Articles

• Uncertainty around international trade policy was pervasive
• A few more districts than previously reported declines in employment
• Several districts reported firms taking a “wait-and-see approach to employment” while others are actively “preparing for layoffs.”
• The outlook in several districts worsened considerably as economic uncertainty around tariffs rose
• Prices increased across districts, similarly to the prior report
• Businesses are rushing to purchase ahead of tariff-related price increases
• Non-auto consumer spending declined overall, though vehicle sales showed strength as buyers rushed to purchase ahead of expected tariff increases
• Both leisure and business travel were reported down, with several districts noting a decline in international visitors, particularly from Canada
• Businesses across multiple sectors reporting they’ve put major decisions on pause due to uncertainty.
• NY district: “Service sector firms reported a major pullback in planned investment.”

This report was reported from data prior to April 15.

The key line was that “the outlook in several Districts worsened considerably as economic uncertainty, particularly surrounding tariffs, rose.”

Overall this report does little to pushback on the idea that an economic slowdown is coming.

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

Eamon Javers from CNBC is reporting tha the Chinese embassy has issued a statement addressing U.S.-China trade negotiations, emphasizing the following points:

• China’s “doors are open” if the U.S. genuinely wants to engage in talks.

• If the U.S. seeks a negotiated solution, it must stop threatening and blackmailing China.

• Constructive dialogue should be based on equality, respect, and mutual benefit.

• Applying extreme pressure while asking for a deal is counterproductive and “will not work.”

Below is the full X from Javers:

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

UK Chancelor of the Exchequer Reeves is no the wires saying:

• UK will not rush trade talks with the U.S.

• UK will not relax food standards to secure a U.S. trade deal

• UK borrowing data reinforces the importance of controlling public finances

• UK announces measures to prevent future dumping of unfairly priced imports

• UK will review customs treatment of low-value imports

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

• High yield 3.995%
• WI level at the time of the auction 4.005%
• Tail -1.0 basis points vs. six-month average of 0.1 basis points
• Bid to cover 2.41X vs 6 month average of 2.40X
• Dealers 11.12% versus six-month average of 12.1%
• Direct 24.8% vs average vs six-month average of 17.7%
• Indirect (international) 64.04% vs six-month average of 70.2%

Auction Grade: B

The difference between today’s five year note auction yesterday’s two year note auction was that the tail came in at -1.0 basis points. The bid to cover was also near the average.

What was the same was that the domestic buyers increase their take dramatically while the international buyers decreased their demand.

Domestic buyers accounted for 24.8% which was well above the average of 17.7%. The international buyers meanwhile took only 64.04% much lower than the 70.2% average.

The combination left the dealers with lower than normal supply at 11.12% versus 12.1% for the average.

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

The Mexican peso and stock markets have done well this year even as the growth outlook dims. Yesterday the IMF downgraded Mexican GDP forecasts and now the World Bank sees no growth at all this year as it now sees 0% GDP growth compared to 1.5% in January.

Other LatAm changes:

• Brazil to 1.8% from 2.2%
• Argentina to 5.5% from 5.0%
• LatAm and Caribbean to 2.1% from 2.5%

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

This is an interesting note from the WSJ’s Lingling Wei who notes that Chinese Presidents nearly never pick up the phone.

Despite repeated signaling from the American president for his Chinese counterpart to call, Xi isn’t calling.

The Chinese might tell you that’s just not how China works. The only instance in recent memory when a Chinese leader initiated contact with an American leader occurred on Sept. 11, 2001, when then-President Jiang Zemin sent a telegram of condolence to George W. Bush following the terrorist attacks in the U.S. The two spoke the next day—but even then, according to China’s official account, it was the U.S. president who requested the call.

She notes that China sees this as a struggle that’s impossible to back down from and not something where Xi would consider breaking the norm. During Trump’s first term, it was always him who reached out to China and she reports that Trump complained to his aides about that.

I don’t think Trump is too proud to pick up the phone but the enthusiasm in the market

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

• Says would not be surprised if China-US tariffs went down in a mutual way
• Declines to comment on earlier WSJ story
• Tariff rates are unsustainable
• Does not have time frame for start of China talks, will have to take place at lower levels than Trump-Xi
• With India, we are very close to a tariff deal
• Tariff negotiations will not be an extended process at all
• US-Japan talks don’t have specific FX level targets
• I am expecting current tax policy to be extended and a great part of that to be permanent
• Full China-US trade deal could take 2-3 years

US stocks are giving back some gains and the bitcoin has slipped particularly badly.

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

Canada has been awash with talk of US boycotts since the start of the trade war. It’s a theme that’s consumed the Canadian election, which will take place on Monday.

What’s harder to quantify is the actual impact on spending and travel. Today, Statistics Canada released its cross-border report for February and it shows a real impact, though not as large as touted in some reports.

A viral news story last month indicated that Canadian air bookings were down 70% but this number is much more modest. That’s no surprise as Air Canada said in late March that its US booking curve was down 10% over the next six months.

The bad news is that auto and same-day travel is more indicative of real-time decisions, as air travel is often booked months in advance. It suggests we will see poor Canada-to-US travel in March and beyond.

Perhaps a caveat is that February weather was particularly harsh and that could have curbed cross-border road trips. Toronto saw 73.4 cm of snow in February 2025 – roughly double the normal amount and the Feb 13-16 period was particularly harsh. Throughout Feb 2025, Environment Canada issued numerous winter storm warnings, blizzard advisories, and extreme cold warnings in some areas. Another system on Feb 28, 2025 brought ~15 cm more snow to Ontario. Compare that to Feb 2024, which saw no major storms.

Weather alone in Feb 2025 likely caused a 5–15% reduction in cross-border trips, or around one-third of the same-day auto trip decline. Along those lines, US auto trips to Canada were also down 6.5% y/y in February with same day down 7.0% m/m despite a very strong USD/CAD in the month.

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

• Crude oil inventories +0.244M vs -0.770M estimate
• gasoline inventories -4.476M vs -1.375M estimate
• Distillates -2.353M vs -0.028M estimate
• Cushing -0.086M vs a drawdown of -0.654M last week.

The private data released late yesterday showed drawdowns in each of the major components:

The price of crude oil is currently down around one dollar at $62.42. The low price reached $61.55 after headlines that some OPEC members wanted to increase production even more at there May meeting (four June).

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

CNBC reported earlier that the White House would not cut tariffs unilaterally, but after discussion and a deal with China. A headline from the White House is now confirming that saying:

• White House would look at lowering tariffs on Chinese imports pending talks with Beijing
• Any steps would be in conjunction with China talks, not unilateral

The major US stock indices are still sharply higher but off their highest levels.

• Dow industrial average is up 908 points or 2.32% at 40098. The high price reached 40376.11.
• S&P index up 148 points or 2.81% at 5435. The high price reached 5469.69.
• NASDAQ index up 580 points or 3.55% at 16882. The high price reached 16994.82.

Technically at session highs, the NASDAQ index got close to its falling 200-hour moving average at 17013.45. The high price got within 19 points of that key moving average level. The price has not traded above its 200 hour moving average cents February 21, 2025. Getting above that moving average would increase the bullish bias. On the downside, the 38.2% retracement of the move down from the end of December all time high comes in at 16854.68. The current price is just above that level.

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

Fed’s Garparino:

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

According to sources

• Several OPEC+ members want the group to approve another accelerated oil output increase for June at meeting on May 5

The price of crude oil futures have moved lower on the headlines. The price is now down $-1.54 at $61.93. That is down around 2.5% on the day.

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