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Measured remarks from Bank of America ICYMI:

Bank of America CEO Brian Moynihan:

• “we potentially face a changing economy in the future”
• US consumers still spending, keep “pushing money into the economy”
• business clients “remain profitable, liquid and have strong results”
• We continue to watch for signs the environment is changing

Bank of America CFO Alastair Borthwick:

• “Our research team at this point doesn’t believe we’ll see a recession, and our clients continue to show encouraging signs.”
• “Our research team are still calling for modest growth,”
• ” they think that some of the uncertainty may lead to a slowdown in the economy before it picks back up, but that would be very similar to things like the blue-chip consensus at this point, and similar to what Chairman Powell has said”

BoA is, nevertheless, building up precautions. It set aside US$1.48 bn in credit provisions for potential future losses, over 12% more than it set aside a year ago.

This is the read in Chinese state media. No love lost.

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

• Crude oil little changed in trading today for the second consecutive day
• Preview: The market is evenly split on a Bank of Canada rate cut on Wednesday
• White House says some trade deals to be announced ‘very soon’
• Amazon is concerned about 3rd party sellers due to tariffs
• European indices close higher. German Dax shares rise despite lower ZEW confidence
• Eyes on the global freight market as ocean bookings plunge
• Deutsche Bank downgrades US 2025 GDP forecast to +0.9%
• BoA CEO: Consumer spending hasn’t slowed yet
• Canadian housing starts slowed further in March
• Canada March CPI +2.3% y/y vs +2.6% expected
• US March import prices -0.1% vs +0.0% expected
• Empire manufacturing index for April -8.10 versus -14.50 estimate
• UK jobs data sends conflicting messages to Bank of England
• Trump: All necessary permits will be expedited to Nvidia
• Forexlive European FX news wrap: Markets await new info on trade negotiations

Another quiet day in the US session. US Empire Manufacturing data showed some weakness especially with the 6 month forward index falling below Covid levels indicative of the uncertainty from the new administration. However, the market is more accepting of the survey type data. There is always the chance of a headline reversing the negative trend from tariffs. Of course it could go the other way as well.

The EURUSD moved lower today on the back of comments that tariff talks were not progressing. The German ZEW data was also weaker than expectations ahead of the US open. Technically, the price decline fell below support defined by a swing level and retracement at 1.1271 to 1.1276, but stalled short of the rising 100 hour MA (at 1.1256 currently and moving higher).The low price reached 1.12634 and is currently trading at 1.1281. Sellers could not keep the momentum going…..today at least.

THe GBPUSD moved higher and traded to the highest level since October 2024 up to 1.3252, but backed off the pair is trading at 1.3229 which is still up 39 pips or 0.27% on the day.

The USDCHF was the biggest mover with a gain of 1.10% or 0.90 pips on the day. That has the price moving away from the low from Friday near 0.8100 and closer to the falling 100 hour MA at 0.82506. The high price today reached 0.8235 so far today. A move above the 100 hour MA and staying above is needed to give the buyers a small victory from a technical perspective but with other hurdles after the sharp move lower in April that has seen the price moved from 0.8850 to the low of 0.8100 on Friday in less than 2 weeks of trading.

The USDCAD ahead of the BOC rate decision tomorrow, bottomed near the low of a swing area between 1.3843 to day before bouncing higher. The key 200 day MA looms above at 1.4000 level. The price fell below the 200 day MA last week for the first time since October 2024. A move back above that moving average would disappoint the sellers.

US stock indices fell today in up-and-down trading:

• Dow industrial average fell -155.83 points -0.38% at 40368.96.
• S&P index fell -9.34 points or -0.17% at 5396.63
• NASDAQ index fell -8.32 points or -0.05% at 16823.17.

Although Nvidia did rally 1.35%, Metafell -1.87%, Microsoft felt -0.54%, Alphabet fell -1.74%, Amazon fell -1.39% and Apple fell -0.19%.

