Key Highlights

• 🔄 Markets found footing by Friday, despite ongoing volatility from mixed tariff headlines.
• 📅 A pivotal week ahead, packed with major economic releases and key developments in trade negotiations.



Market Recap:

Markets ended Friday on a cautious note, with little major movement as traders avoided taking large positions ahead of the weekend. Early optimism had lifted sentiment after reports surfaced that China may suspend its 125% tariffs on certain US goods. However, without firm confirmation or additional developments, investors remained hesitant. This reflects a broader market trend of waiting for clearer signals on trade progress before committing to riskier assets.

Today’s Market Overview:

It’s a crucial week ahead for both the US and Europe, packed with major data releases. In the Eurozone, GDP is forecast to rise by 0.2% for Q1, but optimism may be muted as the threat of new US tariffs clouds the economic outlook. Inflation data is also due, with headline inflation expected to dip slightly, while core inflation edges higher.

In the US, GDP is anticipated to slow sharply—from 2.4% in Q4 to just 0.3% in Q1. Other key indicators like ISM manufacturing are expected to show further contraction, while Friday’s jobs report is likely to reveal a softer labour market with only 125,000 jobs added and unemployment steady at 4.2%. Weak job data could fuel bets on earlier Fed rate cuts, adding downside pressure to the dollar.

Market Moves:

• US equities ended last week higher, with the S&P 500 gaining 4.6% as optimism returned over a possible easing of Trump's tariff policies. However, futures have slipped slightly overnight after reports that a major Chinese fast fashion retailer hiked prices sharply ahead of potential new tariffs.
• Asian equities mostly closed higher, supported by trade deal optimism, although Chinese markets lagged amid slow progress on tariff talks and stimulus plans.
• The Bloomberg Dollar Index ended the week stronger, aided by a reduction in institutional USD short positions, especially against JPY, EUR, and GBP.

Key Events This Week:

• Canadian elections today
• US JOLTS job openings on Tuesday
• Bank of Japan policy meeting on Thursday
• US Nonfarm Payrolls on Friday

Trade and Geopolitics:

• US officials continue to strike a softer tone on tariffs, hinting at positive progress with India, Vietnam, Japan, and Korea. However, China denies any active negotiations, keeping US-China tensions elevated.
• On the geopolitical front, Trump intensified criticism of Russia’s strikes on Ukraine, although praised Zelenskiy during a meeting at the Vatican. Talks toward a ceasefire remain fragile, with potential updates expected around Russia’s Liberation Day (May 9–10).

Key Takeaways:

• 📈 Watch for potential volatility from US GDP, ISM, and jobs data.
• 🌍 Tariff and trade developments remain a major driver for sentiment—how might this impact your global investments?
• 🔥 Geopolitical risks around Ukraine and Russia could cause sharp moves in risk assets—are you prepared?
• 💵 Stronger USD last week—could softer US data reverse the trend?

28th April 2025

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