Articles

• Prior +0.8%; revised to +0.2%

German retail sales fell back in March and that follows a more negative revision to the February numbers as well. The year-on-year reading at least still shows a 2.2% increase in retail sales compared to March last year.

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

• Prior 0.0%

The average house price in the UK is seen easing a little to £270,752, with Nationwide noting that the market is “likely to remain a little soft in the coming months, following the pattern typically observed following the end of stamp duty holidays”.

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

• Prior -0.1%

French GDP is seen rebounding a little after contracting in Q4 last year. But a negative point to the report is that consumption activity was seen flat in the first quarter. So, that reflects some pessimism in terms of domestic demand conditions.

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

• Trump will deliver ‘Investing in America’ remarks on Wednesday afternoon, US Eastern time
• Chinese markets closed tomorrow, Thursday, through to reopening on Tuesday next week
• US media report – Elon Musk no longer working from White House
• Australian Treasurer Chalmers says says the market expects more interest rate cuts

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• China Caixin Manufacturing PMI for April 2025 50.4 (expected 49.9, prior 51.2)
• China April official Manufacturing PMI 49.0 (expected of 49.5)

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• Australian Q1 2025 inflation headline 2.4% y/y (expected 2.2%)

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• PBOC sets USD/ CNY central rate at 7.2014 (vs. estimate at 7.2670)
• New Zealand April business confidence 49.3 (vs. 57.5 prior )
• FT reports Trump’s top economic adviser Miran ‘out of his depth’ in hedge fund Q&A

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• Japanese government official expresses mixed feelings on Trump tariffs
• Japan March retail sales +3.1% y/y (vs. expected +3.5%)
• Japan March 2025 preliminary industrial production -1.1% m/m (expected -0.4%)

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• Toyota and Waymo team up to advance autonomous driving and next-gen vehicles
• UK April business sentiment fell to its lowest level in three months
• Trump says Federal Reserve ‘person’ is not doing a good job
• Billionaire hedge fund guy forecasts gold towards US$5000
• US inflation data due Wednesday – what investment banks expect for March PCE
• Reminder – Goldman Sachs expects the US dollar has further to fall
• Canadian Prime Minister Carney and Trump spoke on the phone
• Oil: private survey of inventory shows headline crude oil build much larger than expected
• Supermicro Computer preannounces a miss in Revenues and EPS. Stock down sharply
• A look at some of the earnings after the close.Starbucks, Visa, First Solar, Snap report.
• Forexlive Americas FX news wrap: Trade data dims outlook for tomorrow’s GDP report
• US indices close higher. S&P up for the sixth consecutive day
• US Treas Sec Bessent says no trade deal is done until Trump announces it
• Trade ideas thread – Wednesday, 30 April, insightful charts, technical analysis, ideas

Australian inflation slowed in the latest reading but still came in ahead of expectations, reinforcing expectations that the Reserve Bank of Australia will cut its cash rate at its next policy meeting on May 19–20. While softer near-term price pressures and rising global growth risks support the case for easing, the RBA may hold back from adopting a clearly dovish stance just yet.

In China, official PMI data showed a renewed loss of momentum in the factory sector. The official manufacturing PMI fell to 49.0 in April from 50.5 in March, marking the sharpest contraction since December 2023 and reflecting weaker conditions among larger, state-linked enterprises. In contrast, the Caixin manufacturing PMI, which focuses more on smaller, private exporters, eased to 50.4 from 51.2 but remained in expansion territory. The divergence suggests that while broad industrial activity is weakening, smaller firms are showing relative resilience despite mounting tariff headwinds.

New export orders slumped at the fastest pace since July 2023 amid heightened trade tensions, contributing to only a modest rise in overall new business volumes.

Chinese markets are closed for the Labour Day holidays from Tuesday through Monday, limiting immediate reaction to the data.

In commodities, U.S. crude prices came under pressure after the American Petroleum Institute reported a 3.76 million barrel increase in U.S. inventories, stoking some fresh concerns over demand.

Market movement was restrained during the session. AUD/USD has pooped up a little following the CPI data while the USD elsewhere is a touch better bid. Ranges have not been large. While regional equities have been mixed US equity index futures have been heavy during evening trade.

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

Trump will be speaking Wednesday:

• 11 am Cabinet meeting (1500 GMT)
• 4 pm ‘Investing in America’ remarks (2000 GMT)
• 8 pm NewsNation Cuomo Townhall: The First 100 Days (0000 GMT)

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

China will be on holidays from May 1 to May 5 (five days in total).

This is to celebrate Labour Day.

Markets will be closed tomorrow, Thursday, May 1, 2025, and reopen on Tuesday next week.

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

The euro has fallen out of bed.

Apart from what has already been posted there is no obvious smoking gun.

USD/JPY is a touch better bid also. GBP/USD is a little lower also.

US equity index on Globex have been soft since reopening for evening trade.

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

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

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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.

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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.

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.