Articles

The USD has been
supported recently amid the ongoing de-escalation in trade wars. This has most likely to
do with positioning rather than fundamentals. In fact, the short dollar trade got
very overstretched, so positive news on the tariffs front could provide a pullback on some unwinding of those trades.
In the medium term, the US Dollar should keep on depreciating as the path of
least resistance for the Fed remains to cut rates, but in the short-term it could provide a decent pullback.

On the daily chart, we can see that GBPUSD reached the cycle highs before consolidating as the bullish momentum waned on more positive tariff news. From a risk management perspective, the buyers will have a better risk to reward setup around the 1.32 handle or better yet, at the major trendline. The sellers, on the other hand, will likely keep on piling in around these levels to position for a correction into the major trendline and a break below the 1.32 handle should see the momentum rising as the sellers will likely increase the bearish bets.

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

Japan’s economy minister, Ryosei Akazawa, is the man in charge of negotiations with the US on tariffs. And he’s out saying that their stance has not changed whatsoever, in that they are still demanding a full removal of tariffs. He also adds that they aren’t considering to sacrifice agricultural products for the sake of autos in the negotiations.

As things stand, it is quite clear that there’s no significant progress from the initial talks. From before: Tedious US-Japan trade talks highlight difficulty for any deals

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

• Prior -41

That’s the highest reading since October last year as UK retail sales balance bounces back in April. Is it better weather conditions that is helping, similar to what we saw in March here? The expectations balance for May isn’t as bright though, falling to -33 and that is down from -30 previously.

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

It’s been a rough day last Wednesday for the crude oil market as a couple of bearish news weighed on prices. The first catalyst came with the Kazakhstan Energy Minister saying that National interests take priority over OPEC+ interests on output levels. That weighed on the market on higher supply expectations.

Later in the day, we got the news that several OPEC+ members wanted the group to approve another accelerated oil output increase for June at the meeting on May 5. It’s been baffling to see OPEC+ accelerating production hikes amid slowing growth due to the trade wars.

Several factors have been cited for such decisions and among them the most plausible ones cited by CNBC are that the group is bullish on oil demand later in the year and a desire by the OPEC leadership to send a warning signal to Kazakhstan,
Iraq, and even Russia about the cost of continued overproduction.

In the bigger picture, I think the trade negotiations are what really matters for the market and that’s likely what has been keeping the downside limited.

On the daily chart, we can see that crude oil is consolidating around the key 62.00-64.00 resistance zone. This is where the sellers are piling in with a defined risk above the resistance to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to extend the rally into the major trendline around the 68.00 handle.

On the 1 hour chart, we can see that we have a minor support around the 61.75 level. If the price gets there, we can expect the buyers to step in with a defined risk below the level to position for a rally into the 68.00 handle. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the 59.00 handle next.

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

Rate cuts by year-end

• Fed: 86 bps (90% probability of no change at the upcoming meeting)
• ECB: 60 bps (79% probability of rate cut at the upcoming meeting)
• BoE: 88 bps (97% probability of rate cut at the upcoming meeting)
• BoC: 43 bps (61% probability of no change at the upcoming meeting)
• RBA: 121 bps (96% probability of rate cut at the upcoming meeting)
• RBNZ: 82 bps (94% probability of rate cut at the upcoming meeting)
• SNB: 28 bps (74% probability of rate cut at the upcoming meeting)

Rate hikes by year-end

• BoJ: 17 bps (97% probability of no change at the upcoming meeting)

There hasn’t been much change since Friday as the markets continue to wait for more concrete info on the trade negotiations front. The most likely countries for the first deal (or at least an agreement of understanding) include India, South Korea and Japan. All three of them have reciprocal tariffs above the 20% rate, which got lowered to 10% for the 90-days pause.

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

It’s been a nice week for the S&P 500 as the market rallied by more than 7% on more de-escalation news. The underlying expectations continue to point towards further de-escalation and eventually deals, which is a positive for growth and therefore the stock market.

We will likely remain in a “buy the dip” environment until the first deal or at least more concrete details for the first deal. The market’s expectations will be based on that first deal. If the details will be good and the reciprocal tariff rate is around 10% or lower, the market will likely take it as positive and we should continue towards all-time highs.

Conversely, if things look bad and the average tariff rate is above 10%, we could see a disappointment and get back to pricing slower growth which should weigh on the stock market.

On the daily chart, we can see that the price pulled all the way back to the key trendline around the 5550 level. This is where we can expect the sellers to step in with a defined risk above the trendline to position for a drop back into the 4800 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 5800 level next.

On the 1 hour chart, we can see that we have a minor upward trendline defining the bullish momentum on this timeframe. The buyers will likely continue to lean on the trendline to keep pushing into new highs, while the sellers will look for a break lower to target the 5479 level first and, upon a further break to the downside, the 5357 level next. The buyers, on the other hand, will look to buy the dip at those levels.

