HFMarkets (hfm.com): Market analysis services.

[HFM]

Date: 26th March 2025.

 

GBP Comes Under Pressure From Tough Budget and Low Inflation!

 

The British Pound is one of the worst-performing currencies of the day. The poor performance is due to pressure from low Inflation and what investors expect to be a tough budget. Why is the UK announcing a stricter budget and for how long will there be pressure on the GBP? Let’s find out!

Reasons Investors Are Cautious About The New UK Budget

The Pound has fallen 0.32% against the USD and more than 0.50% against the Australian and Canadian Dollar. The Pound is not the worst-performing currency of the day yet, but if the GBPJPY continues to decline as it has over the past hour, the GBP will be at the bottom of the table.

The downward momentum is due to the inflation rate which fell from 3.00% to 2.8%. Previously investors were expecting the rate to remain at 3.00%. Many investors fear the fall in inflation is due to weak economic growth and struggling consumer demand. If this continues to be the case, the Bank of England is likely to consider a rate cut.

 

GBPUSD 30-Minute Chart on March 26th

 

The Confederation of British Industry (CBI) released its retail sales index for March today, showing a decline from -23.0 to -43.0, the lowest level in eight months, compared to the initial forecast of -28.0. According to CBI experts, businesses in the retail and wholesale sectors are experiencing pressure from global trade challenges, while the new government budget, which entails a substantial rise in debt, is further straining demand.

Another key factor contributing to the Pound’s downfall is the UK’s budget and the chancellor's speech. The new UK budget will be released today and the Chancellor will speak in parliament at 12:30 GMT. Investors fear that the chancellor will announce further austerity measures and cuts to the budget. This is mainly in order to spend more on defence and adjust the budget to the weaker economic performance.

The chancellor has also stated that 10,000 public sector jobs may be eliminated, with additional savings potentially coming from changes in the accounting treatment of billions of pounds reallocated from overseas aid to the defence budget.

The question that traders are asking is whether the Pound will continue to decline. This will primarily depend on how strict the budget is, the chancellor's growth projections and how the bond market reacts. Nonetheless, the technical analysis continues to provide a bearish and dim bias for the upcoming 24 hours.

GBPUSD - Technical Analysis Points Towards A Weakening GBP

The GBPUSD has now been declining since 18:00 GMT Tuesday and failed to form a higher high. Therefore price action is partially indicating downward price movement and this signal will likely strengthen if the price falls below 1.29011. The price is also trading below the 75-bar EMA, 100-bar SMA and below the neutral level of the RSI. These factors also strengthen the bearish bias of the currency exchange.

The US Dollar index is currently trading higher this morning but traders will monitor how the index will react to the European open. This is because the index has fallen 0.08% since the European Cash Open. Nonetheless, the momentum continues to remain mainly in favour of the Dollar. The only concern for traders is the support level at 1.29011.

 

USDX (US Dollar Index) 30-Minute Chart on March 26th

 

Key Takeaway Points:

1. Pound Weakness: The British Pound is struggling due to lower inflation and budget concerns.
2. Retail Sales Drop: The CBI retail index hit an eight-month low, signalling economic strain.
3. Austerity Fears: Investors worry about public sector cuts and defence spending shifts. The bond market reaction will be key for the Pound.
4. Bearish GBP Outlook: Technical indicators suggest further decline, pending budget impact.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Michalis Efthymiou

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 27th March 2025.

 

SNP500 Erases Gains as Trump’s Aggressive Trade Policy Shakes Markets

 

The SNP500 fell 1.35% on Wednesday wiping off the gains from the week. The decline is primarily due to fears of the upcoming US trade policy on April 2nd and beyond. In the President’s latest speech investors heard Trump confirm he looks to tax foreign cars with 25% tariffs and will add retaliation tariffs on Canada and the EU if they look to retaliate.

The US Latest Comments On Global Trade

The main concern for investors is the US President’s latest comments on the EU potentially collaborating with Canada. The two countries are aiming to push the US into a more favourable trade agreement. Donald Trump states that “if the EU works with Canada in order to do economic harm to the USA, large scale tariffs far larger than currently planned will be placed on both”.

Up to now, both Canada and the EU have advised markets that they will retaliate. As a result, investors fear how these policies can trigger lower consumer demand, higher inflation and even a potential recession. The latest consumer confidence fell for the fourth day to 92.9, missing the 94.2 forecast. The economic outlook dropped to 65.2, a 12-year low, staying below the 80.0 recession warning level. However, the Federal Reserve so far in 2025 is advising the US economy remains stable despite the uncertainties.

Furthermore, the US confirms they intend to impose a 25% tariff on all car imports and essential parts, including engines, transmissions, and electrical components. Many countries have already voiced their concerns over this decision.

 

Where Automakers Build Cars Sold in America

 

The Federal Reserve and Inflation

Chicago Fed President Austan Goolsbee stated yesterday that policymakers may postpone monetary easing for 12 to 18 months due to market uncertainty. He also continues warning that rising inflation expectations could complicate efforts to slow it down.

Another member to voice concerns is Alberto Musalem, a US economist and banker. The risk of US inflation remaining above the Fed’s 2% target, or even increasing, continues to grow, with higher import taxes potentially driving sustained price pressures. In the latest month, US inflation fell from 3.00% to 2.8% which is positive for the stock market, but only if it continues to fall towards 2.00%. There is currently only a 10% chance of an interest rate cut in May 2025 according to the Chicago Exchange.

Economists advise the upcoming data will be vital and can significantly influence the risk appetite of the market. Traders will be focusing on today’s Final US GDP and tomorrow's Core PCE Price Index. If tomorrow’s PCE Price Index reads more than 0.3%, the stock market could quickly witness renewed pressure.

SNP500 (USA500) - Technical Analysis

Regardless of the above fundamental factors which are triggering the recent decline, the SNP500 has risen 0.35% during this morning’s Asian session. The bullish corrective wave currently measures 40% of yesterday’s bearish impulse wave. Though traders should also note that global indices including within the EU and Asia are continuing to decline.

 

SNP500 (USA100) 1-Hour Chart

 

The price in a 15-minute timeframe remains below most trend lines and Moving Averages. In addition to this, the price is again dropping below the neutral level of the RSI and the VWAP. If the price regains downward momentum and falls below $5,701.98, many traders may consider bearish momentum to be regaining ground. At this point, sell signals potentially can materialize.

Further adding to the indications of downward price movement is the VIX index which is currently trading 0.60% higher. The higher the VIX index the lower the appetite there is towards the US stock market. Lastly, the US 10-Year Treasury Yields continue to rise adding further pressure on the stock market. The 10 Year Treasury Yields are currently trading 25 points higher.

Key Takeaway Levels:

• The SNP500 dropped 1.35% as investors reacted to fears surrounding the upcoming US trade policy changes on April 2nd. This includes a potential 25% tariff on foreign cars and retaliatory tariffs against Canada and the EU.
• Fed officials warn that inflation risks remain high, with import tariffs potentially driving further price pressures.
• Inflation recently fell to 2.8%, but concerns persist about whether it will reach the Fed’s 2% target.
• Traders are closely monitoring upcoming US GDP and Core PCE Price Index data. If PCE exceeds 0.3%, stocks could face renewed pressure.
• Despite a slight rebound in the SNP500, indicators like RSI, VWAP, and the rising VIX index suggest bearish momentum could return, particularly if the index falls below $5,701.98.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Michalis Efthymiou

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 28th March 2025.

 

Market Selloff Deepens as Tariff Concerns Weigh on Investors

 

 

Global stock markets extended their losing streak for a third day as concerns over looming US tariffs and an escalating trade war dampened investor sentiment. The flight to safety saw gold prices surge to a record high, underscoring growing risk aversion.

Stock Selloff Intensifies

The MSCI World Index recorded its longest losing streak in a month, while Asian equities saw their sharpest decline since late February. US and European stock futures also signalled potential weakness, while cryptocurrency markets retreated and bond yields edged lower.

Investors are scaling back their exposure ahead of President Donald Trump’s expected announcement of ‘reciprocal tariffs’ on April 2. His latest move to impose a 25% levy on all foreign-made automobiles has sparked fresh concerns over inflation and economic growth, prompting traders to reassess their strategies.

