Articles

• Prior -0.2%
• GPD Q1 Y/Y -0.2% vs -0.2% prior

The agency notes “The gross domestic product (GDP) grew by 0.2% in the first quarter of
2025 compared with the fourth quarter of 2024 – following adjustment for
price, seasonal and calendar variations – after decreasing at the end
of 2024 (-0.2% in the fourth quarter of 2024 compared with the third
quarter of 2024). The Federal Statistical Office (Destatis) also reports that both household final consumption expenditure and capital formation were higher than in the previous quarter.”

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

• Prior +0.1%
• GDP Y/Y +0.6% vs +0.4% y/y expected
• Prior +0.6%

The agency notes “The first quarter of 2025 has had one working day less with respect
to the previous quarter and two working days less than the same quarter
of previous year.

The quarter on quarter change is the result of an increase of value
added in both agriculture, forestry and fishing and industry, whereas
the contribution of services was null. From the demand side, there is a
positive contribution by the domestic component (gross of change in
inventories) and a negative one by the net export component.”

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

• Prior 26k
• Unemployment rate 6.3% vs 6.3% expected
• Prior 6.3%

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

• French Finance Minister Lombard says he discussed idea of reciprocal zero tariffs with Scott Bessent, and Bessent told him this was not unrealistic.

This would be great news if we eventually get to such resolution. The market meanwhile continues to rally on positive expectations as the de-escalation remains the trend.

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

Prior 103.9 (revised to 103.2)

No surprise here as business confidence got hit all over the world after the April 2 announcement. You can see in the chart below how the business confidence just kept on improving steadily with the SNB rate cuts. Now that we have the trade war uncertainty and global growth slowdown expectations, the confidence is falling.

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

IC Markets Europe Fundamental Forecast | 30 April 2025

What happened in the Asia session?

Chinese manufacturing activity contracted more sharply than anticipated in April, as official data released Wednesday showed the sector was hit hard by a steep decline in overseas orders following the imposition of aggressive U.S. trade tariffs. The official manufacturing purchasing managers’ index (PMI) dropped to 49.0 in April, missing forecasts of 49.7 and falling from 50.5 in March. A reading below 50 signals contraction, marking a reversal after two months of recovery and the fastest pace of decline since early 2023.

This downturn coincided with an escalation in the trade war between China and the United States. In April, President Donald Trump imposed cumulative tariffs of 145% on Chinese imports, with some product categories facing total tariffs as high as 245%. China retaliated by raising tariffs on American goods to 125%. These measures severely disrupted trade flows, leading to a notable drop in new business orders and a sharp reduction in export shipments to the U.S., a key market for Chinese manufacturers.

The impact of these tariffs was immediate: Chinese factories, which had previously ramped up exports in anticipation of the new duties, saw demand from the U.S. plummet once the tariffs took effect. This contraction in manufacturing activity highlights the vulnerability of China’s export-driven recovery and underscores the broader economic risks posed by the ongoing trade conflict.

What does it mean for the Europe & US sessions?

Consumer prices in Germany have moderated lower over the past few months, especially for core CPI which has eased from an annual rate of 3.3% in December to 2.6% in March. Should inflationary pressures continue to dissipate further, the Euro could face some near-term headwinds on Wednesday.

The Liberal party’s win at the recent Canadian elections marked a fourth successive mandate with Mark Carney resuming his role as prime minister after having replaced Justin Trudeau as leader of the Liberals just two months ago. This victory signalled an unexpected comeback for the Liberal party whose popularity had tanked under the leadership of Trudeau. Meanwhile, monthly GDP growth is expected to remain flat in February following a relatively strong gain of 0.4% in January. The ongoing tariff negotiations continue to cloud the outlook for many economies, including Canada, and growth output could take a hit over the next few months.

The Dollar Index (DXY)

Key news events today

ADP Employment Report (12:15 pm GMT)

GDP (12:30 pm GMT)

What can we expect from DXY today?

After rebounding strongly in March, private payroll growth is expected to moderate in April. Private payrolls had jumped from 84k in the previous month to 155k in March as sectors such as professional and business services, financial activities, leisure and hospitality, education and health services, led the gains. The ADP is expected to show 114k jobs being added to the private sector while U.S. GDP growth is anticipated to slow significantly in the first quarter of this year. After expanding at an annual rate of 2.5% in the final quarter of last year, economic activity is now forecast to grow at just 0.2% – a figure weighed heavily by the ongoing trade policy uncertainties between the U.S. and its key trading partners.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 19 March 2025
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run but uncertainty around the economic outlook has increased; the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while the unemployment rate has stabilized at a low level in recent months, and labour market conditions remain solid. However, inflation remains somewhat elevated.
• GDP growth forecasts were revised downward for 2025 (1.7% vs. 2.1% in the December projection) while PCE inflation projections have been adjusted slightly higher for 2025, with core inflation expected to reach 2.5%, partly due to tariff-related pressures.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and is prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.
• Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25B to $5B while maintaining the monthly redemption cap on agency debt and agency mortgage-backed securities at $35B.
• The next meeting is scheduled for 6 to 7 May 2025.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

ADP Employment Report (12:15 pm GMT)

GDP (12:30 pm GMT)

What can we expect from Gold today?

