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The S&P 500 continues to fade negative news and rally strongly on positive developments. This is a signal that the market is looking forward to more de-escalation and eventually trade deals as Trump continues to cave in.

We bottomed on April 9 when we reached the peak in escalation and Trump paused the tariffs for 90 days. From there on, it was starting to look clear that the downside became limited, and the upside was the most likely path forward.

There’s too much at stake and Trump’s actions showed clearly that there is a pain threshold. The markets can be a great constraint for policymakers which eventually have to reverse or change course to fix the damage. Of course, the markets need to find that pain threshold before pricing in the eventual change.

On the daily chart, we can see that the S&P 500 bottomed right near the key support zone around the 4800 level which had the confluence of a major trendline and the 2022 high. The price is now coming back to retest the key resistance zone around the 5510 level where we have the downward trendline for confluence. That’s where we can expect the sellers to step in again to position for a drop back into the support. The buyers, on the other hand, will look for a break higher to invalidate the bearish setup and increase the bullish bets into a new all-time high.

On the 1 hour chart, we can see that we bounced right around the recent low at 5145 and eventually rallied on the positive Treasury Secretary Bessent’s comments that unfortunately were delivered at a private JP Morgan client event. Anyway, the positive Trump’s comments late yesterday triggered another rally with the futures market opening higher leaving behind a gap.

Maybe, we close that gap if the price pulls back to the minor upward trendline where we can expect the buyers to step in with a defined risk below the trendline to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 5145 level next.

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

The post Ex-Dividend 24/4/2025 first appeared on IC Markets | Official Blog.

• Putin remains open to contacts with Europeans and Ukraine in the interest of finding a settlement.
• It has no contacts with Europeans or Ukraine.
• Asked about possible Moskow visit by Trump envoy Witkoff, says it has nothing concrete to say on the subject for now but will say more if and when there is news.
• It remains opposed to idea of deploying European peacekeepers in Ukraine.
• It welcomes US efforts to mediate.
• There are many nuances around a possible settlement that need to be worked out and positions that need to be narrowed.
• When asked about alleged US proposals for a settlement which have appeared in media, says there is a lot of fake news around.
• Settlement scenarios cannot be public and that work on them must be conducted in silence.

This reads like the peace deal has still a long way to go despite Trump saying that it’s near.

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

Rate cuts by year-end

• Fed: 83 bps (92% probability of no change at the upcoming meeting)
• ECB: 59 bps (70% probability of rate cut at the upcoming meeting)
• BoE: 92 bps (99% probability of rate cut at the upcoming meeting)
• BoC: 42 bps (55% probability of no change at the upcoming meeting)
• RBA: 119 bps (97% probability of rate cut at the upcoming meeting)
• RBNZ: 81 bps (89% probability of rate cut at the upcoming meeting)
• SNB: 23 bps (68% probability of rate cut at the upcoming meeting)

Rate hikes by year-end

• BoJ: 16 bps (99% probability of no change at the upcoming meeting)

The positive Trump’s comments on China late yesterday saw the market paring back some of the agressive easing bets we had just before his remarks. For example, the market doesn’t see any chance of a 50 bps cut for the RBA now.

Interest rates expectations depend on tariffs and trade deals now. More positive developments will see the market repricing expectations on a more “hawkish” side, while negative news will keep the more dovish bets alive.

In my opinion, we will continue to see de-escalation and eventually get some key developments that will take us back to the market pricing in better times ahead.

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

• Services PMI 48.9 vs 51.5 expected and 52.5 prior
• Manufacturing PMI 44.0 vs 44.0 expected and 44.9
  prior
• Composite PMI 48.2 vs 50.4 expected and 51.5 prior.

Key findings:

• Flash UK PMI Composite Output Index at 29-month low.
• Flash UK Services PMI Business Activity Index at 27-month low.
• Flash UK Manufacturing Output Index at
  32-month low.
• Flash UK Manufacturing PMI at 20-
  month low.

Comment:

Commenting on the flash PMI data, Chris Williamson,
Chief Business Economist at S&P Global Market
Intelligence said:

“While recent months have been characterised by UK
businesses treading water, broadly stagnating since last
autumn’s Budget, businesses are reporting more of a
struggle to keep their heads above water in April.

“April’s fall in output was the largest recorded for nearly
two and a half years, consistent with GDP declining at a
quarterly rate of 0.3%, reflecting falling activity and
demand across both manufacturing and services.

“Job cutting remains aggressive as business optimism
about the year ahead sank to a two-and-a-half-year low,
and one of the lowest levels yet recorded by the survey,
even surpassing the low seen in the immediate
aftermath of the Brexit vote in 2016.