In the US debt market, yields fell modestly after trying the upside earlier today. Yesterday the 10 year fell over 10 basis points today the 10 year is down an additional 3.3 basis points. A look at your curve shows:

• 2 year yield 3.847%, +1.5 basis points
• 5-year yield 3.980%, -1.8 basis points
• 10 year yield 4.331%, -3.3 basis points
• 30 year yield 4.779%, -1.8 basis points

Looking at other instruments:

• Crude oil traded in a modest range for the second consecutive day the price trading down around $0.20 at settlement.
• Gold rose $18.07 or 0.56% to $3228.70
• Silver fell 6 cents or -0.21% to $32.28
• Bitcoin fell $-600 to $83,980

Tomorrow the Bank of Canada interest rate decision will be announced at 9:45 AM ET. The OIS market pricing is for a 45% chance of a rate cut and a 55% chance of no change. Flip a coin for a preview see Adam’s post by clicking here.

Fed chair Powell will speak at 1:30 PM ET. The market will be instead and what he has to say.

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

Trump spekain on Fox, on his tariff pause:

• was because it’s a transition
• came from need for flexibility
• may want countries to choose between US or China

We all know why the pause.

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

Q1 2025 economic growth data from China is expected to have slowed from Q4 2024. As the trade war bits it’ll probably slow even further. UBS have a dour outlook:

• UBS has cut its China GDP growth forecast to 3.4% for 2025

The headline March data is expected to be stable apart from a small tick up for retail sales. Yesterday we had March trade data.

• China March dollar-denominated exports +12.4% y/y

I took the improvement in exports as indicative of ‘front loading’ ahead of higher tariffs. A hiccup in my narrative is that exports to the US were not overly strong.

This snapshot from the ForexLive economic data calendar, access it here.

The times in the left-most column are GMT.

The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

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

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

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

It was a quieter day on the tariff front, though there was a concerning report highlighting a lack of progress between the US and EU on tariffs.

Closing changes:

• S&P 500 -0.2%
• Nasdaq Comp flat
• DJIA -0.4%
• Russell 2000 +0.1%
• Toronto TSX Comp +0.75%

After hours, shares of United Airlines are up 8% after reporting earnings. The company forecast a midpoint of $12.50 in EPS in a continued growth scenario and $8 in a recession.

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

The latest Bank of America fund manager’s survey is out and this is the headline-grabbing chart. It’s a survey of global investors asking them if they plan to cut their weighing of US equities and it shows that 65% want to be underweight.

Now that may turn out to be a contra indicator as it’s been US equities that have driven global markets higher for the past five years, largely due to tech companies. But those companies are richly valued and are vulnerable to tariffs and potential retaliation from trade partners. Global equities are also much cheaper and that provides some downside protection in a slowing global economy.

More importantly, the survey may highlight a newfound determination to leave or lighten up on USD assets.

Deutsche Bank today highlights the vulnerability:

• Foreigners own
  $7 trillion of American fixed income and $18 trillion of American equities
• The value of equity ownership has risen 6x since 2010
• European portfolio holdings of US equities have risen from 5% to 20% since 2010
• They note that unhedged FX exporse to US assets is very high

The more benign interpretation of our analysis is that
foreigners have merely passively tracked rising aggregate valuations of US
equities and issuance of US bonds. The more worrying interpretation is that
this has left foreigners – especially Europeans – with a huge overweight in
their portfolios relative to history, especially in US equity markets which
tend to be currency unhedged.

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

• More than 15 trade deal proposals are being actively considered
• We believe that we can announce some very soon
• The President has not made a determination on raising the corporate tax rate

The top thing I’m watching for in trade deals when they are announced is whether or not the US will drop the 10% baseline tariff.

More:

• The ball is in China’s court
• Trump is open to a deal with China

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

The S&P 500 is at the lows of the day, down 10 points or 0.2%, to 5397.

The index has tried to rally several times but has carved out a series of lower highs over the two trading days this week. That’s a red flag headed into the final hours of trading.

Yesterday’s low of 3585 is a spot to watch.