Investor Strategies Shift

Market experts are adjusting their portfolios in anticipation of heightened volatility. ‘It’s impossible to predict Trump’s next move,’ said Xin-Yao Ng of Aberdeen Investments. ‘Our focus is on companies that are less vulnerable to tariff policies while taking advantage of market dips to find value opportunities.’

Yield Curve Signals Economic Concerns

In the bond market, the spread between 30-year and 5-year US Treasury yields widened to its highest level since early 2022. Investors are bracing for potential Federal Reserve rate cuts if economic growth slows further.

Long-term Treasury yields hit a one-month peak as inflation risks tied to tariffs spurred demand for higher-yielding assets. Boston Fed President Susan Collins noted that while tariffs may contribute to short-term price increases, their long-term effects remain uncertain.

Gold Hits Record High as Safe-Haven Demand Rises

Amid market turbulence, gold prices soared 0.7% on Friday, reaching an all-time high of $3,077.60 per ounce. Major banks have raised their price targets for the precious metal, with Goldman Sachs now forecasting gold to hit $3,300 per ounce by year-end.

Looking Ahead

As investors digest economic data showing US growth acceleration in Q4, attention will turn to Friday’s release of the personal consumption expenditures (PCE) price index—the Federal Reserve’s preferred inflation measure. This data will be critical in shaping expectations for future Fed policy moves.

With markets on edge and trade tensions escalating, investors will closely monitor upcoming developments, particularly Trump’s tariff announcement next week, which could further dictate market direction.

 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Andria Pichidi

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 31st March 2025.

 

Trump Confirms Tariffs on All Countries, Sending Stocks Lower.

 

The NASDAQ continues to trade lower due to the US confirming the latest tariffs will be on all countries. In addition to this, bearish volatility also is largely due to the higher inflation data from Friday. The NASDAQ declines to its lowest price since September 11th 2024.

Core PCE Price Index - Inflation Increases Again!

The PCE Price Index read 2.5% aligning with expert forecasts not triggering any alarm bells. However, the Core PCE Price Index rose from 0.3% to 0.4% MoM and from 2.7% to 2.8% YoY, signalling growing inflationary pressure. This increases the likelihood that the Federal Reserve will maintain elevated interest rates for an extended period. The NASDAQ fell 2.60% due to the higher inflation reading which is known to pressure the stock market due to pressure on consumer demand and a more hawkish Federal Reserve.

Boston Fed President Susan Collins recently commented that tariffs could drive up inflation, though the long-term impact remains uncertain. She told journalists that a short-term spike is the most probable outcome but believes the current pause in monetary policy adjustments is appropriate given the prevailing uncertainties.

Although, certain investment banks such as JP Morgan actually believe the Federal Reserve will be forced into cutting rates. This is due to expectations that the economy will struggle under the new trade policy. For example, JP Morgan expects the Federal Reserve to delay rate cuts but will quickly cut towards the end of 2025.

Market Risk Appetite Takes a Hit!

A big factor for the day is the drop in the risk appetite of investors. This can be seen from the VIX which is up almost 6%, Gold which is trading 1.30% higher and the Japanese Yen which is the day’s best performing currency. Most safe haven assets, bar the US Dollar, increase in value. It is also worth noting that all indices are decreasing in value during this morning's Asian session with the Nikkei225 and NASDAQ witnessing the strongest decline.

Previously the stock market rose in value as investors heard rumours that tariffs would only be on certain countries. This bullish swing occurred between March 14th and 25th. Over the weekend, President Donald Trump indicated that the upcoming tariffs would apply to all countries, not just those with the largest trade imbalances with the US.

NASDAQ - Technical Analysis

In terms of technical analysis, the NASDAQ continues to obtain indications that sellers control the price action. The price opens on a bearish price gap measuring 0.30% and trades below all Moving Averages on all timeframes. The NASDAQ also trades below the VWAP and almost 100% of the most influential components (stocks) are declining in value.

 

 

The next significant support level is at $18,313, and the resistance level stands at $20,367.95.

Key Takeaway Points:

1. NASDAQ falls to its lowest since September 2024 as the US confirms tariffs on all countries, adding to inflation concerns.
2. Core PCE inflation rises to 0.4% MoM and 2.8% YoY, increasing the likelihood of prolonged high interest rates.
3. Investor risk appetite drops as VIX jumps 6%, gold gains 1.3%, and safe-haven assets outperform.
4. NASDAQ shows strong bearish momentum, trading below key technical levels with support at $18,313 and resistance at $20,367.95.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Michalis Efthymiou

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 1st April 2025.

 

Will Gold’s Rally Hold Strong as New Trade Tariffs Take Effect Tomorrow?

 

Gold continues to increase in value for a sixth consecutive day and is trading more than 17% higher in 2025. Amid fear of higher inflation, a recession and the tariffs war escalating investors continue to invest into Gold pushing demand higher. The trade policy from April 2nd onwards continues to be a key factor for the whole market. Can Gold maintain its upward trend?

Trade Policy From Tomorrow Onwards

Starting as soon as tomorrow, a 25% tariff will be imposed on all passenger cars imported into the United States. While this White House policy is anticipated to negatively affect European industrial performance, it will also lead to higher transportation and maintenance costs for everyday American taxpayers. The negative impact expected on both the EU and US is one of the reasons investors continue to buy Gold.

Additionally, last month, President Donald Trump announced reciprocal sanctions against any trade partners that impose import restrictions on US goods. Furthermore, tariffs on products from Canada and the EU could increase even more if they attempt to coordinate a response.

Overall, investors continue to worry that new trade barriers will prompt retaliatory measures, particularly from China, the Eurozone, and Japan. Any retaliation is likely to escalate the trade conflict and prompt another reaction from the US. Experts at Goldman Sachs and other investment banks warn that this will lead to rising inflation and unemployment. They also caution that it could effectively halt economic growth in the US.

 

XAUUSD 1-Hour Chart

 

The Weakness In The US Dollar

Another factor which is allowing the price of XAUUSD to increase in value is the US Dollar which has been unable to maintain any bullish momentum. Despite last week’s Core PCE Price Index rising to its highest level since February 2024, the US Dollar has been unable to see any significant rise in value. Due to the US Dollar and Gold's inverse correlation, the price of Gold is benefiting from the Dollar weakness.

Investors worry that new trade barriers will prompt retaliatory measures from China, the Eurozone, and Japan, potentially escalating the conflict. Experts at The Goldman Sachs Group Inc. believe that such actions by the US administration will drive rising inflation and unemployment while effectively halting economic growth in the country.

Can Gold Maintain Momentum?

When it comes to technical analysis, the price of Gold is not trading at a price where oscillators are indicating the instrument is overbought. The Relative Strength Index currently trades at 68.88, outside of the overbought area, since Gold’s price fell 0.65% during this morning’s session. However, even with this decline, the price still remains 0.40% higher than the day’s open price.

In terms of fundamental analysis, there continues to be plenty of factors indicating the price could continue to rise. However, the price movement of the week will also partially depend on the employment data from the US.

The US is due to release the JOLTS Job Vacancies for February this afternoon, the ADP Non-Farm Employment Change tomorrow, and the NFP Change and Unemployment Rate on Friday. If all data reads higher than expectations, investors may look to sell to lock in profits at the high price.

Key Takeaway Points:

• Gold’s Rally Continues – Up 17% in 2025 as investors seek safety from inflation, recession fears, and trade tensions.
• Trade War Impact – New US tariffs and potential retaliation from China, the EU, and Japan drive uncertainty, boosting Gold demand.
• Weak US Dollar – The Dollar’s struggle supports Gold’s rise due to their inverse correlation.
• Gold’s Outlook – Uptrend may continue, but US jobs data could trigger profit-taking.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Michalis Efthymiou

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 2nd April 2025.

 

Market on Edge: Tariff Announcement and Volatility Ahead!

 

The US economic and employment data continues to deteriorate with the job vacancies figures dropping to a 5-month low. In addition to this, the IMS Manufacturing PMI also fell below expectations. However, both the US Dollar and Gold declined simultaneously following the release of the two figures, an uncommon occurrence in the market. Traders expect a key factor to be today’s ‘liberation day’ where the US will impose tariffs on imports.

USDJPY - Traders Await Tariff Confirmation!