After rebounding strongly in March, private payroll growth is expected to moderate in April. Private payrolls had jumped from 84k in the previous month to 155k in March as sectors such as professional and business services, financial activities, leisure and hospitality, education and health services, led the gains. The ADP is expected to show 114k jobs being added to the private sector while U.S. GDP growth is anticipated to slow significantly in the first quarter of this year. After expanding at an annual rate of 2.5% in the final quarter of last year, economic activity is now forecast to grow at just 0.2% – a figure weighed heavily by the ongoing trade policy uncertainties between the U.S. and its key trading partners.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

CPI (1:30 am GMT)

What can we expect from AUD today?

Although consumer inflation in Australia remained unchanged at an annual rate of 2.4% in the first quarter of 2025, it exceeded the market forecast of 2.3%. On a quarterly basis, inflation surged from 0.2% in the previous quarter to 0.9%, coming in higher than the 0.8% estimate. This ‘hot’ CPI print will likely light a fire under the Aussie, driving it higher as the day progresses.

Central Bank Notes:

• The RBA maintained the cash rate at 4.10% on 1 April, following a 25-basis point reduction on 18 February.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance.
• Recent information suggests that underlying inflation continues to ease in line with the most recent forecasts published in the February Statement on Monetary Policy.
• Private domestic demand appears to be recovering, real household incomes have picked up and there has been an easing in some measures of financial stress. However, businesses in some sectors continue to report that weakness in demand makes it difficult to pass on cost increases to final prices.
• At the same time, a range of indicators suggest that labour market conditions remain tight. Despite a decline in employment in February, measures of labour underutilisation are at relatively low rates and business surveys and liaison suggest that availability of labour is still a constraint for a range of employers. Wage pressures have eased a little more than expected but productivity growth has not picked up and growth in unit labour costs remains high.
• There are notable uncertainties about the outlook for domestic economic activity and inflation. The central projection is for growth in household consumption to continue to increase as income growth rises. But there is a risk that any pick-up in consumption is slower than expected, resulting in continued subdued output growth and a sharper deterioration in the labour market than currently expected.
• Uncertainty about the outlook abroad also remains significant. On the macroeconomic policy front, recent announcements from the U.S. on tariffs are having an impact on confidence globally and this would likely be amplified if the scope of tariffs widens, or other countries take retaliatory measures. Geopolitical uncertainties are also pronounced.
• The Board’s assessment is that monetary policy remains restrictive and the continued decline in underlying inflation is welcome, but there are nevertheless risks on both sides and the Board is cautious about the outlook.
• The Board will rely upon the data and the evolving assessment of risks to guide its decisions and is resolute in its determination to sustainably return inflation to target and will do what is necessary to achieve that outcome.
• The next meeting is on 20 May 2025.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

After a strong rally last week, the Kiwi looks to have run out of steam over the past couple of days as it dipped under 0.5950. Overhead pressures could continue to build on Wednesday as this currency pair slid toward 0.5900 at the beginning of the Asia session.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 25 basis points bringing it down to 3.50% on 9 April, marking the fifth consecutive rate cut.
• The Committee assessed that annual consumer price inflation remains near the midpoint of the MPC’s 1 to 3% target band while firms’ inflation expectations and core inflation are consistent with inflation remaining at target over the medium term.
• Economic activity has evolved largely as expected since the February Monetary Policy Statement; higher-than-expected export prices and a lower exchange rate have supported primary sector incomes and overall economic growth.
• Although monetary restraint had been removed at pace, household spending and residential investment have remained weak.
• The recently announced increases in global trade barriers weaken the outlook for global economic activity. On balance, these developments create downside risks to the outlook for economic activity and inflation.
• The Committee noted that the increase in tariffs will take time to work through the global economy, but the direct price increases for economies imposing tariffs and the dampening impact of increased economic uncertainty on global demand will occur relatively quickly.
• With CPI inflation close to the mid-point of the target range, significant spare capacity in the economy, and a weaker activity outlook stemming from global trade policy, the Committee agreed that a further reduction in the OCR was appropriate.
• Meanwhile, future policy decisions will be determined by the outlook for inflationary pressure over the medium term.
• The next meeting is on 28 May 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

Retail Sales (11:50 pm GMT 29th April)

What can we expect from JPY today?

