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China Caixin Manufacturing PMI for April 2025 comes in lower than March but better than expected at 50.4

• expected 49.9, prior 51.2

The details, though …. slowing demand, falling export orders, and rising trade tensions knocked China’s factory momentum in April, with sentiment near record lows.

• Demand & Output: New orders rose only slightly; export orders dropped at the fastest pace since July 2023 due to U.S. tariffs. Output remained in expansion for an 18th month.

• Employment: Jobs shrank again after a brief rebound in March — layoffs most common in investment and intermediate goods sectors.

• Prices: Input costs declined for a second month, driven by weaker commodity prices; firms cut output prices for a fifth straight month.

• Logistics & Inventory: Supply chains faced delays linked to trade tensions; firms ran down inventories amid weak demand.

• Business Confidence: Optimism dropped sharply, hitting the third-lowest level on record, with firms citing trade uncertainty.

• Policy Outlook: Early-year momentum is fading; analysts warn tariff shocks will weigh on growth in Q2–Q3, urging faster policy support.

Earlier from China, the official PMIs:

• China April official Manufacturing PMI 49.0 (expected of 49.5)

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

The previous month’s PMIs, March 2025, showed the fastest in a year ahead of US tariffs. The April results have fallen back, as was expected. There is probably worse to come in the months ahead as the tariff impact bites deeper.

China March official Manufacturing PMI 49.0, this is a 16-month low

• expected 49.8, prior 50.5

Non-Manufacturing PMI 50.4

• expected 50.6, prior 50.8

Composite PMI 50.2

• prior 51.4

more to come

***

A diffusion index is a statistical measure used to summarise the direction of change in a particular economic indicator, typically based on survey data. It’s most commonly used in business and economic surveys, such as PMIs, to show whether activity is generally expanding, contracting, or staying the same.

How does it work?

• Respondents (like purchasing managers) are usually asked whether key business indicators (e.g. new orders, output, employment) have increased, decreased, or stayed the same compared to the previous month.

Each response is assigned a value:

• Above 50 = Expansion
• Exactly 50 = No change
• Below 50 = Contraction

So, for example: A PMI of 50.5 means a majority of businesses reported growth compared to the previous month.

• A PMI of 49.6 means a majority reported a decline.

The reason diffusion index results (like PMIs) are often viewed positively—even if they don’t rise much—is because of how the index works and what it signals about the direction of economic activity rather than its speed or magnitude.

Here’s why:

Even a small increase above 50 indicates ongoing expansion. For example: If a PMI rises from 50.4 to 50.5, it’s not a big jump—but it still means more businesses are reporting improvement than deterioration.

• The higher the number, the broader the expansion—but as long as it stays above 50, growth is continuing.

A diffusion index doesn’t need to surge to be encouraging. A steady, slightly rising index suggests:

• Resilience in economic activity,

• Confidence among businesses,

• And that contraction risks are low, which is especially important in uncertain or volatile environments.

Diffusion indexes are all about momentum—the general trend in business conditions. Even modest gains reflect:

• Cumulative improvement in areas like new orders or employment,
• And broad-based participation in recovery or growth, which can be more sustainable than sharp spikes.

If the index is rising, even slowly, it shows that more firms are reporting better conditions than worse. That’s a clear contrast to a reading below 50, where the majority see deterioration.

***

In summary:

• A small rise in a diffusion index may not be flashy, but it’s still positive because it means things are getting better, not worse—and in economics, direction and momentum often matter more than size in the short term.

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

Inflation data from Australia for the January – March quarter and for March month, 2025.

Headline inflation:

+2.4% y/y

• expected 2.2%, prior 2.4%

+0.9% q/q

• expected %, prior 0.2%

Trimmed mean (a measure of core, or underlying inflation)

2.9% y/y

• expected 2.9%, prior 3.2%

0.7% q/q

• expected 0.7%, prior 0.5%

Weighted median (an alternative core measure) 3.0% y/y

• expected 2.9%, prior 3.4%

and 0.7% q/q

• expected 0.7%, prior 0.5%

While a touch on the higher than expected side these results are enough for the Reserve Bank of Australia to cut its cash rate again its May meeting.

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

ANZ business survey, business confidence and activity both lower than in March. April 2 was when Trump announced his huge tariffs, though he did back track on them somewhat.

• Business confidence fell 9 points to 49.3
• Expected own activity fell 1 point to 47.7

ANZ comments:

• past own activity (the best GDP indicator in
  the survey) jumped 10 points from 1 to 11, while past employment jumped 8
  points, from -6 to 2.
• Most forward-looking activity indicators were sharply lower
  in the late-month responses.
• Pricing and cost indicators indicate margin squeeze from ongoing cost
  pressures. One-year-ahead inflation expectations were little changed at 2.65%.

more to come

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

Australian dollar traders are preparing for a busy morning today, with key inflation data due out in the morning session that could move the currency out of its recent tight range. The Aussie has been trading in a relatively tight range for the last week since charging higher from annual lows hit earlier in the month, as the USD collapsed. The last week has seen the pair kept within a 0.6330/0.6450 range, and a big deviation from expectation on today’s data could see this broken.

Expectation is for the quarter-on-quarter number to show a 0.8% increase, with the year-on-year number coming in with a 2.3% increase—still slightly above the 2% that the Reserve Bank would like to see it at. Anything north of these estimates could see the currency break higher, as expectations for a cut from the RBA are pulled back, whilst a lower number would give the green light for further cuts and see the pair drop back into lower ranges seen earlier in the month.