Traders looking to determine how the USDJPY will look today will find it difficult to determine until the US confirms its tariff plan. Today is the day when Trump previously stated he would finalize and announce his tariff plan. The administration has not yet released the policy, but investors expect it to be the most expansionary in a century. President Trump is due to speak at 20:00 GMT. On HFM's Calendar the speech is stated as "US Liberation Day Tariff Announcement".

Currently, analysts are expecting Trump’s Tariff Plan to impose tariffs on the EU, chips and pharmaceuticals later today as well as reciprocal tariffs. Economists have a good idea of how these tariffs may take effect, but reciprocal tariffs are still unspecified. In addition to this, 25% tariffs on the car industry will start tomorrow. The tariffs on the foreign cars industry are a factor which will particularly impact Japan. Although, traders should note that this is what is expected and is not yet finalised.

Last week, President Trump stated that he would implement retaliatory tariffs but allow exemptions for certain US trade partners. Treasury Secretary Mr Bessent and National Economic Council Director Mr Hassett suggested that the restrictions would primarily target 15 countries responsible for the bulk of the US trade deficit. However, yesterday, Trump contradicted these statements, asserting that additional duties would be imposed on any country that has implemented similar measures against US products.

The day’s volatility will depend on which route the US administration takes. The harshness of the policy will influence both the Japanese Yen as well as the US Dollar.

 

USDJPY 5-Minute Chart

 

US Economic and Employment Data

The JOLT Job Vacancies figure fell below expectations and is lower than the previous month’s figure. The JOLT Job Vacancies read 7.57 million whereas the average of the past 6 months is 7.78 million. The ISM Manufacturing Index also fell below the key level of 50.00 and was 5 points lower than what analysts were expecting.

The data is negative for the US Dollar, particularly as the latest release applies more pressure on the Federal Reserve to cut interest rates. However, this is unlikely to happen if the trade policy ignites higher and stickier inflation. In the Bank of Japan’s Governor's latest speech, Mr Ueda said that the tariffs are likely to trigger higher inflation.

USDJPY Technical Analysis

Currently, the Japanese Yen Index is the worst performing of the day while the US Dollar Index is more or less unchanged. However, this is something traders will continue to monitor as the EU session starts.

In the 2-hour timeframe, the USDJPY is trading at the neutral level below the 75-bar EMA and 100-bar SMA. The RSI and MACD is also at the neutral level meaning traders should be open to price movements in either direction. On the smaller timeframes, such as the 5-minute timeframe, there is a slight bias towards a bullish outcome. However, this is only likely if the latest bearish swing does not drop below the 200-Bar SMA.

 

 

The key resistant level can be seen at 150.262 and the support level at 149.115. Breakout levels are at 149.988 and 149.674.

Key Takeaway Points:

1. Job vacancies hit a five-month low, and the ISM Manufacturing PMI missed expectations, adding pressure on the Federal Reserve regarding interest rate decisions.
2. Traders await confirmation on Trump’s tariff policy, which is expected to impact the EU, chips, pharmaceuticals, and foreign car industries.
3. The severity of the tariffs will influence both the JPY and the USD, with traders waiting for final policy details.
4. The Japanese Yen Index is the worst index of the day while the US Dollar Index is unchanged.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Michalis Efthymiou

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 3rd April 2025.

 

Gold Prices Pull Back After Record High as Traders Eye Trump’s Tariffs.

 

Key Takeaways:

 

• Gold prices retreated after hitting a record high of $3,167.57 per ounce due to profit-taking.
• President Trump announced a 10% baseline tariff on all US imports, escalating trade tensions.
• Gold remains exempt from reciprocal tariffs, reinforcing its safe-haven appeal.
• Investors await US non-farm payroll data for further market direction.
• Fed rate cut bets and weaker US Treasury yields underpin gold’s bullish outlook.

Gold Prices Retreat from Record Highs Amid Profit-Taking

Gold prices saw a pullback on Thursday as traders opted to take profits following a historic surge. Spot gold declined 0.4% to $3,122.10 per ounce as of 0710 GMT, retreating from its fresh all-time high of $3,167.57. Meanwhile, US gold futures slipped 0.7% to $3,145.00 per ounce, reflecting broader market uncertainty over economic and geopolitical developments.

 

The recent rally was largely fueled by concerns over escalating trade tensions after President Donald Trump unveiled sweeping new import tariffs. The 10% baseline tariff on all goods entering the US further deepened the global trade conflict, intensifying investor demand for safe-haven assets like gold. However, as traders locked in gains from the surge, prices saw a modest retracement.

 

Trump’s Tariffs and Their Market Implications

On Wednesday, Trump introduced a sweeping tariff policy imposing a 10% baseline duty on all imports, with significantly higher tariffs on select nations. While this move was aimed at bolstering domestic manufacturing, it sent shockwaves across global markets, fueling inflation concerns and heightening trade war fears.

 

Gold’s Role Amid Trade War Escalations

Despite the widespread tariff measures, the White House clarified that reciprocal tariffs do not apply to gold, energy, and ‘certain minerals that are not available in the US’. This exemption suggests that central banks and institutional investors may continue favouring gold as a hedge against economic instability. One of the key factors supporting gold is the slowdown that these tariffs could cause in the US economy, which raises the likelihood of future Federal Reserve rate cuts. Gold is currently in a pure momentum trade. Market participants are on the sidelines and until we see a significant shakeout, this momentum could persist.

 

Impact on the US Dollar and Bond Yields

Gold prices typically move inversely to the US dollar, and the latest developments have pushed the dollar to its weakest level since October 2024. Market participants are increasingly pricing in the possibility of a Fed rate cut, as the tariffs could weigh on economic growth.

 

Additionally, US Treasury yields have plummeted, reflecting growing recession fears. Lower bond yields reduce the opportunity cost of holding non-yielding assets like gold, making it a more attractive investment.

 

 

 

 

Technical Analysis: Key Levels to Watch

Gold’s recent rally has pushed it into overbought territory, with the Relative Strength Index (RSI) above 70. This indicates a potential short-term pullback before the uptrend resumes. The immediate support level lies at $3,115, aligning with the Asian session low. A further decline could bring gold towards the $3,100 psychological level, which has previously acted as a strong support zone. Below this, the $3,076–$3,057 region represents a critical weekly support range where buyers may re-enter the market. In the event of a more significant correction, $3,000 stands as a major psychological floor.

 

On the upside, gold faces immediate resistance at $3,149. A break above this level could signal renewed bullish momentum, potentially leading to a retest of the record high at $3,167. If bullish momentum persists, the next target is the $3,200 psychological barrier, which could pave the way for further gains. Despite the recent pullback, the broader trend remains bullish, with dips likely to be viewed as buying opportunities.

 

Looking Ahead: Non-Farm Payrolls and Fed Policy

Traders are closely monitoring Friday’s US non-farm payrolls (NFP) report, which could provide critical insights into the Federal Reserve’s next policy moves. A weaker-than-expected jobs report may strengthen expectations for an interest rate cut, further boosting gold prices.

 

Other key economic data releases, such as jobless claims and the ISM Services PMI, may also impact market sentiment in the short term. However, with rising geopolitical uncertainties, trade tensions, and a weakening US dollar, gold’s safe-haven appeal remains strong.

 

Conclusion: While short-term profit-taking may trigger minor corrections, gold’s long-term outlook remains bullish. As global trade tensions mount and the Federal Reserve leans toward a more accommodative stance, gold could see further gains in the months ahead.

 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Andria Pichidi

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 4th April 2025.

 

USDJPY Falls to 25-Week Low as Safe Havens Surge and Markets Eye NFP Data.

 

Safe haven currencies and the traditional alternative to the US Dollar continue to increase in value while the Dollar declines. Investors traditionally opt to invest in the Japanese Yen and Swiss Franc at times of uncertainty and when they wish to avoid the Dollar. The Japanese Yen continues to be the best-performing currency of the week and of the day. Will this continue to be the case after today’s US employment figures?

 

USDJPY - NFP Data And Trade Negotiations

The USDJPY is currently trading at a 25-week low and is witnessing one of its strongest declines this week. The exchange rate is no longer obtaining indications from the RSI that the price is oversold. The current bullish swing is obtaining indications of divergence as the price fails to form a higher high. Therefore, short-term momentum is in favour of the US Dollar, but there are still signs the Japanese Yen can regain momentum quickly.