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

• Domestic sight deposits CHF 442.6 bn vs CHF 439.7 bn prior

That’s another slight rise in overall sight deposits in the past week, but nothing too outstanding to suggest the SNB intervening with force in the market. As an aside, the Swiss central bank did also just announce that it is cutting the limit for banks to get full interest on reserves by lowering the threshold factor for remunerating sight deposits to 18 – down from 20 previously. That will go into effect starting from 1 June. The previous adjustment was back in December last year.

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

When it comes to reading Trump and his words, we all know that there’s always going to be two sides to the coin. He loves to make a show of things and be flamboyant. But the truth of the matter is more often than not what he will not portray. It’s all about scoring wins and claiming victory when it comes to the optics. And with his comments regarding China last week, there was that familiar feeling.

Here are some key phrases that he put out in interviews and responses when it came to the trade war with China:

“We’re going to be very nice. They’re (China) going to be very nice. And we’ll see what happens. But ultimately, they have to make a deal because otherwise they’re not going to be able to deal in the US.”

“We just destroyed China who is taking us for a ride and it’s not gonna happen. We’re going to be very good to China. I have a great relationship with president Xi. I think we’re gonna live together very happily and ideally work together. I think it’s going to work out very well. But no, it’s not going to be 145% (tariffs). They will not be anywhere near that number.”

“There was a meeting this morning with China.” (no further details/context)

“Yep. He’s (Xi) called. And I don’t think that’s a sign of weakness on his behalf.”

“We all want to make deals. But I am this giant store. It’s a giant, beautiful store, and everybody wants to go shopping there. And on behalf of the American people, I own the store, and I set the prices, and I’ll say if you want to shop here, this is what you have to pay.”

The final two responses were his answers to the questions “when did he call you?” and “what did he say?”. Two questions. Zero answers. I think we all can extrapolate from that. And China has only gone on to rebuff the underlying situation, even today here.

But reading between the lines, it felt that Trump was trying to work an angle to once again sell his victory lap.

At current tariff levels, US-China trade has been stifled for a number of weeks now. And eventually, something’s gotta give.

The commentary push by Trump above felt like he was going to try and push for a change in tariff levels but yet spin it into a victory. And he still might do that in the coming days/weeks.

But for the time being, China is not going to let him have that satisfaction in getting away with trying to falsely claim a win in this tariffs war. They’re shutting the door hard in refuting that Trump and Xi had spoken and that there were any meetings between the two camps.

That is causing not just markets, but the world, to see Trump’s remarks as misleading and would pour cold water on any form of victory he is trying to claim – if he does try to spin it that way.

As the tariffs war rages on, there’s also a psychological element to it and that is perhaps what we’re seeing above. If neither side can pull off a winning narrative in the short-term, the playbook looks to be working towards tariff exclusions/exemptions. But there’s already a signal that tariffs could be eased soon enough.

And if that happens, expect Trump to boast about scoring yet another win. That even if China continues to keep their door shut.

And as a reminder, a reduction to 50-60% tariffs doesn’t mean that global trade and the world economy is going to find much to be optimistic about in the coming months. There will no doubt be some reprieve for risk trades but the economic pain will be the second wave to think about moving forward.

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

Global Markets:

•  Asian Stock Markets : Nikkei up 0.35%, Shanghai Composite down 0.19%, Hang Seng down 0.02% ASX up 0.36%
• Commodities : Gold at $3292.35 (-0.19%), Silver at $32.8 (-0.49%), Brent Oil at $65.98 (0.15%), WTI Oil at $63.30 (0.19%)
• Rates : US 10-year yield at 4.267, UK 10-year yield at 4.5320, Germany 10-year yield at 2.4921

News & Data:

• (CAD) Core Retail Sales m/m  0.5%  to -0.1%  expected
• (CAD) Retail Sales m/m  -0.4%  to -0.4%  expected

Markets Update:

Asia-Pacific markets showed mixed movements on Monday as investors evaluated China’s latest economic support measures and ongoing trade discussions between the U.S. and regional countries.

China’s finance minister, Lan Fo’an, announced that Beijing would implement more proactive macroeconomic policies to meet its annual growth targets and contribute to global economic stability, according to a translated statement from the ministry’s website.

In the markets, Mainland China’s CSI 300 index remained flat toward the session’s end, while Hong Kong’s Hang Seng Index rose 0.36% amid volatile trading. India’s Nifty 50 climbed 1.18%, and the BSE Sensex gained 1.08%. Japan’s Nikkei 225 added 0.38% to close at 35,839.99, while the broader Topix index advanced 0.86% to 2,650.61.

In South Korea, the Kospi inched up 0.1% to 2,548.86, but the small-cap Kosdaq declined 1.41% to 719.41. Australia’s S&P/ASX 200 also ended higher, up 0.36% at 7,997.10.