Consumer spending in Japan increased at an annual rate of 3.1% in March following a downwardly revised 1.3% growth in the previous month, but below market expectations of 3.5%. This report marked the 36th straight month of expansion in retail sales, with rising wages continuing to support consumption. Sales grew for categories such as fuel, automobile, machinery and equipment, clothing and personal goods, and food and beverage. However, demand for the yen has dampened since last week, causing USD/JPY to hover around 142.50 over the last couple of days.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 19 March, by a unanimous vote, to maintain the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will continue its plan to reduce the amount of its monthly outright purchases of JGBs, aiming to reach about 3 trillion yen by January-March 2026.
• Japan’s economy has continued to recover moderately, with some sectors showing improvement. Exports and industrial production have remained relatively stable, while corporate profits continue on an improving trend and business sentiment maintains a favourable level.
• The employment and income situation has shown moderate improvement, with private consumption on a moderately increasing trend despite ongoing impacts from price rises.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 3.0-3.5% recently. Services prices continue to rise moderately, reflecting factors such as wage increases, while the effects of cost pass-through from past import price rises have diminished.
• Inflation expectations have continued to rise moderately, with underlying CPI inflation gradually increasing toward the price stability target of 2%. The virtuous cycle between wages and prices continues to strengthen, with businesses increasingly reflecting higher costs in selling prices.
• Japan’s economy is expected to maintain growth above its potential rate, supported by moderately growing overseas economies and the intensifying virtuous cycle from income to spending, underpinned by accommodative financial conditions.
• The next meeting is scheduled for 1 May 2025.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

Germany CPI (Tentative)

What can we expect from EUR today?

Consumer prices in Germany have moderated lower over the past few months, especially for core CPI which has eased from an annual rate of 3.3% in December to 2.6% in March. Should inflationary pressures continue to dissipate further, the Euro could face some near-term headwinds on Wednesday.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17 April to mark the sixth successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.40%, 2.65% and 2.25% respectively.
• The disinflation process is well on track with both headline and core inflation declining in March while services inflation has also eased markedly over recent months. Most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis.
• Wage growth is moderating, and profits are partially buffering the impact of still elevated wage growth on inflation. The euro area economy has been building up some resilience against global shocks, but the outlook for growth has deteriorated owing to rising trade tensions.
• Increased uncertainty is likely to reduce confidence among households and firms, and the adverse and volatile market response to the trade tensions is likely to have a tightening impact on financing conditions. These factors may further weigh on the economic outlook for the euro area.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The Governing Council is determined to ensure that inflation stabilises sustainably at its 2% medium-term target. Especially in current conditions of exceptional uncertainty, it will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.
• In particular, the Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
• The next meeting is on 5 June 2025.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The Swiss franc has given up some of last week’s gains as it reversed off last week’s lows at 0.8046 to briefly climb above 0.8300 on Monday. This currency pair was floating around 0.8230 as Asian markets came online but it could continue to grind higher as demand for safe-haven assets begin to wane.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, from 0.50% to 0.25% on 20 March 2025, marking the fifth consecutive reduction.
• Underlying inflationary pressure has decreased further this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected, decreasing from 0.7% in November to 0.3% in February, primarily due to lower electricity prices.
• In the shorter term, the new conditional inflation forecast is slightly higher than December: 0.3% for Q2 2025, 0.4% for 2025 overall, and 0.8% for 2026 and 2027, based on the assumption that the SNB policy rate remains at 0.25% over the entire forecast horizon.
• GDP growth in Switzerland remains moderate, with the services sector continuing to show slightly stronger growth, while manufacturing faces challenges.
• The SNB anticipates GDP growth of around 1.0% to 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 19 June 2025.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable made a high of 1.3443 on Tuesday before falling below 1.3400. After rallying 3.8% over the past three weeks, traders could now be looking to book profits on this currency pair. Headwinds for the pound are building and we could see Cable drift lower on Wednesday.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to maintain the Bank Rate at 4.50% on 19 March 2025, while one member preferred to reduce it by 25 basis points (bps).
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Twelve-month CPI inflation increased to 3.0% in January from 2.5% in December, slightly higher than expected in the February Report; domestic price and wage pressures are moderating, but remain somewhat elevated.
• Although global energy prices have fallen back recently, they remain higher than last year and CPI inflation is still projected to rise to around 3.75% in 2025 Q3. While CPI inflation is expected to fall back thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• While UK GDP growth estimates have been slightly stronger than expected at the time of the February Monetary Policy Report, business survey indicators generally continue to suggest weakness in growth and particularly in employment intentions. In recent quarters, subdued activity has been judged to reflect both demand and supply factors.
• The labour market had continued to ease, although it was still judged to be broadly in balance – some indicators of employment intentions had deteriorated markedly, to levels consistent with shrinking employment while other indicators, such as the number of vacancies, had not weakened to the same extent.
• Domestic price and wage pressures were moderating, but remained somewhat elevated. A range of indicators suggested that underlying pay growth had eased further in recent months, although annual growth in private sector regular average weekly earnings had picked up to 6.1% in the three months to January.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