 

 

 

USDJPY 1-Hour Chart

 

 

The price movement of the exchange rate in both the short and long term will depend on 3 factors. Today’s US employment data, next week’s inflation rate and most importantly the progress of negotiations between the US and trade partners. If today’s Unemployment Rate increases above 4.1%, the reading will be the highest seen so far in 2025. Currently, the market expects the Unemployment Rate to remain at 4.1% and the Non-Farm Payroll Change to add 137,000 jobs. The average NFP reading this year so far has been 194,000.

 

If data does not meet expectations, US investors may continue to increase exposure away from the Dollar and to other safe-haven assets. Previously investors were expecting only 2 rate cuts this year from the Federal Reserve, however, most investors now expect up to 4. If today’s employment data deteriorates, economists advise the Federal Reserve may opt to cut interest rates sooner.

 

Therefore, it is important to note that today’s NFP will influence the USDJPY to a large extent. Whereas in the longer-term, trade negotiations will steal the spotlight. If trade partners are able to negotiate the US Dollar can correct back upwards. Whereas, if other countries retaliate and do not negotiate the US Dollar will remain weak.

 

USDJPY - The Yen and the Bank of Japan

The Japanese Yen is the best-performing currency in 2025 increasing by 6.70% so far. Risk indicators such as the VIX and High-Low Indexes continue to worsen which is positive for the JPY as a safe haven currency.

 

Yesterday Japan released March business activity data that came in weaker than expected: the Services PMI dropped from 53.7 to 50.0, while the Composite PMI fell from 52.0 to 48.9. The data is the lowest in two years. These figures could hinder further interest rate hikes by the Bank of Japan. However, most economists still expect the Bank Of Japan to hike at least once more. It's also important to note, that even if the BOJ opts for a prolonged pause, a cut is not likely.

 

Additionally, a 24% tariff was imposed on Japanese exports to the US yesterday. Prime Minister Mr Ishiba expressed disappointment over Japan's failure to secure a tariff exemption and pledged support measures to help domestic industries manage the impact.

 

Key Takeaway Points:

1. US Dollar Weakens, Safe Havens Rise: The Japanese Yen and Swiss Franc continue to gain as investors shift away from the US Dollar.
2. USDJPY Under Pressure: USDJPY trades at a 25-week low, with short-term momentum favouring the Dollar but long-term trends pointing to potential Yen strength.
3. NFP and Unemployment Crucial: Today’s Non-Farm Payrolls and unemployment figures will heavily influence short-term USDJPY. On the other hand, trade negotiations will dictate longer-term trends.
4. Japan Faces Mixed Signals: Despite weak PMI data and new US tariffs, the Japanese Yen remains strong. Economists expect at least one more rate hike from the Bank of Japan, but no cuts are in sight.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Michalis Efthymiou

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 7th April 2025.

 

Asian Markets Plunge as US-China Trade War Escalates; Wall Street Futures Signal Further Turmoil.

 

Global financial markets extended last week’s massive sell-off as tensions between the US and its major trading partners deepened, rattling investors and prompting sharp declines across equities, commodities, and currencies. The fallout from President Trump’s sweeping new tariff measures continued to spread, raising fears of a full-blown trade war and economic recession.

 

Asian stock markets plunged on Monday, extending a global market rout fueled by rising tensions between the US and China. The latest wave of aggressive tariffs and retaliatory measures has unnerved investors worldwide, triggering sharp sell-offs across the Asia-Pacific region.

 

Asian equities led the global rout on Monday, with dramatic losses seen across the region. Japan’s Nikkei 225 index tumbled more than 8% shortly after the open, while the broader Topix fell over 6.5%, recovering only slightly from steeper losses. In mainland China, the Shanghai Composite sank 6.7%, and the blue-chip CSI300 dropped 7.5% as markets reopened following a public holiday. Hong Kong’s Hang Seng Index opened more than 9% lower, reflecting deep concerns about escalating trade tensions.

 

 

 

 

 

South Korea’s Kospi dropped 4.8%, triggering a circuit breaker designed to curb panic selling. Taiwan’s Taiex index collapsed by nearly 10%, with major tech exporters like TSMC and Foxconn hitting circuit breaker limits after each fell close to 10%. Meanwhile, Australia’s ASX 200 shed as much as 6.3%, and New Zealand’s NZX 50 lost over 3.5%.

 

Despite the escalation, Beijing has adopted a measured tone. Chinese officials urged investors not to panic and assured markets that the country has the tools to mitigate economic shocks. At the same time, they left the door open for renewed trade talks, though no specific timeline has been set.

 

US Stock Futures Plunge Ahead of Monday Open

 

US stock futures pointed to another brutal day on Wall Street. Futures tied to the S&P 500 dropped over 3%, Nasdaq futures sank 4%, and Dow Jones futures lost 2.5%—equivalent to nearly 1,000 points. The Nasdaq Composite officially entered a bear market on Friday, down more than 20% from its recent highs, while the S&P 500 is nearing bear territory. The Dow closed last week in correction. Oil prices followed suit, with WTI crude dropping over 4% to $59.49 per barrel—its lowest since April 2021.

 

Wall Street closed last week in disarray, erasing more than $5 trillion in value amid fears of an all-out trade war. The Nasdaq Composite officially entered a bear market on Friday, sinking more than 20% from its recent peak. The S&P 500 is approaching bear territory, and the Dow Jones Industrial Average has slipped firmly into correction territory.

 

German Banks Hit Hard Amid Escalating Trade Tensions

 

German banking stocks were among the worst hit in Europe. Shares of Commerzbank and Deutsche Bank plunged between 9.5% and 10.3% during early Frankfurt trading, compounding Friday’s steep losses. Fears over a global trade war and looming recession are severely impacting the financial sector, particularly export-driven economies like Germany.

 

Eurozone Growth at Risk

 

Eurozone officials are bracing for economic fallout, with Greek central bank governor Yannis Stournaras warning that Trump’s tariff policy could reduce eurozone GDP by up to 1%. The EU is preparing retaliatory tariffs on $28 billion worth of American goods—ranging from steel and aluminium to consumer products like dental floss and luxury jewellery.

 

Starting Wednesday, the US is expected to impose 25% tariffs on key EU exports, with Brussels ready to respond with its own 20% levies on nearly all remaining American imports.

 

UK Faces £22 Billion Economic Blow

 

In the UK, fresh research from KPMG revealed that the British economy could shrink by £21.6 billion by 2027 due to US-imposed tariffs. The analysis points to a 0.8% dip in economic output over the next two years, undermining Chancellor Rachel Reeves’ growth agenda. The report also warned of additional fiscal pressure that may lead to future tax increases and public spending cuts.

 

Wall Street Braces for Recession

 

Goldman Sachs revised its US recession probability to 45% within the next year, citing tighter financial conditions and rising policy uncertainty. This marks a sharp jump from the 35% risk estimated just last month—and more than double January’s 20% projection. J.P. Morgan issued a bleaker outlook, now forecasting a 60% chance of recession both in the US and globally.

 

Global Leaders Respond as Trade Tensions Deepen

 

The dramatic market sell-off was triggered by China’s sweeping retaliation to a new round of US tariffs, which included a 34% levy on all American imports. Beijing’s state-run People’s Daily released a defiant statement, asserting that China has the tools and resilience to withstand economic pressure from Washington. ‘We’ve built up experience after years of trade conflict and are prepared with a full arsenal of countermeasures,’ it stated.

 

Around the world, policymakers are responding to the growing threat of a trade-led economic slowdown. Japanese Prime Minister Shigeru Ishiba announced plans to appeal directly to Washington and push for tariff relief, following the US administration’s decision to impose a blanket 24% tariff on Japanese imports. He aims to visit the US soon to present Japan’s case as a fair trade partner.

 

In Taiwan, President Lai Ching-te said his administration would work closely with Washington to remove trade barriers and increase purchases of American goods in an effort to reduce the bilateral trade deficit. The island's defence ministry has also submitted a new list of US military procurements to highlight its strategic partnership.

 

Economists and strategists are warning of deeper economic consequences. Ronald Temple, chief market strategist at Lazard, said the scale and speed of these tariffs could result in far more severe damage than previously anticipated. ‘This isn’t just a bilateral conflict anymore — more countries are likely to respond in the coming weeks,’ he noted.

 

Analysts at Barclays cautioned that smaller Asian economies, such as Singapore and South Korea, may face challenges in negotiating with Washington and are already adjusting their economic growth forecasts downward in response to the unfolding trade crisis.

