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As is usual for a Monday morning, market liquidity is very thin until it improves as more Asian centres come online … prices are liable to swing around, so take care out there.

Indicative rates, a little change from late Friday:

• EUR/USD 1.1294
• USD/JPY 144.08 …..
• GBP/USD 1.3066
• USD/CHF 0.8216
• USD/CAD 1.3867
• AUD/USD 0.6312
• NZD/USD 0.5823

I’ll be back with weekend news flow – plenty to chew on!

A waste of Monday coffee – gonna need all the caffeine we can get

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

From an interview on ABC:

• Electronics products will be part of upcoming sectoral tariffs
• Pharma tariffs also coming in the next month or two
• US has had ‘soft entrees’ through intermediaries with China on tariffs
• Not concerned about the US dollar

There were some real hopes building for a strong open in tech stocks based on the earlier tariff reversal but now we’re reversing the reversal. Of course, we could still have 5-6 more changes of heart in the interim.

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

The White House’s Stephen Miller — who is prickly at the best of times — is out with a tweet noting that 20% fentanyl tariffs still apply to China.

He wrote this in response to a Washington Post article:

Washington Post: maybe your reporters should try reading before posting. These products are subject to the tariff under the original IEEPA on China of 20 percent.

That’s a bit rich from a White House that’s changing the tariff regime daily.

In any case, it might curb some of the weekend enthusiasm. A White House spokesman also said that a Section 232 investigation on semiconductors is coming soon so it’s only a matter of time until more tariffs come for semiconductors.

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

Weekend info on what appears to be a reversal on tariffs from Trump, an easing on tech goods:

• Smartphones and computers are among the tech products exempted from Trump’s 145% tariffs on Chinese goods.

• The exemptions were outlined in new guidance from US Customs, issued late Friday.

• Other exempted electronic items include:

  • Semiconductors

  • Solar cells

  • Flat panel TV displays

  • Flash drives

  • Memory cards

Its not clear if such items might still face future tariffs, the rates are expected to be much lower than 145%.

The move is seen as a win for tech companies, particularly Apple, which manufactures most of its products in China.

This will be a tail wind for asset markets.

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

The market is now fully priced for an ECB rate cut on Thursday and Deutsche Bank economists have got on board.

• The economic hit from reciprocal tariffs, uncertainty, and tighter financial conditions likely exceeds what the ECB was expecting
• Previous ECB assumptions that tariffs would boost inflation have been challenged
• Recent developments including higher EUR, lower oil prices, and greater risk of trade diversion are skewing inflation risks to the downside

Deutsche Bank believes the ECB will maintain a “meaningfully less restrictive” stance description despite the upcoming rate cut. They note that after 150bp of cuts, policy rates are getting closer to neutral, and combined with the view that inflation is returning to target, this has “an implicit dovish leaning.”

The bank has provisionally revised its GDP forecast down to +0.5% for 2025 (from +0.8% previously), though they maintain their 2026 forecast at +1.0%. They’ve also adjusted their inflation outlook, now seeing headline HICP averaging 2.0% in 2025 (from 2.1%) and 1.7% in 2026 (from 1.9%).

Looking ahead, Deutsche Bank maintains its terminal rate call of 1.5% by year-end 2025, with further cuts expected in June, September and December. They note that while the pause in higher US reciprocal tariffs has “essentially shut down any possibility of a 50bp rate cut in April,” the overall direction remains clear.

“This is a complex and dynamic shock,” Deutsche Bank analysts write, indicating the ECB will need to remain nimble as conditions evolve.

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

• US stocks close at higher with major indices having their best week in 2024
• Gold has its best week since since the March 2023
• Crude oil futures settled $61.50. Key target near $63.64 held resistance this week
• Nasdaq held 200 week MA this week. Back above the 100 week MA
• Collins: Fed ‘absolutely’ ready to help stabilize markets if needed
• Trump said to have assured CEOs that a policy pivot on tariffs is underway
• Trump has made it clear he is open to a deal with China – White House
• Don’t drill baby: Baker Hughes sees US park 9 rigs
• European equity close: A stumble to the finish line in a volatile week
• Fed’s Williams: Tariffs will boost inflation to between 3.5% to 4% this year
• More from Musalem: I expect growth this year to be lower than trend
• US 30-year yields are on track for their largest weekly rise since 1982
• UMich April prelim consumer sentiment 50.8 vs 54.5 expected
• Hours before the latest China tariffs the Trump admin told them to request a Xi-Trump call
• Something that should worry US policymakers: The reaction function is now to sell bonds
• Fed’s Collins at this point the expectation is the Fed will need to hold for longer
• Fed’s Collins: We came into first quarter with solid economic conditions
• US March PPI +2.7% vs +3.3% expected
• The USD is lower following China’s increase in tariffs of US goods to 125%
• ForexLive European FX news wrap: Dollar woes continue, China hits back on tariffs
• Fed’s Kashkari: Our job is to make sure inflation expectations don’t rise

The U.S. dollar ended the day sharply lower, led by a -1.50% drop versus the New Zealand dollar, followed by a -1.35% decline against the euro, and a -1.03% fall versus the Australian dollar. The dollar’s weakest performance was against the yen, falling a relatively modest -0.60%.