GDP (12:30 pm GMT)

What can we expect from CAD today?

The Liberal party’s win at the recent Canadian elections marked a fourth successive mandate with Mark Carney resuming his role as prime minister after having replaced Justin Trudeau as leader of the Liberals just two months ago. This victory signalled an unexpected comeback for the Liberal party whose popularity had tanked under the leadership of Trudeau. Meanwhile, monthly GDP growth is expected to remain flat in February following a relatively strong gain of 0.4% in January. The ongoing tariff negotiations continue to cloud the outlook for many economies, including Canada, and growth output could take a hit over the next few months.

Central Bank Notes:

• The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70% – marking the first pause after seven consecutive meetings where rates were reduced.
• The major shift in direction of U.S. trade policy and the unpredictability of tariffs have increased uncertainty, diminished prospects for economic growth, and raised inflation expectations.
• Pervasive uncertainty makes it unusually challenging to project GDP growth and inflation in Canada and globally – the April Monetary Policy Report (MPR) presents two scenarios that explore different paths for US trade policy.
• In the first scenario, uncertainty is high but tariffs are limited in scope – Canadian growth weakens temporarily and inflation remains around the 2% target. In the second scenario, a protracted trade war causes Canada’s economy to fall into recession this year and inflation rises temporarily above 3% next year.
• Global economic growth was solid in late 2024 and inflation has been easing towards central bank targets. However, tariffs and uncertainty have weakened the outlook. In the U.S., the economy is showing signs of slowing amid rising policy uncertainty and rapidly deteriorating sentiment, while inflation expectations have risen. In the Euro Area, growth has been modest in early 2025, with continued weakness in the manufacturing sector. China’s economy was strong at the end of 2024 but more recent data shows it slowing modestly.
• In Canada, the economy is slowing as tariff announcements and uncertainty pull down consumer and business confidence. Consumption, residential investment and business spending all look to have weakened in the first quarter. Trade tensions are also disrupting recovery in the labour market. Employment declined in March and businesses are reporting plans to slow their hiring. Wage growth continues to show signs of moderation.
• The Governing Council will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs while proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy.
• Monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war and the Governing Council will focus on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval by supporting economic growth while ensuring that inflation remains well-controlled.
• The next meeting is on 4 June 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

After falling sharply by 4.6M in the prior week, the API stockpiles gained 3.8M barrels of crude in the latest report to signal weaker demand for oil in the United States. Coupled with a dampened outlook for global demand due to the ongoing trade policy uncertainties, oil prices fell swiftly this week. WTI oil tumbled over 5% since Monday and prices for this benchmark were slipping toward the $60 mark. Should the EIA report also continue to build and register a fifth successive week of rising inventories, this commodity will face even stronger headwinds.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 30 April 2025 first appeared on IC Markets | Official Blog.

• Prior +0.9%

The agency notes “This new rise in prices should be explained by the increase in services
prices, in particular transport, and food. Conversely, energy prices should fall again
in April, while prices of manufactured products and tobacco should remain virtually
unchanged over the month.”

Inflation hasn’t been a problem for France for a long time and that’s also why you’ve been hearing the French ECB policymaker Villeroy delivering dovish takes and supporting rate cuts.

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

Chinese markets will be closed from tomorrow (1 May) until Monday next week (5 May), in observance of Labor Day. However, that won’t halt any plays on US-China trade relations. But as things stand, we’re not seeing either side be willing to pick up the phone. In any case, we should be seeing a bit more of a quiet period from China during the interim – barring any prerecorded remarks fed to the state media. The question is, will Trump use this down time to push his own agenda?

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

• Prior +0.3%

The bulk of the decline owes to energy prices. If you strip that out, import prices were only seen down 0.3% on the month. Looking at the breakdown, there were also falls in prices for intermediate goods (-0.4%) and capital goods (-0.4%).

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

• 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.