 

 

 

 

 

Oil Prices Sink on Demand Concerns

 

Crude oil continued its sharp slide on Monday, driven by recession fears and weakened global demand. Brent fell 3.9% to $63.04 a barrel, while WTI plunged over 4% to $59.49—both benchmarks marking weekly losses exceeding 10%. Analysts say inflationary pressures and slowing economic activity may drag demand down, even though energy imports were excluded from the latest round of tariffs.

 

Vandana Hari of Vanda Insights noted, ‘The market is struggling to find a bottom. Until there’s a clear signal from Trump that calms recession fears, crude prices will remain under pressure.’

 

OPEC+ Adds Further Pressure with Output Hike

 

Bearish sentiment intensified after OPEC+ announced it would boost production by 411,000 barrels per day in May, far surpassing the expected 135,000 bpd. The alliance called on overproducing nations to submit compensation plans by April 15. Analysts fear this surprise move could undo years of supply discipline and weigh further on already fragile oil markets.

 

Global political risks also flared over the weekend. Iran rejected US proposals for direct nuclear negotiations and warned of potential military action. Meanwhile, Russia claimed fresh territorial gains in Ukraine’s Sumy region and ramped up attacks on surrounding areas—further darkening the outlook for markets.

 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Andria Pichidi

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 8th April 2025.

 

Markets Rebound Cautiously as US-China Tariff Tensions Deepen

 

Global markets staged a tentative recovery on Tuesday following a wave of volatility sparked by escalating trade tensions between the United States and China. The Asia-Pacific region showed signs of stability after a chaotic start to the week—though some pockets remained under pressure. Taiwan’s Taiex dropped 4.4%, dragged lower by losses in tech heavyweight TSMC. The world’s largest chipmaker fell another 4% on Tuesday and has now slumped 13.5% since April 2, when US President Donald Trump first unveiled what he called ‘Liberation Day’ tariffs.

 

However, broader sentiment across the region turned more positive, with several markets rebounding sharply after Monday’s dramatic sell-offs. Japan’s Nikkei 225 surged over 6% in early trading, rebounding from an 18-month low. South Korea’s Kospi rose marginally, and Australia’s ASX 200 gained 1.9%, driven by strength in mining stocks. Hong Kong’s Hang Seng rose 1.6%, though still far from recovering from Monday’s 13.2% crash—its worst day since the 1997 Asian financial crisis. China’s Shanghai Composite added 0.9%.

 

In Europe, DAX and FTSE 100 are up more than 1% in opening trade. EU Commission President von der Leyen repeated yesterday that the EU had offered reciprocal zero tariffs on manufactured goods previously and continues to stand by that offer. Others are also trying again to talk to Trump to get some sort of agreement that limits the impact.

 

Much of the rally appeared to be driven by dip-buying, as well as hopes that the intensifying trade war could still be defused through negotiations.

 

China Strikes Back: ‘We Will Fight to the End’

 

Tensions reached a boiling point after Trump threatened to impose an additional 50% tariff on all Chinese imports unless Beijing rolled back its retaliatory measures by April 8. ‘If China does not withdraw its 34% increase above their already long-term trading abuses by tomorrow... the United States will impose additional tariffs on China of 50%,’ Trump declared on social media.

 

If implemented, the new tariffs would bring total US duties on Chinese goods to a staggering 124%, factoring in the existing 20%, the 34% recently announced, and the proposed 50%.

 

In response, China’s Ministry of Commerce issued a stern warning, stating: ‘The US threat to escalate tariffs is a mistake on top of a mistake... If the US insists on its own way, China will fight to the end.’ The ministry also called for equal and respectful dialogue, though signs of compromise on either side remain scarce.

 

Beijing acted quickly to contain a market fallout. State funds intervened to support equities, and the People’s Bank of China set the yuan fixing at its weakest level since September 2023 to boost export competitiveness. Additionally, five-year interest rate swaps in China fell to their lowest levels since 2020, indicating potential for further monetary easing.

 

Trump Talks Tough on EU Too

 

Trump’s hardline approach extended beyond China. Speaking at a press conference, he rejected the European Union’s offer to eliminate tariffs on cars and industrial goods, accusing the bloc of ‘being very bad to us.’ He insisted that Europe would need to source its energy from the US, claiming the US could ‘knock off $350 billion in one week.’

 

The EU, meanwhile, backed away from a proposed 50% retaliatory tariff on American whiskey, opting instead for 25% duties on selected US goods in response to Trump’s steel and aluminium tariffs.

 

 

 

 

 

Volatile Wall Street Adds to the Drama

 

Wall Street experienced wild swings on Monday as investors processed the rapidly evolving trade conflict. The S&P 500 briefly fell 4.7% before rebounding 3.4%, nearly erasing its losses in what could have been its biggest one-day jump in years—if it had held. The Dow Jones Industrial Average sank by as much as 1,700 points early in the day but later climbed nearly 900 points before closing 349 points lower, down 0.9%. The Nasdaq ended up 0.1%.

 

The brief rally was fueled by a false rumour that Trump was considering a 90-day pause on tariffs—rumours that the White House quickly labelled ‘fake news.’ The market's sharp reaction underscored how desperate investors are for any sign that tensions might ease.

 

Oil Markets in Focus: Goldman Sachs Revises Forecasts

 

Crude prices also reflected the uncertainty, with US crude briefly dipping below $60 per barrel for the first time since 2021. As of early Tuesday, Brent crude was trading at $64.72, while WTI hovered around $61.26.

 

Goldman Sachs, in a note dated April 7, lowered its average price forecasts for Brent and WTI through 2025 and 2026, citing mounting recession risks and the potential for higher-than-expected supply from OPEC+.

 

 

 

 

 

Under a base-case scenario where the US avoids a recession and tariffs are reduced significantly before the April 9 implementation date, Goldman sees Brent at $62 per barrel and WTI at $58 by December 2025. These figures fall further to $55 and $51, respectively, by the end of 2026. This outlook also assumes moderate output increases from eight OPEC+ countries, with incremental boosts of 130,000–140,000 barrels per day in June and July.

 

However, should the US slip into a typical recession and OPEC production aligns with the bank’s baseline assumptions, Brent could retreat to $58 by the end of this year and to $50 by December 2026.

 

In a more bearish scenario involving a global GDP slowdown and no change to OPEC+ output levels, Brent prices might fall to $54 by year-end and $45 by late 2026. The most extreme projection—based on a simultaneous economic downturn and a full reversal of OPEC+ production cuts—would see Brent plunge to below $40 per barrel by the end of 2026.

 

Goldman noted that oil prices could outperform forecasts significantly if there was a dramatic shift in tariff policy and a surprise in global demand recovery.

 

Cautious Optimism, But Warnings Persist

 

With both Washington and Beijing showing no signs of backing down, markets are likely to remain volatile in the days ahead. Investors now turn their attention to upcoming trade meetings and policy decisions, hoping for clarity in what has become one of the most unpredictable trading environments in recent years.

 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Andria Pichidi

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 9th April 2025.

 

Global Markets Rattled by Tariffs and Bond Sell-Off as Volatility Surges.

 

Markets around the globe were hit hard on Wednesday, as sweeping US tariffs took effect and fears of a global economic slowdown intensified. From bond markets to equities, investors were left scrambling amid heightened uncertainty and growing recession risks. Volatility levels surged as investors responded to rising yields, falling oil prices, and a weakening yuan. Government bond yields surged, treasuries were hit hard, equities tumbled, and oil hit fresh multi-year lows as investors scrambled to assess the impact of sweeping trade measures.

 

Tariff Uncertainty Sparks Global Sell-Off

Markets were on edge as the White House confirmed a 104% tax targeting Chinese imports, effective at midnight. While the US administration indicated openness to negotiations with over 70 nations, China has yet to engage. Instead, Beijing vowed to ‘fight to the end’ and warned it has ample tools to offset any external shocks.

 

In a bold move, China allowed the offshore yuan to weaken to a record low of 7.4153 per dollar, signalling its willingness to absorb external shocks. Goldman Sachs warned that China might retaliate by selling US assets, including Treasuries, potentially exacerbating the sell-off.