“The disappointing survey reflects the impact of
headwinds from both home and abroad. The biggest
concern lies in a slump in exports amid weakened global
demand and rising global trade worries, but higher
staffing costs have also piled pressure on companies –
linked to the National Insurance and minimum wage
changes that came into effect at the start of the month.
Just as export orders are falling at the sharpest rate
since May 2020, during the pandemic lockdowns, firms’
costs spiked higher to a degree not seen for over two
years.

“The collapse in confidence and drop in output during
April raise red flags as to the near-term economic
outlook and add pressure on the Bank of England to
reduce interest rates again at its May meeting. There will
be some uncertainty, however, as to whether the recent
upturn in price pressures could become entrenched or
whether it merely represents a short-term tax-related
spike which should be ‘looked through’.”

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

I’ve been seeing lots of people complaining about the lack of market reaction to economic data. This is something I’ve been warning about every day since April 2.

Here’s the thing about economic data. The data is by definition backward looking but the market is a forward looking machine. To trade economic data successfully, one has to consider three things: the underlying expectations, the context and whether the data changes future expectations.

All the data we are getting now is old news because most of it doesn’t reflect the hit from tariffs yet. Moreover, once we start to get weaker data (if we even get it at all), the conditions might have already changed by then.

Say for example, we get more positive developments on trade negotiations front. The markets will front run (and they are already doing it) the end of the trade wars and the following improvement in growth and sentiment.

By the time the data will start to show weakness, the market might already be looking to future strength and therefore fade all the negative data in expectations of better data in the future.

So, everything revolves around tariffs now, that’s the only thing you should focus on.

All the best traders in the world will tell you this:
never focus on the present because it’s already in the price. Focus on
the next 6-12 months because that’s where the market will head to.

I wrote a longer article on this topic here.

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

• Prior 51.0
• Manufacturing PMI 48.7 vs 47.5 expected
• Prior 48.6
• Composite PMI 50.1 vs 50.3 expected
• Prior 50.9

It’s a mixed report but overall it shows that euro area business activity basically ground to a halt in April. An improvement in manufacturing activity is the only bright spot, with output levels at its highest in 35 months. However, new orders were a big drag as firms remained reluctant to expand output for an eleventh month running. Meanwhile, the outlook for the year ahead is taking a turn for the worse amid fears on US tariffs and trade uncertainty. HCOB notes that:

“Manufacturing seems to be holding up better than expected. Despite the US introducing general tariffs of 10% and car
tariffs of 25% at the start of April, most manufacturers in the Eurozone are not too fazed. Instead of falling off a cliff, they’ve
actually increased production for the second month in a row, and even more robustly than in March. Manufacturers have
also slowed down job cuts and managed to boost their profit margins, thanks to lower input prices and the ability to raise
output prices faster than the previous month. Energy prices, which have dropped due to US recession fears, are currently a
boon for the Eurozone’s manufacturing sector. Another positive factor is the announced increase in defence spending.

The service sector has turned into a bit of a party pooper. Activity has shrunk instead of growing, which it had been doing
almost continuously since February 2024. This has pushed the whole economy into stagnation territory, according to the
composite PMI. A faster drop in new business suggests this weakness might stick around for a while. However, the higher
fiscal spending on infrastructure in Germany and defence spending across Europe should eventually benefit not just
manufacturing but also the service sector, though with a bit of a lag.

The European Central Bank is getting some mild support for its rate-cutting stance from the price indicators in the services
sector, which the monetary authorities are closely watching. Costs have risen at a similar rate to March, but the increase in
selling prices has slowed significantly. Goods prices are showing mixed behaviour: input prices have reversed their
inflationary trend of the past four months and have fallen, while output prices have increased a bit more than in March but
still modestly.

Looking at the two major economies of the Eurozone, Germany and France, we see a similar pattern. Both countries saw
an increase in manufacturing output in April, while activity in the services sector shrank. The overall weakness seems a bit
more pronounced in France, especially in the services sector. This might be due to the contrasting political landscapes: in
France, there is a constant risk of government collapse amid a fragile debt situation, while in Germany, there is a chance of
having a functioning new government with significant fiscal leeway starting in May.”

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

• Manufacturing PMI 48.0 vs 47.6 expected and 48.3 prior
• Services PMI 48.8 vs 50.2 expected and 50.9 prior
• Composite PMI 49.7 vs 50.4 expected and 51.3 prior

Key findings:

• HCOB Flash Germany Composite PMI Output Index 4-month low.
• HCOB Flash Germany Services PMI Business Activity Index 14-month low.
• HCOB Flash Germany Manufacturing PMI Output Index 2-month low.
• HCOB Flash Germany Manufacturing PMI 2-month low.

Comment:

Commenting on the flash PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:

“You could say Germany’s export-driven growth model is facing some serious challenges, but the US tariff policy has not
caused a major slump in manufacturing just yet. In fact, manufacturers have managed to increase production for the second
month in a row and even saw a slight uptick in export orders, something we have not seen since early 2022. This is pretty
impressive and might be due to hopes of reaching some compromises with the US, along with Germany’s well-diversified
export destinations – 90% of exports go to countries other than the US. Of course, there is still a lot of uncertainty, and
optimism about future output has taken a bit of a hit.