The move lower was supported by a string of softer inflation readings, with today’s PPI Final Demand declining -0.4% m/m vs. +0.2% expected, while core PPI (ex-food and energy) fell -0.1% vs. +0.3% forecast. This followed tamer CPI data released yesterday, reinforcing expectations for easing price pressures.

Economists now estimate that Core PCE, the Fed’s preferred inflation gauge, likely rose just 0.1% m/m in March, down from 0.4% in February. This would slow the annual Core PCE rate to 2.6%, from 2.8% previously — a move driven by falling prices for airfares, hotel stays, and used vehicles.

However, headwinds remain. Recent tariff increases on Chinese imports are expected to reignite inflationary pressure in the months ahead, potentially complicating the Fed’s path forward.

Yields soar despite soft inflation

Despite the disinflation narrative, U.S. Treasury yields surged, reflecting lingering inflation concerns and perhaps positioning ahead of next week’s data:

• Daily changes:

  • 2-year: 3.962% (+11.7 bps)

  • 5-year: 4.161% (+12.4 bps)

  • 10-year: 4.493% (+10.2 bps)

  • 30-year: 4.875% (+2.7 bps)

• Weekly gains:

  • 2-year: +37.0 bps

  • 5-year: +45.4 bps

  • 10-year: +49.5 bps

  • 30-year: +46.2 bps

Stocks bounce back from deep lows

Despite rising yields, U.S. equities posted strong weekly gains, rebounding from sharp drawdowns earlier in the week. The S&P 500 had fallen as much as -21.35%, while the Nasdaq was down -26.83% at its lowest.

Mid-week, however, saw oversized rebounds:

• NASDAQ: +12.16% on Wednesday

• S&P 500: +9.52%

That rally helped the Dow (+5.07%) and S&P 500 (+5.85%) notch their best weekly performance since October 30, 2023, while the NASDAQ’s +8.10% gain marked its strongest week since November 7, 2022.

Fed’s Collins reassures, but remains cautious. Fed’s Williams sees inflation rising to 3.5% to 4%

Fed Governor Susan Collins added to the positive sentiment, stating the Fed is “absolutely” ready to stabilize markets if needed, reinforcing its role as a backstop during disorderly moves. However, she noted that the bar remains “pretty high” for preemptive rate cuts, signaling a continued cautious stance on policy easing.

She also addressed the recent U.S. dollar weakness, suggesting it may reflect expectations of slower economic growth, and added that it’s still too soon to assess whether Trump’s trade policies will disrupt capital flow dynamics.

New York Fed President John Williams warned that new tariffs could lift inflation to between 3.5% and 4% this year, adding significant uncertainty to the outlook. He noted the economy began the year on solid footing but expects growth to slow to just 1% and unemployment to rise to 4.5%–5%. Williams emphasized the importance of keeping inflation expectations anchored and said a modestly restrictive monetary policy remains appropriate for now. His remarks contrast with market expectations for rate cuts, highlighting the Fed’s cautious stance in the face of rising trade-related risks.

Monday:
The week begins with China releasing its March Trade Balance data, offering a key read on global demand and export dynamics as trade tensions and tariff impacts remain in focus.

Tuesday:
A busy day featuring the RBA Minutes, which may shed light on the central bank’s inflation and rate path outlook. The UK Jobs Report (covering February and March) will be closely watched for labor market trends. In the eurozone, attention turns to Industrial Production data and the German ZEW Survey for April. Canada rounds out the day with its March CPI report, which could influence expectations for the Bank of Canada.

Wednesday:
Markets will digest a flurry of top-tier releases. The Bank of Canada (BoC) is set to announce its latest policy decision. China will publish its Q1 GDP and March activity data, offering insight into the post-tariff economic landscape. The UK and Eurozone CPI reports are due, including the eurozone’s final CPI print for March. In the U.S., March Retail Sales take center stage. Lastly, New Zealand’s Q1 CPI will be released, relevant for RBNZ rate expectations.