 

Bond Market Under Siege as Yields Surge

Investors dumped long-duration US government bonds in droves, driving yields to multi-year highs. The 30-year Treasury yield briefly soared above 5% the highest level since 1998, while the 10-year hit 4.51% before easing back to 4.42%. Meanwhile, the 2-year yield fell on haven demand and bets for future rate cuts, steepening the curve sharply. Bond yields move inversely to prices. Stock markets came under renewed pressure.

 

The curve between 2s and 10s spiked by 14 basis points to 55 bps. This aggressive repricing reflected deepening fears of inflation, slower growth, and rising uncertainty over the Fed's policy path. The sharp rise in long-dated yields caused a steepening in the yield curve across Europe, with bond prices falling as investors priced in higher inflation and slower global growth.

 

RBNZ Cuts Rates, Signals Further Easing

New Zealand’s central bank cut its benchmark interest rate by 25 basis points to 3.50%, marking the fifth consecutive easing. The Reserve Bank of New Zealand cited mounting global trade risks and downside pressures on both growth and inflation.

 

‘The recently announced increases in global trade barriers weaken the outlook for economic activity,’ said the RBNZ. ‘These developments create downside risks... The Committee has scope to lower the OCR further as appropriate.’Markets now expect rates to fall below the 3% floor previously signalled by the central bank.

 

Global Repercussions: Stocks and Currencies Hit

In Europe, German bonds opened lower, and a steepening yield curve emerged as longer-term yields rose sharply. Futures tracking the Stoxx Europe 600 slumped 2.9%, mirroring weakness in US and Asian equity markets.

 

Japanese stocks fell sharply, with the Topix dropping 3.6%, while the yen settled near ¥145 per dollar. Analysts described earlier gains as a ‘head fake,’ noting that ‘fast money’ had resumed bearish bets amid worsening trade tensions.

 

Chinese equities managed to rebound, driven by strength in technology and chip stocks. The CSI 300 index swung from a 1.7% decline to close up 0.3%, led by SMIC (+6%) and Foxconn Industrial Internet.

 

Wall Street’s major indices plunged before partially trimming losses late in the session. The S&P 500 closed down 1.57%, the Nasdaq tumbled 2.15%, and the Dow slipped 0.84%. Earlier gains of over 4% were quickly reversed as investors grew wary of systemic risks.

 

This marked the fourth consecutive session with a trading range exceeding 5%, a rare occurrence seen only during periods of extreme stress like March 2020, October 1987, and the 2008 financial crisis.

 

The VIX volatility index jumped 10.6% to 52.01, reflecting the high level of investor anxiety.

 

Oil Crashes to Pandemic Lows, Gold Recovers

Oil markets extended their dramatic decline as traders braced for weaker global demand. Brent crude dropped 4.1% to $60.26—a four-year low—while West Texas Intermediate (WTI) fell to $56.30. Gold, meanwhile, briefly dipped but managed to rebound above $3040 per ounce.

 

USDIndex Dips, Currency Volatility Rises

The US Dollar Index (DXY) swung throughout the session, at 102.25—down from a session high of 103.441. Currency markets were jittery amid safe-haven flows and shifting interest rate expectations.

 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Andria Pichidi

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 17th April 2025.

 

Economic Data Lifts Crude Oil — Will Resistance Stall the Rally?

 

Crude Oil prices rise for a second consecutive day due to supply chain concerns and positive Chinese data. The price of Crude Oil rose 1.58% on Wednesday, and a further 1.15% during this morning’s Asian session. However, this upward price movement has taken the asset to the key resistance level at $62.70. Is the price about to witness a decline due to the current resistance level?

 

Why are Oil Prices Increasing?

One of the main reasons why Crude Oil prices have been increasing in value is the positive economic data from China. China and the US hold the biggest influence over Crude Oil demand as the two countries are the largest importers. China's first quarter’s gross domestic product (GDP) grew by 5.4%, surpassing the projected 5.2%. However, analysts attribute this growth to a surge in demand for Chinese goods ahead of the anticipated tariff war and predict a potential slowdown by year-end.

 

Nonetheless, the oil market reacted positively to the news that the Chinese economy saw better figures than previously expected. Traders will be watching closely to see if deteriorating economic data in the coming months, driven by trade policy, will put downward pressure on prices.

 

 

 

Crude Oil

 

 

The US also made public positive economic data from Retail Sales. The Retail Sales figure rose by 1.4%, the highest in more than 12 months. The Core Retail Sales also rose by 0.5%, higher than the projected figure and the previous month.

 

Furthermore, the US, UK and Japan have confirmed they will begin negotiating a trade agreement with the US. The tone is positive and can have a positive impact on the price of Oil. However, the key factor for the Oil market is whether the US will come to an agreement with China. In terms of supply, Iraq and Kazakhstan have announced additional output cuts to keep supply controlled. In addition to this, the US is imposing additional sanctions on Iranian oil which is further pressuring the supply side. Restrictions on supply chains are known to push prices higher.

 

The Federal Reserve and How the Economy Will Influence Crude Oil?

Even though economic data surprised the market and provided a positive tone for many assets, the Federal Reserve was less positive. The Chairman, Mr Jerome Powell spoke towards the end of the US session discussing inflation, employment and interest rates. According to Mr Powell, the Tariffs imposed by the US administration were higher than previous expectations.

 

According to the Fed, the trade policy is likely to trigger higher inflation, but it is unclear whether the higher inflation will be temporary or long-term. The Consumer and Producer Price Index over the next 3-6 months will be key for the Federal Reserve. The key statement that captured investors' attention was the chairman's remarks regarding the Federal Reserve's primary focus.

 

Powell said, ‘without price stability, we cannot achieve long periods of strong labor market conditions’. This comment was a clear indication that the Federal Reserve will concentrate on controlling inflation and will allow the employment sector to be temporarily hit. The hawkish tone from the Fed can be seen in the Fedwatch Tool.

 

The expectations of a pause have risen 14% over the past week, mainly due to the speech yesterday. However, the market still believes the Federal Reserve will cut in June 2025.

 

Crude Oil - Technical Analysis

The main concern for Crude Oil is the resistance level at $62.70, the domino effect of a Federal Reserve reluctant to cut rates and if the so-called ‘trade war’ escalates. As the price rose to the resistance level this morning, the asset quickly declined. Nonetheless, on a 2-hour chart, the asset remains above the trend line and above the neutral area of the RSI. However, the price is below the Volume-weighted average price. Therefore, we have conflicting signals.

 

 

 

Crude Oil

 

 

However, if the price continues to decline and establish itself below the 200-bar simple moving average in the 3-minute timeframe, the sell signals are likely to strengthen.

 

Key Takeaway Points:

1. Oil prices rose for a second day, driven by strong Chinese GDP, OPEC+ supply cuts, and renewed sanctions on Iran.
2. Positive economic data from China and the US boosted demand outlook, though analysts warn China's growth may slow due to upcoming tariffs.
3. The Fed maintained a hawkish stance, prioritizing inflation control, and raising uncertainty about rate cuts despite strong economic figures.
4. Trade talks with the US, UK, and Japan lifted market sentiment, but concerns remain over a potential escalation in the US-China trade dispute.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Michalis Efthymiou

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 18th April 2025.

Market Wrap-Up: Stocks Mixed as UnitedHealth and Nvidia Drag, While Netflix Surges.
 

U.S. equity markets closed Thursday’s shortened session on a mixed note ahead of the Good Friday holiday. The Dow Jones Industrial Average slumped 1.33%, pressured by a 22% plunge in UnitedHealth Group after it cut its earnings forecast. The Nasdaq Composite also dipped 0.13%, led lower by a 2.9% drop in Nvidia, which continues to struggle amid chip export restrictions to China.

In contrast, the S&P 500 managed a modest gain of 0.13%, supported by strength in energy stocks and a surprise earnings beat from Netflix. The streaming giant jumped in after-hours trading, driven by stronger-than-expected Q1 earnings, higher subscription prices, and robust ad revenue growth.

On the technical front, Netflix’s RSI has rebounded off the 50 level—historically a reliable signal for renewed bullish momentum. Resistance now sits at $1,065 and $1,300, while support is seen near $821 and $697.

Meanwhile, Treasury yields rose, erasing most of Wednesday’s gains. The 10-year yield climbed 4.8 basis points to 4.325%, and the 2-year yield rose to 3.785%, reflecting investor uncertainty and fading hopes for near-term Fed rate cuts.