“Profit margins for manufacturers could improve. Input prices have dropped significantly thanks in part to lower energy costs,
and companies have been able to raise their selling prices a bit for the first time since May 2023. This could be a sign of
resilience, possibly because many manufacturing companies are producing dual-use goods or can switch to making military-
use products. With the new government likely to ramp up defence spending, many companies are starting to think along
these lines.

“Things are not going smoothly for service providers. Activity is down, and optimism about future business has taken a hit.
Still, the continued growth in employment and some signs of stabilization in new business show that companies are far from
throwing in the towel. With the expected expansionary fiscal policy, service providers should be able to benefit from this
development.

“Costs in the service sector have risen faster than in the previous month, dashing hopes that wage increases are slowing
and feeding less into input costs. Combined with slower inflation of selling prices, this means profit margins in the services
sector are taking a hit.”

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

• Prior 47.9
• Manufacturing PMI 48.2 vs 48.0 expected
• Prior 48.5
• Composite PMI 47.3 vs 47.8 expected
• Prior 48.0

French business activity is seen contracting at a slightly faster pace in April, with the services and composite readings missing on estimates. The impact of tariffs and trade uncertainty is yet to be felt and will likely only be more evident in the months ahead, particularly in 2H 2025. That doesn’t bode well for the outlook when demand conditions are already as weak as they are now. HCOB anticipates the ECB will cut rates again by three more times during the course of the year.

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

• This is not the right way to deal with China and it is not feasible
• US should conduct dialogue with China on the basis of equality and mutual benefit

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

• German DAX futures +2.3%
• French CAC 40 futures +1.0%
• UK FTSE futures +0.8%

This keeps with the mood from US futures, with S&P 500 futures seen up 1.6% as well. There is some hints of optimism after Trump’s comments yesterday, but have things really changed? I for one am not convinced, not least with Trump’s policy incoherence. For now, the broader market mood is also calmer but we’ll see how long that can last. Be wary of commentary from China later in the day, usually hits in about an hour or so at the earliest.

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

Trump finally decided to tone down his flagrant approach in the tariffs war with his comments from yesterday. But were they as optimistic as one can really take them to be?

The positive thing is that he reaffirmed that the US is “going to be very nice to China”. Adding to that is he’s not going to “play hardball with president Xi” and that tariffs “will come down substantially”. On tariff levels, it’s a low benchmark considering we’re at over 100% now and essentially trade is stifled between the two countries. But hey, at least Trump is trying to talk about progress.

However, his choice of words on how that might come about is perhaps not too propitious I would say.

He said that “ultimately, they (China) will have to make a deal” and that he thinks “they’ll (China) want to be a part of the US”. And that if no deal is struck, then he will just “set a deal” and “set a number” on tariffs.

His comments reaffirm that both sides have yet to speak officially on the matter and works an angle that China will have to be the first to communicate. But judging by the stance that Beijing has been going with, I highly doubt that is going to be the case. Not least when Trump sneakily inserted a jab in his remarks that “we just destroyed China”.

For now, we’ll have to wait on Beijing’s response later in the day. However, it feels like Trump has this idea built up in his head and China continues to just sit and wait to see what comes next.

Going back to Trump’s remarks, the issue in all of this isn’t so much about what he is saying. It’s more so about how this is all coming about. There’s so much flip-flopping and back-and-forth that it makes the situation so hard to read and gather much, if any confidence at all.

And that’s the problem. There is just no consistency or any coherence in terms of his policy approach. That is the major issue that is plaguing US assets at the moment. It’s a credibility issue.

There is a tentative bounce since overnight trading but can it really be classified as the turning point? To answer that is basically a test of confidence on whether or not Trump will make a U-turn again on his remarks yesterday. And at this point, nobody will be surprised if that happens.

And not just the one on trade/tariffs. With the Fed set to keep rates unchanged in two weeks’ time, how will Trump respond to that? For some context, markets are pricing in a ~92% probability of the Fed leaving rates as they are on 7 May. Will he start bashing at Powell again? Will he suddenly threaten Powell’s job security as he did before? That’s a conceivable notion given his track record.

The bottom line is that as long as Trump’s erratic nature continues to dominate the market landscape, it’s really not a question of if there is going to be another shift in the tides. It’s more so a question of when.

I won’t rule out that any bounce or recovery in markets can look or feel bigly in times like these. After all, there is also money to be made in bear market rallies if you time it right:

But as mentioned before, with every day that US tariffs stay in place and the fight with China continues, it will just continue to erode the global economic outlook and confidence in risk sentiment. That is even if there are no other developments. I mean, give it a couple of weeks until the hard data comes. That’s when reality will come knocking.

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