Thursday:
Central bank decisions dominate the day, with both the European Central Bank (ECB) and Turkey’s CBRT scheduled to announce policy updates. Japan will publish its March Trade Balance, while Australia will release its March Jobs Report, offering fresh perspective on labor and inflation pressures down under.

Friday:
Markets in several regions will observe Good Friday, limiting liquidity. However, Japan will release its March CPI, which could still influence JPY direction into the weekend.

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

The major US stock indices are closing solidly higher and with the best gains the 2024.

The final numbers are showing:

• Dow industrial average rose 619.05 points or 1.56% at 40,212.71 points
• S&P index rose 95.31 points or 1.81% at 5363.36.
• NASDAQ index rose 337.14 points or 2.06% at 16724.45.
• The small-cap Russell 2000 gains 28.80 points or 1.57% at 1860.2047.

For the trading week:

• Dow industrial average rose 4.95%. It’s best week since a gain of 5.07% on October 30, 2023.
• S&P index rose 5.7%. That was his best week since October 30th 2023 when the index rose 5.85%
• NASDAQ index rose 7.29%. It’s best week since November 7, 2022 when the index rose 8.10%
• Russell 2000 rose 1.815%. That was it best week since 3.95% on January 13, 2025

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

Monday

Before Open:

• Goldman Sachs

• M&T Bank

After Close:

• FirstBank

• Pinnacle Financial Partners

Tuesday

Before Open:

• Bank of America

• Citi

• Johnson & Johnson

• PNC

• Albertsons

• Ericsson

After Close:

• United Airlines

• Interactive Brokers

• J.B. Hunt

Wednesday

Before Open:

• ASML

• US Bancorp

• Abbott

• Progressive insurance

• Travelers

• Prologis

After Close:

• Alcoa

• CSX

• Kinder Morgan

Thursday

Before Open:

• TSMC (Taiwan Semi Conductor)

• UnitedHealth Group

• Huntington Bank

• American Express

After Close:

• Netflix

When will the earnings for the Magnificent 7 be announced?

• Tesla (TSLA): April 22, 2025

• Apple (AAPL): May 1, 2025

• Alphabet (GOOGL): April 29, 2025

• Microsoft (MSFT): April 30, 2025

• Amazon (AMZN): April 24, 2025

• Meta (META): April 30, 2025

• Nvidia (NVDA): May 28, 2025

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

I’m increasingly open to the idea that bitcoin could disconnect from the risk trade in light of risks around the US dollar and turmoil in the world.

There is a strong correlation between bitcoin and the Nasdaq that’s been established in the last two years but it’s not iron clad. At the moment there is an urge in the market to find dollar alternatives and that’s led to big bids in gold, the yen and Swiss franc. I can envision many scenarios where that extends to bitcoin and we could be seeing the start of that. He held up better in April than stocks and that’s shown it can pass the first test.

An asset like bitcoin tends to be a chameleon and a momentum trade. If it can get above $86K (or the April high of $88.6K), that momentum could really kick in. I think it’s too early to make that call but I’m watching carefully.

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

Charlie Gasparino from Fox Business is out with an interesting tweet:

CEOs are speaking with the White House on the trade war; one told me that Trump has an open door policy and is listening to their concerns on the tariff impact on the economy and markets. The overwhelming fear expressed both to Trump and his aides is that the tariff war needs to end ASAP because it will stoke stagflation if it persists, a 5% yield on the 10-year bond, which carries a whole set of risks . Also, that Trump needs to quickly pivot to his growth agenda. The White House is said to have assured CEOs the pivot is happening and deals are being done. Also that there is plenty of room to negotiate with China. Story developing

That’s a good sign but I still want to know if 10% is the floor rate for tariffs because I don’t think that’s going to be good enough.

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

This is a positive comment as the US tries to find a way to bring down tensions with China. For now, it doesn’t look like China is going to be the one dialing but this whole thing is incredibly stupid.

• The Treasury Secretary is keeping a very close eye on the bond market
• More than 15 trade offers already on the table

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

• Oil rigs -9 to 480
• Gas rigs +1 to 96

With oil falling into the 50s this week, I think it cements that US oil production will fall this year. The US has already drawn down its drilled-but-uncompleted wells and Tier 1 inventory is scarce. The economics of new wells make it very tough to justify capital spending at even $65/barrel, add in the uncertainty and steel tariffs and oil companies are going to pull back on spending.

WTI crude is up $0.85 cents today is risk assets bounce, trading at $60.90.

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