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

The European equity indices closed higher on the day. For the German Dax it rose despite weaker than expected German Dax indices. The ZEW Economic Sentiment Index for Germany fell sharply to -14.0 in April, down from 51.6 in March and well below the market expectation of 9.5. This marks a significant deterioration in forward-looking investor confidence.

However, the assessment of current conditions showed modest improvement, with the index rising to -81.2 from -87.6 in the previous month, slightly better than the forecast of -86.8.

Concerns about the tariff situation was also ignored. EU officials were reportedly saying that they expect tariffs to remain as talks with the US are making little progress.

A look at the closing levels:

• German Dax +1.43%
• France’s CAC +0.86%
• UKs FTSE 100 +1.41%
• Spain’s Ibex + 2.14%
• Italys FTSE MIB +2.39%

For each of the major indices they moved above and closed above their 100 hour MAs.

• German Dax closed at 21253.71 above the 100-hour MA at 20947.96
• France’s CAC closed at 7138.41 above the 100-hour MA at 7318.99
• UK FTSE 100 closed at 8349.11 above the 100- hour MA at 8137.74
• Spain’s Ibex closed at 12879.30 above the 100-hour MA at 12543
• Italy’s FTSE MIB closed at 35843.81 above the 100 hour MA at 35247.62

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

Yesterday I wrote about a forecast for a plunge in US port volumes that would start to hit in May and now Vizion is out with some real-time data showing that ocean bookings for US imports crashed in the week after ‘Liberation Day’ compared to the week before.

In general, a shipment from Shanghai to Los Angeles take 20-30 days, adding another 15 days for transit through the Panama canal to New York.

A report in Sourcing Journal cited Kyle Henderson, CEO and co-founder of Vizion, who highlights a sharp drop in bookings of apparel shipments.

“A low-margin, high-volume Asia-origin business like apparel is
extremely susceptible to the tariff whiplash,” Henderson said. “You can
see the rationale of pause or hold all shipments, because if anything
starts arriving in the country and these tariffs are active, a brand
might now financially be in a tough spot because they now owe a pile of
cash that they’re not prepared to pay.”

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

The world is facing a dollar confidence crisis as the
repercussions of “Liberation Day” continue to reverberate, Deutsche Bank says.

The German bank is out with its latest forecasts for the US economy and is increasingly tilting towards a stagflationary scenario.

• 2025 US growth forecast cut to 0.9% (q4/q4), hit by
  tariffs, policy uncertainty and tighter financial
  conditions.
• Labor market still resilient but cracks emerging;
  unemployment to rise to 4.6% this year (4.1% currently)
• Tariffs look set to lead a resurgence in inflation
  pressures this year. Core PCE inflation now
  seen ~3.75% end 2025 (~1pp above prior
  view); risks remain skewed higher.
• Critically, they see US CPI at 3.2% in 2026, endangering rate cuts but forecast a Dec cut and two more in Q1 2026
• China GDP forecast now revised down to 4.5% for 2025, assumes 145% tariffs
• They believe that Xi’s “whatever it takes” fiscal boost will
  be announced before mid-year.
• Eurozone growth downgraded to 0.5% for 2025
• UK GDP seen at +0.8% vs +1.0% prior, expect Q2 contraction on inventory unwind
• Global growth expected at 2.9% in
  2025 (vs 3.2%) and 3.0% in 2026 (vs 3.3%)

Deutsche Bank writes:

This potentially marks the largest shock to the
world’s financial and trading system since the collapse of Bretton Woods in
1971. Although Trump’s 90-day tariff reprieve and subsequent exceptions have
lessened the impact, much damage has already been done thanks to extreme levels
of uncertainty around the credibility and direction of policymaking. The US’s
exorbitant privilege of being able to comfortably fund its twin deficits is
perhaps the largest consequence of recent events, and may ultimately determine
how far the US administration is able to continue this policy.

I worry that we are underestimating supply chain impacts from a China-US decoupling and launching a repeat of covid-style inflation.

In terms of FX, Deutsche Bank sees EUR/USD rising to 1.15 by year end.

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