Articles

• Final Q4 GDP was 2.4% annualized
• Final Q3 reading was +2.8% annualized
• Consumer spending: +1.8% vs +4.0% prior
• GDP final sales (excluding inventories): -2.5% vs 3.3% prior
• GDP price index (GDP deflator): 3.7% vs 3.0% expected
• Core PCE (excluding food & energy): 3.5% vs 3.3% expected
• PCE price index: 3.6% vs 2.4% prior
• PCE services excluding energy and housing +3.4% vs +2.3% prior
• Business investment (nonresidential fixed investment): % vs % prior

This report is negative but it’s even worse than it looks with a poor showing domestically and from the consumer. In addition, the inflation numbers were hotter.

The ‘consensus’ here was +0.3% but that didn’t fully take into account the latest poor trade data so the market was likely closer to the actual reading, and that’s what Bloomberg’s consensus had adjusted to.

Contributors and subtractors:

• Consumption: +1.21% vs +2.70% prior
• Government: -0.25% vs +0.52% advance
• Net International trade: -4.83% vs +0.26% advance
• Inventories: +2.25% vs -0.84% advance

This highlights what happened in the quarter as companies surged imports and stuffed them into inventories. The reversal of that will be a net positive in the quarter ahead but it will be met with a drawdown in inventories and falling consumption.

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

• Prior was +155K (revised to +147K)
• Goods producing +26K
• Service providing +34K

• Pay gains for job stayers 4.5% vs 4.6% prior
• Pay growth for job changers 6.9% vs 6.5% prior

This is the worst reading since July and adds a downside risk to Friday’s non-farm payrolls report.

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

• Prior +2.3%
• HICP m/m +0.5% vs +0.4% expected
• Prior +0.4%
• Core CPI Y/Y 2.9% vs 2.6% prior

A touch above expectations but nothing that will change the ECB’s plan of cutting rates in June. The Core reading saw a notable jump though. We will see how things evolve in the next months but the trade negotiations remain the market’s focus.

On a forward looking basis, if we get a resolution on the trade war front, we could see a strong and sudden pickup in demand which would push economic activity and prices up. That’s something to watch out for as it could trigger a more hawkish repricing in interest rate expectations.

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

• Prior +2.3%
• HICP m/m +0.5% vs +0.4% expected
• Prior +0.4%
• Core CPI Y/Y 2.9% vs 2.6% prior

A touch above expectations but nothing that will change the ECB’s plan of cutting rates in June. The Core reading saw a notable jump though. We will see how things evolve in the next months but the trade negotiations remain the market’s focus.

On a forward looking basis, if we get a resolution on the trade war front, we could see a strong and sudden pickup in demand which would push economic activity and prices up. That’s something to watch out for as it could trigger a more hawkish repricing in interest rate expectations.

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

• US MBA mortgage applications w.e. 25 April -4.2% vs -12.7% prior
• Reminder: Trump will speak at an “Investing in America” event at 16:00 ET/20:00 GMT
• Italy April preliminary CPI (HICP) +2.1% vs +2.3% y/y expected
• Eurozone Q1 preliminary GDP +0.4% vs +0.2% q/q expected
• China’s Xi: China needs to adapt to changing situations
• Switzerland UBS April investor sentiment -51.6 vs -10.7 prior
• Italy Q1 preliminary GDP +0.3% vs +0.2% q/q expected
• Germany Q1 preliminary GDP +0.2% vs +0.2% q/q expected
• Bavaria April CPI +2.1% vs +2.3% y/y prior
• Germany April unemployment change 4k vs 15k expected
• Bessent told French Fin Minister the idea of zero reciprocal tariffs wasn’t unrealistic
• Switzerland April KOF leading indicator index 97.1 vs 101.5 expected
• France April preliminary CPI (HICP) +0.8% vs +0.7% y/y expected
• What are the main events for today?
• Heads up: Chinese markets closure until next week
• Germany March import price index -1.0% vs -0.8% m/m expected
• Germany March retail sales -0.2% vs -0.4% m/m expected
• UK April Nationwide house prices -0.6% vs 0.0% m/m expected
• France Q1 preliminary GDP +0.1% vs +0.1% q/q expected
• FX option expiries for 30 April 10am New York cut

We had lots of data releases this morning but as it’s been the case since April 2, the market mostly ignored the data given the focus on trade negotiations.