Investors continue to monitor U.S.-Asia trade relations after reports suggested that President Donald Trump may resume imposing “reciprocal tariffs,” signaling a tougher stance in upcoming negotiations.

Meanwhile, U.S. futures slightly dipped ahead of a heavy earnings week. Despite this, Wall Street closed last Friday with gains, marking two positive weeks out of three. The S&P 500 rose 0.74% to 5,525.21, the Nasdaq Composite gained 1.26% to 17,282.94, and the Dow Jones Industrial Average edged up by 20 points, or 0.05%, to finish at 40,113.50.

Upcoming Events: 

• 12:30 PM GMT – CAD Federal Election

The post Monday 28th April 2025: Asia-Pacific Markets Mixed as Investors Weigh China’s Stimulus Measures and U.S. Trade Talks first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 28 April 2025

What happened in the Asia session?

Asian stock markets were mixed on Monday, as Japanese shares rose, boosted by Toyota’s surge on a potential buyout of its supplier, while Chinese stocks were subdued amidst ongoing uncertainties surrounding the U.S.-China trade negotiations. The outlook remained murky with U.S. Treasury Secretary Scott Bessent contradicted President Donald Trump’s previous statements on Sunday, saying he was unaware of any ongoing tariff talks with China and uncertain whether Trump had recently communicated with Chinese President Xi Jinping. In addition, Beijing had also denied that any trade talks were in progress – the conflicting signals kept investors uncertain.

What does it mean for the Europe & US sessions?

Canadian voters head to the polls to elect members of the House of Commons to the 45th Canadian Parliament – this will be the first election to use a new 343-seat electoral map based on the 2021 Canadian census. Mark Carney, incumbent Prime Minister and the leader of the Liberal party, will be looking to secure another term for his party. Traders should brace themselves for higher volatility in the Loonie, especially if there is a major upset for the incumbents.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

Dogged by uncertainty over trade talks between the U.S. and China clouding the outlook for global growth, investors and traders are treading cautiously – any announcements out of the White House likely to function as the latest catalyst for financial markets. Meanwhile, demand for the greenback rekindled last week as the DXY climbed above 99 and the upward momentum looks to have spilled over on the first trading day of this week.

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

Weak Bullish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

Spot prices for gold recorded a new high of $3,500.02/oz last Tuesday before tumbling 5.2% to close at $3,318.62/oz. This precious metal fell under $3,300 as Asian markets came online, possibly fuelled by a bout of profit-taking after a strong run-up since mid-April.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Australia’s financial markets and banks will resume operation after a three-day weekend following the Anzac Day holiday on Friday. The Aussie rallied strongly last week, coming within a whisker of 0.6450 before running out of steam. Demand for this currency pair appeared to wane during Monday’s Asia session, as it edged toward 0.6350.

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 Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

New Zealand’s financial markets and banks will resume operation after a three-day weekend following the Anzac Day holiday on Friday. The Kiwi briefly surged past the threshold of 0.6000 last Tuesday before settling around 0.5960 last Friday. Demand for this currency looks to be tapering off slightly as it dipped under 0.5950 during Monday’s Asia session.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 25 basis points bringing it down to 3.50% on 9 April, marking the fifth consecutive rate cut.
• The Committee assessed that annual consumer price inflation remains near the midpoint of the MPC’s 1 to 3% target band while firms’ inflation expectations and core inflation are consistent with inflation remaining at target over the medium term.
• Economic activity has evolved largely as expected since the February Monetary Policy Statement; higher-than-expected export prices and a lower exchange rate have supported primary sector incomes and overall economic growth.
• Although monetary restraint had been removed at pace, household spending and residential investment have remained weak.
• The recently announced increases in global trade barriers weaken the outlook for global economic activity. On balance, these developments create downside risks to the outlook for economic activity and inflation.
• The Committee noted that the increase in tariffs will take time to work through the global economy, but the direct price increases for economies imposing tariffs and the dampening impact of increased economic uncertainty on global demand will occur relatively quickly.
• With CPI inflation close to the mid-point of the target range, significant spare capacity in the economy, and a weaker activity outlook stemming from global trade policy, the Committee agreed that a further reduction in the OCR was appropriate.
• Meanwhile, future policy decisions will be determined by the outlook for inflationary pressure over the medium term.
• The next meeting is on 28 May 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

Showa Day (Bank Holiday)

What can we expect from JPY today?

