2 vs -86.8 expected
• Federal Reserve Governor Waller’s strategy for dealing with tariffs
• China calls for its airlines to halt any further Boeing jet deliveries amid trade strife
• IEA slashes world oil demand growth forecast amid trade tensions
• China says will stay committed to joining hands rather than throwing punches
• France March final CPI +0.8% vs+0.8% y/y prelim
• BofA FMS: Net 61% expect the Dollar to deprecitate in the next 12 months
• What are the main events for today?
• UK February ILO unemployment rate 4.4% vs 4.4% expected
• Germany March wholesale price index -0.2% vs +0.6% m/m expected
• Nissan set to cut Japanese production of its top-selling US model due to tariffs – report
• G7 finance ministers, central bank governors to hold meeting in the US – report
• NZD/USD eyes fifth straight day of gains, looks to come up for air
• FX option expiries for 15 April 10am New York cut
• The bond market holds calmer for the time being

It’s been another calm European session as the markets consolidate awaiting new information on trade negotiations. There was no notable news release and the peak in escalations seems to be behind us (at least for now).

Markets are now focused on trade deals and US-China developments. That has led to a mostly rangebound price action following two weeks of huge volatility.

On the data front, we got a mixed UK employment report with the unemployment rate holding steady. That didn’t change anything in terms of interest rates expectations. The soft data continues to show a bleak picture with the German ZEW plunging to the lowest level since July 2023.

That’s all expected though and mostly old news with markets showing little to no reaction to economic data at the moment given the focus on tariffs and trade negotiations.

In the American session, we get the Canadian CPI report ahead of tomorrow’s BoC rate decision. Inflation has been
moving higher recently after the aggressive BoC easing, and the tariffs are
expected to keep inflation higher while weighing on growth. The market sees 44
bps of easing by year-end with a 61% probability that the central bank will
hold rates unchanged tomorrow.

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

• Currently, external situations have drastically changed.
• Urges for Chinese foreign trade companies to diversify markets.
• Urges companies to strive to stabilise foreign trade.
• There is relatively big room for China’s property market development.
• Will make greater efforts in stabilising employment, people’s income.
• Will calmly deal with difficulties and challenges from external shocks.
• Will make greater effort to boost consumption, expand domestic demand.

There’s nothing here of interest to markets other than the usual pledge of boosting consumption and domestic demand.

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

The news media are reporting that JD Vance said that “the US is likely to seal an economic agreement with the UK that benefits both nations. He also added that with the UK, they have a much more reciprocal relationship than they have with Germany for example”.

So, it’s logical to seal a deal with your closest “friends” first. As a reminder, the US imposed a 10% reciprocal tariff on UK and of course the 25% levies on autos, steel and aluminium that Trump slapped on everyone.

We have also an Indian trade official saying that India has decided to go for a path of trade liberalisation with the US. It will be 90 hectic days for the US to strike all the promised deals. Anyway, the point is not about the news, but about the expectations that the market could derive from the first trade deals.

Markets move on future expectations and it doesn’t matter if it’s right or wrong, it’s always in flux and adjusts to new information. The first trade deals could give the markets a rough benchmark on future trade deals and on the likely tariff rates. The key number is 10%. This is what the markets will want to see on average to celebrate easing in trade wars and recessionary fears.

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

• Prior +0.8%; revised to +0.6%

That’s a stronger reading than expected with the jump largely coming from a rise in output for capital goods (+0.8%) and non-durable consumer goods (+2.8%). There was also an increase in production for intermediate goods (+0.3%), offset slightly by declines in energy production (-0.2%) and production for durable consumer goods (-0.3%).

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

The post Ex-Dividend 16/4/2025 first appeared on IC Markets | Official Blog.

• Prior -87.6

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

Yesterday, Federal Reserve Board Governor Christopher Waller delivered a speech on the economic
outlook at the Certified Financial Analysts Society of St.Louis. Waller has been a key Fed governor because he’s been a “leading indicator” for changes and signals in Fed’s policy. He was the first to talk about QT back in 2021 and the first to signal rate cuts back in 2023.

He’s been right more often than not and the markets have always listened to his comments and reacted accordingly. We saw a reaction to one of his comments yesterday as well. The key line was that in case of a recession, Waller would favour cutting the policy rate sooner and to a greater extent than previously thought.

In his speech, he summarised the current economic outlook and provided two possible scenarios under which he would react in different ways. Long story short, he said that the economy was doing great before April 2 despite some weakening in consumer and business surveys due to uncertainty around tariffs.

Growth was solid even if it slowed a bit, the economy was at full employment and disinflation was back on track after a couple of disappointing months. Then came April 2 and everything changed. As of December 2024, the effective average trade-weighted tariffs for all imports into the United States was under 3%. Earlier in the year, the targeted tariffs brought that level to 10%. But the April 2 tariffs increased the level to 25% or more. A level that the US has not experienced for at least a century.

Scenario #1 – “Large tariffs” (25% on average or more)

Under this scenario, Waller expects inflation to peak around 4-5% and growth to slow down meaningfully. If market-based inflation expectations remain anchored, the weaker demand will put downward pressure on inflation eventually. The unemployment rate could rise to 5% by next year. Given that he expects the effect on inflation to be temporary, he would favour cutting rates sooner and to a greater extent than previously thought. Those would be “bad news” cuts.

Scenario #2 – “Smaller tariffs” (10% on average)

Under this scenario, Waller expects the effects on the economy to be much smaller. Inflation would likely peak around 3% and inflation expectations would remain anchored. He also expects that households and businesses would continue to spend and hire during the trade negotiations that lead to substantially reduced tariffs and possibly remove barriers to US exporters over time. With the threat of a sharp slowdown or recession diminished, the pressure to reduce rates would also diminish. In such a scenario, the Fed will likely cut in the latter half of this year and those would be “good news” cuts.

To sum up

The scenario #1 is bad news and would see the Fed cutting rates to combat a possible recession, while scenario #2 would be good news and would see the Fed still cutting rates on inflation progress but less aggressively than scenario #1.

The problem with the first scenario is that it’s based on the thinking that inflation expectations would remain anchored. I think we are in a different context and the risks for stagflation would rise meaningfully. Hope he’s right and hope Trump would go for scenario #2.

Potential trades

On scenario #1, I would expect the stock market to do great as collectively lower trade barriers would be positive for global growth and the ease in recessionary/high tariffs fears would boost the risk sentiment. Commodities should also do nicely. On a more short-term basis, I would expect the USD to rally and gold to selloff as rate cuts get priced out and stagflationary fears dissipate. Bonds will likely bottom and start a slow upward trend.

On scenario #2, I would expect gold to skyrocket much like we saw in the late 70s on risks of stagflation given the Fed’s preference to cut aggressively despite rising inflation due to a supply shock. The stock market could see a short-term relief rally followed by another selloff. Commodities should be supported amid the Fed easing. Long term bonds will likely remain under pressure.

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