The Eurozone preliminary Q1 GDP beat expectations but economists already foresaw an improvement due to tariff-driven frontloading
after companies and consumers in the US stockpiled European goods before
the tariffs started.

Inflation data out of France, Italy and Germany continues to be in check despite ticking a bit higher. The data is not going to change the ECB plan of cutting rates again in June though barring a resolution on the tariffs front.

We got one notable headline early in the morning where French Finance Minister Lombard said that he discussed the idea of reciprocal
zero tariffs with US Treasury Secretary Scott Bessent, and Bessent told him that it was not
unrealistic.

The Swiss sentiment surveys fell by much more than expected, which is not a surprise given the tariffs uncertainty. All around the world we are seeing the same trend in soft data.

In the American session, we will get the Advance US Q1 GDP report where the range of expectations is very wide. The good news is that the markets won’t care given that the GDP report is always old news. The markets look forward and that’s why the focus is on trade negotiations.

We will also get the Canadian GDP, the US ADP, the US Employment Cost Index and the US PCE Price Index. Yep, you guessed it, it’s old news. The main event is Trump’s speech at the “Investing in America” event due at 16:00 ET/20:00 GMT. Nonetheless, watch out for trade related headlines as we continue to wait for the details of the first deal.

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

Bloomberg writes “The draft agreement, which envisages creating a joint fund to manage
Ukraine’s investment projects, has been finalized and may be signed as
soon as Wednesday, the person said, speaking on condition of anonymity
because the talks are private.”

It further adds “As part of the agreement, the US and Ukraine will seek to create the
conditions to ‘increase investment in mining, energy, and related
technology in Ukraine.’ Washington also acknowledges Kyiv’s intentions for the
deal to avoid any conflict with its plans to join the European Union (
long seen as a red line for Ukraine in the talks).

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

• Prior -12.7%
• Market index 223.7 vs 233.5 prior
• Purchase index 146.6 vs 153.4 prior
• Refinance index 649.0 vs 673.6 prior
• 30-year mortgage rate 6.89% vs 6.90% prior

This is never a market moving release. Of course, as long term interest
rates rise, mortgage applications fall. The mortgage market index and
the US30Y yield are inversely correlated.

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

• Prior -12.7%
• Market index 223.7 vs 233.5 prior
• Purchase index 146.6 vs 153.4 prior
• Refinance index 649.0 vs 673.6 prior
• 30-year mortgage rate 6.89% vs 6.90% prior

This is never a market moving release. Of course, as long term interest
rates rise, mortgage applications fall. The mortgage market index and
the US30Y yield are inversely correlated.

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

Bloomberg reports that companies from defence, tech, healthcare and consumer products industries as well as investment funds have been invited to attend and have their products on display in the residence’s foyer. As always, watch out for tariff related headlines and trade deals comments.

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

• Prior +2.1%
• Core CPI Y/Y 2.1% vs 1.7% prior

The agency notes: “The increase of the growth on annual basis of All-item index was mainly
due to the prices of Regulated energy products (from +27.2% to +32.9%),
of Services related to transport (from +1.6% to +4.4%), of Unprocessed
food (from +3.3% to +4.2%) and of Processed food including alcohol (from
+1.9% to +2.3%). On the contrary, the prices of Non-regulated energy
products (from +0.7% to -2.9%) and of Tobaco (from +4.6% to +3.4%)
slowed down.”

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

• Prior +0.2%
• GDP Q1 Y/Y +1.2% vs +1.1% expected
• Prior +1.2%

Economists expected an improvement due to tariff-driven frontloading after companies and consumers in the US stockpiled European goods before the tariffs started.

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

• China needs to adapt to changing situations.
• Urges measures to stabilize employment, markets and expectations.
• China to adjust economic plan based on global change.
• To promote transformation of traditional industries.
• We will study and roll out a batch of balanced and accessible policy measures for people’s livelihoods.

There’s nothing new here. Chinese officials continue to repeat the same old stuff but we haven’t really seen any strong action yet.

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