Japanese banks will be closed in observance of Showa Day so the yen could face lower liquidity and irregular volatility during the Asia session. Meanwhile, demand for safe-haven currencies could remain elevated – USD/JPY was sliding toward 143.50 at the beginning of this 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 1 May 2025.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

After rallying strongly last Monday to come within a whisker of 1.1600, the Euro ran out of steam as it tumbled 1.9% to close at 1.1359 on Friday. Overhead pressures are building for this currency pair as traders look to be engaging in profit-taking following a robust surge over the past four weeks.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17 April to mark the sixth 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 2.40%, 2.65% and 2.25% respectively.
• The disinflation process is well on track with both headline and core inflation declining in March while services inflation has also eased markedly over recent months. Most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis.
• Wage growth is moderating, and profits are partially buffering the impact of still elevated wage growth on inflation. The euro area economy has been building up some resilience against global shocks, but the outlook for growth has deteriorated owing to rising trade tensions.
• Increased uncertainty is likely to reduce confidence among households and firms, and the adverse and volatile market response to the trade tensions is likely to have a tightening impact on financing conditions. These factors may further weigh on the economic outlook for the euro area.
• 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 Governing Council is determined to ensure that inflation stabilises sustainably at its 2% medium-term target. Especially in current conditions of exceptional uncertainty, it will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.
• In particular, the Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
• The next meeting is on 5 June 2025.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for safe-haven currencies such as the Swiss franc remained elevated as UDS/CHF edged toward 0.8250 at the beginning of the Asia session. With uncertainty over trade talks between the U.S. and China clouding the economic outlook, investors remain cautious.

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

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable gapped lower at today’s open, dipping under 1.3300 before filling this void. However, demand for this currency pair appears to be waning as it edged lower as Asian markets came online.

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 Bearish

The Canadian Dollar (CAD)

Key news events today

Federal Election (All Day)

What can we expect from CAD today?

Canadian voters head to the polls to elect members of the House of Commons to the 45th Canadian Parliament – this will be the first election to use a new 343-seat electoral map based on the 2021 Canadian census. Mark Carney, incumbent Prime Minister and the leader of the Liberal party, will be looking to secure another term for his party. Traders should brace themselves for higher volatility in the Loonie, especially if there is a major upset for the incumbents.

Central Bank Notes:

• The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70% – marking the first pause after seven consecutive meetings where rates were reduced.
• The major shift in direction of U.S. trade policy and the unpredictability of tariffs have increased uncertainty, diminished prospects for economic growth, and raised inflation expectations.
• Pervasive uncertainty makes it unusually challenging to project GDP growth and inflation in Canada and globally – the April Monetary Policy Report (MPR) presents two scenarios that explore different paths for US trade policy.
• In the first scenario, uncertainty is high but tariffs are limited in scope – Canadian growth weakens temporarily and inflation remains around the 2% target. In the second scenario, a protracted trade war causes Canada’s economy to fall into recession this year and inflation rises temporarily above 3% next year.
• Global economic growth was solid in late 2024 and inflation has been easing towards central bank targets. However, tariffs and uncertainty have weakened the outlook. In the U.S., the economy is showing signs of slowing amid rising policy uncertainty and rapidly deteriorating sentiment, while inflation expectations have risen. In the Euro Area, growth has been modest in early 2025, with continued weakness in the manufacturing sector. China’s economy was strong at the end of 2024 but more recent data shows it slowing modestly.
• In Canada, the economy is slowing as tariff announcements and uncertainty pull down consumer and business confidence. Consumption, residential investment and business spending all look to have weakened in the first quarter. Trade tensions are also disrupting recovery in the labour market. Employment declined in March and businesses are reporting plans to slow their hiring. Wage growth continues to show signs of moderation.
• The Governing Council will continue to 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 while proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy.
• Monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war and the Governing Council will focus on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval by supporting economic growth while ensuring that inflation remains well-controlled.
• The next meeting is on 4 June 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Headwinds remain firmly in place for crude oil, dogged by uncertainty over trade talks between the U.S. and China clouding the outlook for global growth and fuel demand, while the prospect of OPEC+ raising its supply cast more gloom. WTI gapped higher to open at $63.50 per barrel, initially rising toward the $64 mark before reversing to decline rapidly – a drop below $63 would come as no surprise.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Europe Fundamental Forecast | 28 April 2025 first appeared on IC Markets | Official Blog.

• President Xi and Trump did not have call recently.
• US and China have not conducted negotiations or consultations on tariffs.

This is the same old denying from the Chinese to comments from Trump about ongoing talks on tariffs. Nothing new here.

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

• Eurostoxx +0.5%
• Germany DAX +0.4%
• France CAC 40 +0.5%
• UK FTSE +0.4%
• Spain IBEX +0.6%
• Italy FTSE MIB +0.6%

US futures have also pared losses somewhat, with S&P 500 futures just down by 0.1% currently. It’s all still early in the day and even more so on the week. Trump’s tariffs and trade headlines will continue to be the main thing to watch out for, but there’s also month-end flows and key tech earnings (Microsoft, Meta, Apple, Amazon) to be wary about on the week.

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