Resistance 2: 0.6775 – Long-Term Trendline Resistance
Resistance 1: 0.6449 – Trendline Resistance and 2025 High

Support 1: 0.6320 – April 15 Low
Support 2: 0.5912 – Trendline Support and 2025 Low

The post Trade the Aussie on CPI Data Today first appeared on IC Markets | Official Blog.

People’s Bank of China USD/CNY reference rate is due around 0115 GMT.

The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.

How the process works:

• Daily midpoint setting: Each morning, the PBOC sets a midpoint for the yuan against a basket of currencies, primarily the US dollar. The central bank takes into account factors such as market supply and demand, economic indicators, and international currency market fluctuations. The midpoint serves as a reference point for that day’s trading.
• The trading band: The PBOC allows the yuan to move within a specified range around the midpoint. The trading band is set at +/- 2%, meaning the yuan could appreciate or depreciate by a maximum of 2% from the midpoint during a single trading day. This range is subject to change by the PBOC based on economic conditions and policy objectives.
• Intervention: If the yuan’s value approaches the limit of the trading band or experiences excessive volatility, the PBOC may intervene in the foreign exchange market by buying or selling the yuan to stabilize its value. This helps maintain a controlled and gradual adjustment of the currency’s value.

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

Japan govt official on factory output:

• Environment surrounding production remains highly uncertain
• March motor vehicle production down 5.9%m/m due to lower exports, part supply disruption
• Some manufacturers expressed concern about U.S. tariffs
• Not heard directly U.S. tariff measures have forced manufacturers to change production plan

CopyThe data is here, its pretty poor:

• Japan March 2025 preliminary industrial production -1.1% m/m (expected -0.4%)

***

The Bank of Japan are meeting today and Thursday. The Bank is not expected to change its policy settings.

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

The Financial Times with the report on Trump’s top economic adviser Stephen Miran addressing investors last Friday. . FT is gated, but in brief:

• Some participants found Fridays meeting counter-productive
• two people describing Miran’s comments around tariffs and markets as “incoherent” or incomplete
• and one of them saying Miran was “out of his depth”
• “[Miran] got questions and that’s when it fell apart,” said one person familiar with the meeting. “When you’re with an audience that knows a lot, the talking points are taken apart pretty quickly.”

FT cite people with direct knowledge of the matter.

Miran is not a dummy, his CV includes:

• advisor of economic policy for the Department of the Treasury from 2020 to 2021
• senior strategist at Hudson Bay Capital Management

He maybe struggled with the incoherence of scattershot policy? Bessent seems to do OK though. Dunno.

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

Japan Industrial Production for March 2025, preliminary, -1.1% m/m

• expected -0.4%, prior 2.3%

and -0.3% y/y

• prior +0.1%

Industrial Production forecast 1 month ahead 1.3% m/m

• prior +0.6%

2 months +3.9%

• prior +0.1%

The BoJ is expected to remain on hold at its meeting April 30/May 1.

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

Toyota Motor and Alphabet’s Waymo have announced a new partnership to co-develop autonomous driving platforms and explore innovations in next-generation personally owned vehicles (POVs).

• Toyota and Waymo will jointly create an autonomous driving system for future models.

• The collaboration will also focus on improving self-driving capabilities in privately owned vehicles.

• Both companies are looking at ways to expand the partnership over time.

• Waymo contributes its expertise in autonomous driving technology, while Toyota offers large-scale manufacturing and global distribution.

• The agreement is seen as a significant move toward delivering safe, consumer-ready self-driving cars.

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

UK Lloyds Business Barometer for April 2025 comes in at a three month low of 39%

• prior 49%
• long-run average is 29%
• gauge of economic optimism fell by 13 points to
  28%
• 70% of businesses expect to raise prices in the coming 12
  months

Info comes via a Reuters report, which adds in on a survey the Confederation of British
Industry:

• private sector output
  declined in the three months to April
• is expected to fall
  again in the three months to July
• “Private sector activity remains subdued, with our surveys
  pointing to weaker economic momentum than implied by official
  data,”
• “Uncertainty has ramped up over the last few weeks,
  following the back-and-forth on tariffs levied by the US and,
  subsequently, big movements in financial markets.”

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

John Paulson is billionaire hedge fund manager who leads his own firm, Paulson & Co. He likes gold a lot higher:

• near $5,000 an ounce by 2028 … the “high $4,000 range”

Paulson says that estimate was put to him, adding that “It’s a well-informed prediction. I think that’s a reasonable number”.

Citing:

• “As central banks and people look to put their money in a more stable source… I think gold will increase its position in the world,”
• “When the war started, (Russia) kept their physical gold, that was safe, but all their cash – the paper reserves – were confiscated,” Paulson said.

  “So that caused other central banks to wake up and say … ‘What happens if there’s a conflict with the U.S.? Could the U.S. keep our treasuries, and all our savings would disappear?'”

• global trade uncertainty, fueled in part by Washington’s tariffs, as further underpinning gold.

  “The best place to go if your faith in the (U.S.) dollar diminishes is gold as a reserve currency,”

—

I compressed the price scale to give a pic of how gold has fareed (this is a weekly candle chart) and to put 5K in the picture:

What y’all think? Comments welcome!

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