 

 

Political Pressure and Tariff Concerns Stir Volatility

Markets also digested sharp political commentary that rattled confidence. Former President Donald Trump made headlines after attacking Federal Reserve Chair Jerome Powell, stating that his ‘termination cannot come soon enough.’ While Powell remains firmly in position, the remarks reignited fears over central bank independence—a cornerstone of monetary policy stability.

Additionally, tariff tensions resurfaced as the former president hinted at a more protectionist trade stance. With global supply chains still vulnerable, investors grew wary of renewed U.S.-China trade friction—especially in the semiconductor and tech sectors, where Nvidia and TSMC remain key players.
 

Asia Rallies in Holiday-Thinned Trading as TSMC Meets Expectations

Asian equity markets mostly posted gains on Friday despite Wall Street’s choppy session, as investors reacted to Taiwan Semiconductor Manufacturing Co. (TSMC) earnings and stabilized sentiment in the region.
 

• Japan’s Nikkei 225 added 0.6% to close at 34,583.29.
• South Korea’s Kospi rose 0.3% to 2,478.39.
• Taiwan’s Taiex gained 0.8% after TSMC met forecasts and offered cautious optimism despite ongoing chip export risks.
• China’s Shanghai Composite slipped 0.3% to 3,272.09 amid continued weakness in domestic demand.

Trading volumes remained thin across Asia ahead of the Easter holiday, with several regional exchanges closed.

Global Policy Moves: ECB Cuts Rates, Mixed U.S. Data Keeps Traders Guessing

In Europe, the European Central Bank (ECB) delivered a widely expected interest rate cut, yet investor reaction was subdued. The CAC 40 dropped 0.6% and Germany’s DAX declined 0.5%, reflecting concern that rate reductions may be arriving too late to stimulate faltering growth.

Back in the U.S., economic data sent mixed signals. Weekly jobless claims fell more than anticipated, highlighting ongoing labour market strength. However, the Philadelphia Fed’s manufacturing index contracted unexpectedly, showing continued weakness in factory output.

Combined, these updates reinforced the view that the Federal Reserve may remain on hold longer than investors had hoped, especially amid sticky inflation and political pushback.
 

Dollar Holds Ground as Bond Yields Rise and Gold Retreats from Record Highs

In the currency markets, the US Dollar Index remained steady near 99.44, posting a third consecutive close below the psychological 100 level. The greenback traded in a narrow range between 99.231 and 99.746. Meanwhile, the dollar eased slightly to 132.42 yen and the euro ticked up to $1.1373, maintaining its recent strength.


 

Gold prices, which touched record highs earlier in the week, slipped 0.49% to close at $3,326.85 per ounce after hitting $3,343.12 on Wednesday. Meanwhile, oil prices rebounded sharply:
 

• WTI crude surged 3.5% to $64.68 a barrel.
• Brent crude rose to $67.96.

The rally in energy was supported by bargain-hunting and concerns over global supply risks. Markets remained closed Friday in observance of Good Friday, pausing further moves in commodities and bonds.

Final Takeaway: Markets Enter Holiday Pause with Unresolved Risks

As the markets head into a long weekend, investor sentiment remains cautious. Strong earnings from companies like Netflix offer moments of optimism, but persistent concerns around tariff policy, Federal Reserve independence, and geopolitical tensions continue to weigh heavily on risk appetite.

With bond yields creeping higher and volatility likely to return next week, traders should stay nimble and watch for cues from earnings reports, Fed speakers, and any developments on the trade or political front.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 23rd April 2025.

Trump Eases Market Fears: Stocks Surge as President Declares No Intention to Fire Fed Chair Powell.

Trading Leveraged products is Risky

US stock futures surged on Tuesday after President Donald Trump clarified he has ‘no intention’ of firing Federal Reserve Chair Jerome Powell — a statement that helped soothe Wall Street concerns over central bank independence and policy stability. The President was answering a wide range of questions from the Oval Office. He also said he expects to make a deal with China, but if there is not, it is not the end of the end. China tariffs will come down ‘substantially’, he added.

ETFs tracking US equity futures are climbing and extending Tuesday's bounce in after-hours trading on these comments. Futures tied to the Dow Jones Industrial Average jumped 1.2%, while S&P 500 futures advanced 1.5%. The tech-heavy Nasdaq Composite led the rally with a 1.8% spike. Investors took comfort in Trump’s softened tone toward Powell, especially after recent criticisms and threats of dismissal that had roiled markets.

Speaking from the Oval Office, Trump said he ‘never did’ intend to remove Powell but reiterated his preference for lower interest rates. ‘I would like to see him be a little more active in terms of his idea to lower interest rates,’ Trump added.

The president’s remarks came after he previously labelled Powell a ‘major loser’ and said his removal ‘couldn’t come fast enough.’ This shift in rhetoric signalled a truce, at least for now, between the White House and the central bank — calming investors rattled by fears of political interference in monetary policy.

Asian Markets Climb on Powell News and Trade Optimism

Global markets followed Wall Street’s lead. Japan’s Nikkei 225 rose 1.7%, Australia’s ASX 200 climbed 1.6%, South Korea’s Kospi added 1.2%, and Hong Kong’s Hang Seng gained 1.7%. The Shanghai Composite was little changed, down just 0.1%.

The broader market mood was also lifted by new optimism around global trade. Trump indicated that tariffs on China could come down ‘substantially,’ while Treasury Secretary Scott Bessent called current tariff levels ‘unsustainable.’ Vice President JD Vance noted encouraging progress in US-India trade talks.

Tesla Soars After Musk Commits More Time to Company

Tesla (TSLA) shares jumped 5% in after-hours trading Tuesday despite disappointing first-quarter earnings. The electric vehicle maker missed Wall Street expectations, but investors were buoyed by CEO Elon Musk’s announcement that he will dedicate more time to Tesla.

‘Starting early next month, in May, my time allocation to DOGE [Department of Government Efficiency] will drop significantly,’ Musk said during the post-earnings call, adding that he’ll spend only one to two days per week on DOGE and the rest focusing on Tesla. The company also reaffirmed plans to launch new vehicles in the first half of 2025.

Oil Prices Rebound on Fed Comments and Inventory Data

Crude oil extended gains following Trump’s assurance about Powell’s job security and a bullish industry report on US stockpiles. West Texas Intermediate climbed above $64 a barrel, reversing Monday’s losses triggered by political and economic uncertainty.

But Bitcoin appears to be charting its own path

Unlike stocks and bonds, the world’s largest cryptocurrency has climbed more than 8% during the same period, reaffirming its role — at least for now — as a hedge in investor portfolios. According to Fundstrat’s Sean Farrell, Bitcoin is doing “all the right things” to show it may be entering a new phase of market behavior, increasingly decoupled from traditional risk assets.

Zooming out to the post-election period, Bitcoin has maintained its momentum even as stock market gains have reversed. While the S&P 500 has slipped below 5,300, Bitcoin is trading above $91,000 — significantly higher than its pre-election value of around $68,000.

Of course, it's too early to call this a lasting trend. But in a climate where U.S.-centric investments are losing favor, Bitcoin’s recent resilience is turning heads across the financial world.

Bank of Japan Seen Holding Rates Amid Global Trade Turbulence

In Asia, a Reuters survey of economists revealed that the Bank of Japan (BOJ) is expected to maintain its key interest rate through June, with a modest rate hike possibly coming in the third quarter. Only 52% of respondents now anticipate a rate hike between July and September, down from 70% last month.

Economists cited the uncertain global outlook, driven in part by Trump’s unpredictable trade policies, as a major reason for the BOJ’s cautious approach. While Trump recently imposed a 25% tariff on car and truck imports and a 24% tariff on Japanese goods — later reduced to 10% for 90 days — the impact has so far been disruptive but not severe enough to derail Japan’s monetary policy path.

Despite expected cuts to Japan’s economic growth forecast, 87% of surveyed economists said the country is unlikely to enter a recession. Many believe that a stronger yen and lower import costs could offset weaker exports, stabilizing the economy.

‘Exports will decline, but the strong yen will reduce import costs and boost corporate earnings,’ said Atsushi Takeda, chief economist at Itochu Research Institute. ‘And the suppression of consumer price increases is expected to support personal consumption, thereby an economic downturn is likely to be avoided.’

