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- ECB’s Rehn: ECB shouldn’t rule out larger interest rate cut
- Russia says Zelensky has categorically refused to make any concessions
- Germany April Ifo business climate index 86.9 vs 85.2 expected
- China Commerce Ministry: There haven’t been trade negotiations between China and US
- China’s Guo: China will fight tariff war if we must
- France April consumer confidence 92 vs 91 expected
- Nomura sees the SNB returning to negative rates in the next quarter
- What are the main events for today?
- Xi says China willing to work with other countries to uphold international trade rules
- Germany says that Plan A is still to agree to reduction of tariffs with the US
- FX option expiries for 24 April 10am New York cut
It’s been a relatively quiet session in terms of news releases. The highlights were the comments from Chinese officials demanding US to drop tariffs unilaterally before seeking deals. We saw Trump slowly caving in and he’s likely to keep doing it given the damage to the US economy if he does nothing.
I also saw a nice take from a supply chain management executive warning that in case we get a rollback of tariff hikes on China, it could create an “insane surge in pricing and covid level logistics bottlenecks” in freight shipping (which have collapsed recently). This is definetely something that the market will likely price in once we get the catalyst.
In the markets, we had a bit of a reversal of yesterday’s moves that got triggered by positive Trump’s comments late Tuesday. The S&P 500 and the Nasdaq filled their gaps, the US Dollar erased most of the gains, gold is slowly edging back higher and Treasury yields are falling.
In the American session, the US Jobless Claims will be the main highlight but unless we get a surprise spike above the 260K level, the market will likely ignore the data. The focus remains on tariff related news.
This article was written by Giuseppe Dellamotta at www.forexlive.com.