Markets were on edge after days of tension between the White House and the Fed. But Trump’s assurance that Jerome Powell’s position is safe — coupled with positive trade signals — helped spark a broad-based market recovery, from equities to commodities. As earnings season and economic data roll in, investors will be watching closely for signs that this rally has staying power.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 24th April 2025.

 

The Dollar's Role in a Recession Is Real—but Not Solo!

 

Key Takeaways

 

• The US dollar appears overvalued based on historical metrics.
• Foreign investor exposure to US assets is at record levels.
• Slower US economic growth and rising policy risks may reduce demand for the dollar.
• The greenback’s reserve currency status remains secure, but depreciation pressures are building.
• Inflation, trade balance improvements, and financial stability are all tied to the dollar’s trajectory.
• Trade policy, more than the dollar itself, may determine the path forward for the US economy.

Forecasting currency movements—especially the US dollar—is notoriously difficult. Compared to predicting GDP growth, inflation, or interest rates, estimating exchange rate trends poses even greater challenges. Yet, despite this complexity, there’s growing evidence that the dollar's recent 5% drop on a trade-weighted basis could be just the beginning.

 

The Dollar’s Decline: A Signal or a Catalyst?

According to the Federal Reserve, the real effective value of the US dollar remains significantly elevated—nearly two standard deviations above its long-term average since 1973. Historically, similar levels were observed only in the mid-1980s and early 2000s. Both periods were followed by sharp dollar corrections, falling by 25% to 30%.

 

Could a deeper depreciation trigger broader financial consequences?

 

Massive Foreign Exposure to US Assets Raises Red Flags

Global investors have significantly increased their exposure to US assets. The International Monetary Fund (IMF) estimates that foreign investors now hold around $22 trillion in US-based assets—representing approximately one-third of their total portfolios. Half of this investment is in equities, many of which are unhedged against currency risk. Should these investors begin reducing their exposure to US markets, the dollar could experience intensified selling pressure.

 

Even a pause in foreign inflows may weigh heavily. The United States runs a current account deficit of roughly $1.1 trillion per year, which must be financed through capital inflows. In reality, most of this financing has traditionally come from foreign purchases of US portfolio assets. If foreign demand for these assets falters, prices may fall, the dollar could weaken, or both could occur simultaneously.

 

 

 

 

 

Slowing US Growth Could Dampen Dollar Strength

If the US economy were expected to continue outperforming other global economies, dollar strength might be more sustainable. However, this no longer appears likely. Economic growth projections have been downgraded across major economies, and the US has been hit hardest. For example, Goldman Sachs has revised its 2024-2025 US GDP forecast from 1% to just 0.5%.

 

With rising policy uncertainty, weaker corporate earnings, and doubts about the Federal Reserve’s independence, international investors may become more cautious about increasing their US holdings.

 

Dollar Depreciation Isn’t a Death Blow—But It’s Not Irrelevant

Despite these concerns, a weaker dollar does not necessarily imply the end of its global dominance. It’s important to separate dollar depreciation from a loss of its global reserve status. Historically, the greenback has faced major swings before without losing its dominance as the world’s primary reserve currency. Its role as a global medium of exchange and store of value remains deeply embedded in the international financial system.

 

Implications of a Weaker Dollar

 

1. Consumer Prices May Rise
   A falling dollar could amplify the inflationary effects of recent tariffs. Core inflation, measured by the Personal Consumption Expenditures (PCE) Price Index, may rise from 2.75% to 3.5%, with dollar weakness potentially adding another 0.25 percentage points. Ultimately, American consumers are likely to bear the brunt of higher import costs.
2. Exports Become More Competitive
   A weaker dollar reduces the price of US exports (in foreign currency terms) while making imports more expensive. Over time, this shift could help reduce the US trade deficit—aligning with longstanding policy goals.
3. Financial Conditions Could Tighten
   While a depreciating dollar can support easier financial conditions, the context matters. If the drop is driven by reduced demand for US assets, including Treasuries, the benefits could be offset by rising borrowing costs or declining market confidence.
    

The True Recession Risk Lies in Trade Policy, Not the Dollar Alone

While dollar movements matter, they’re unlikely to cause a recession on their own. The bigger threat is aggressive trade policy. Additional tariffs, especially if introduced after the current 90-day pause, or an escalation in the US-China trade conflict, could tip the balance. These decisions could undermine investor confidence and business activity—regardless of where the dollar stands.

 

The dollar is part of the recession puzzle—but not the whole picture. Its overvaluation, dependency on foreign investment, and declining support from global investors could compound economic vulnerabilities. Still, it's policy—especially on tariffs—that could ultimately determine whether the US slides into recession.

 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.

 

Andria Pichidi

HFMarkets

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 25th April 2025.

Trade Tensions Hurt Confidence Across Europe
 

Trading Leveraged products is Risky

The latest European confidence indicators highlighted the growing impact of global trade tensions on investor sentiment, particularly within the Eurozone. According to recent surveys, investor confidence has been notably dented, with the services sector showing greater weakness compared to manufacturing. This may be due to U.S. efforts to front-load imports ahead of potential tariff hikes.

Meanwhile, diverging fiscal policies between the UK and the Eurozone have further widened economic gaps. The UK faces limited fiscal flexibility and mounting pressure to stimulate domestic demand, complicating its response to external shocks.
 

German ZEW Investor Confidence Plummets

Germany's ZEW investor sentiment index plunged in April following the announcement of new U.S. tariffs. The index fell by a staggering 65.6 points to -14.0, reflecting growing pessimism about the economic outlook. While recent political shifts offered short-term relief to market sentiment, uncertainty remains elevated, suggesting this key forward-looking indicator may stay in negative territory.
 

Eurozone PMI and Ifo Data Show Mixed Signals

Surprisingly, the Eurozone PMI and Germany’s Ifo business climate report showed resilience. Although the composite PMI dropped to a four-month low of 50.1—indicating stagnation rather than contraction—the weakness was concentrated in the services sector. The services PMI fell to 49.7, ending a five-month expansion streak.

Germany’s Ifo survey showed improvements in construction and business sentiment, driven by a rise in the current conditions index. The overall business climate index rose to 86.9 in April, up from 86.7 in March, defying expectations of a decline.

Trade Boost May Be Temporary as Risks Persist
Trade data from February revealed a 22.4% year-over-year jump in Eurozone exports to the U.S., with Ireland’s pharmaceutical-heavy exports surging by 200%. S&P Global noted signs of stockpiling and unplanned orders from U.S. clients trying to stay ahead of tariffs.

However, analysts warn this boost may be short-lived. As tariffs bite and the euro strengthens, European exports risk becoming less competitive. Despite hopes that EU goods could benefit from U.S.-China trade disputes, long-term gains are uncertain. If U.S. firms start to run down inventories, demand may soften.

Germany and EU Infrastructure Investment to Counter Trade Headwinds
Germany’s decision to raise borrowing for infrastructure and defense, alongside EU-wide investment plans, aims to cushion the blow from external shocks. Sentiment in the German construction sector has already improved, according to the Ifo report. While large-scale spending will take time to materialize, early signs show progress in the defense sector.
 

UK PMI Data Signals Growing Economic Challenges
Across the Channel, the UK economy is facing multiple headwinds. Government finances are strained, and recent fiscal data missed expectations. Although the UK may enjoy lower tariffs post-Brexit, its open economy is more vulnerable to global slowdowns.

Rising labor costs, due to higher National Insurance contributions and minimum wage hikes, have added pressure. The latest S&P Global UK Composite Output Index dropped sharply to 48.2 in April from 51.5, with the Services PMI falling to 48.9—a 27-month low. Manufacturing Output PMI also fell to 44.0, the weakest since mid-2021.

S&P Global attributed this decline to weakened client confidence and the impact of U.S. tariffs. Business outlooks have dimmed, with optimism at its lowest since October 2022. Rising cost burdens have prompted employment cuts, and inflationary pressures persist, despite easing energy prices.

UK Inflation and Rate Outlook: BoE Faces Tough Decisions
The CBI industrial trends survey painted a similarly cautious picture. Although total orders slightly improved, export orders deteriorated. Selling price expectations also rose, reflecting cost pressures.

Bank of England Governor Andrew Bailey emphasized risks to growth and warned about the dangers of global economic fragmentation. While markets are pricing in another BoE rate cut, rising wage-driven inflation may keep UK interest rates elevated relative to the Eurozone.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.vvvvvvvvvv