Financial market analysis on April 15, 2025

Macroeconomic background: expectations for the dayToday promises to be a calm day in terms of the release of macroeconomic data. Market participants' attention remains focused on uncertainty in global trade and possible signals from US President Donald Trump.In the eurozone, the focus will be on the April consumer confidence indicator. After a significant increase last year, consumer sentiment began to deteriorate again, and trade tensions in April likely intensified this process.In Sweden, the latest data on the unemployment rate is expected to be published. Given the continuing risks for companies that constrain their staffing plans, the negative trend may continue. Nevertheless, we forecast a decrease in the unemployment rate by the end of the year, although it will take several months to be sure.Key events of the week: PMI and tariff negotiationsThe key events of the week will be the publication of business activity indices (PMI) for April, scheduled for Wednesday. These data will provide the first estimates of the impact of trade uncertainty after Liberation Day. Any progress in the negotiation process between the United States and China, as well as changes in investor sentiment, will continue to affect market dynamics.An overview of Easter Week eventsIn the US, March retail sales showed resilience, rising by 1.4%, which was in line with expectations. Despite the decrease in gasoline prices, which held back the overall figure, the growth in sales of cars and catering services supported the overall dynamics. This suggests that so far weak consumer sentiment indicators have not had a serious impact on real spending.The Philadelphia Federal Reserve's manufacturing activity indicator weakened sharply in April, falling from 8.7 to -34.2 points. This may indicate a possible deterioration in the PMI in the first release after the holidays.Fed officials in their statements during Easter confirmed their commitment to a wait-and-see attitude. Chairman Jerome Powell stressed the need for caution, and New York Fed President John Williams also does not expect urgent policy changes. At the same time, market participants' attention is focused on Trump's ongoing attacks on the Fed's independence.European policy: results of the ECB meetingThe European Central Bank, as expected, lowered interest rates by 25 basis points, bringing the deposit rate to 2.25%. The regulator's comments were generally "mild": the risks of a slowdown in economic growth were emphasized with a moderate assessment of inflationary threats. This caused a decline in European bond yields and a local weakening of the euro against the dollar, although weak statistics from the United States then supported the cross.Our forecast assumes the continuation of the ECB rate reduction cycle, with the aim of reducing the deposit rate to 1.50% by September 2025.China and the Trade WarsChinese regulators kept the base rates at 3.10% for one-year loans and 3.60% for five-year loans. However, on the political front, Beijing has accused the United States of abusing its tariff policy and warned other countries against entering into agreements with Washington to the detriment of China. This statement was made against the background of rumors about possible US pressure measures on third countries as part of a trade confrontation.UK inflation and Bank of England policyIn the UK, inflation in March was below forecasts. The annual growth rate of consumer prices decreased to 2.6%, mainly due to cheaper transport services and leisure goods. The slowdown in inflationary pressure reinforces expectations of another rate cut by the Bank of England at its meeting in May.Central bank decisions: Denmark, Canada, TurkeyThe central bank of Denmark followed the example of the ECB and lowered its key interest rate by 25 basis points to 1.85%. The Bank of Canada maintained its rate at 2.75%, confirming its commitment to an inflation target of 2% and supplementing the forecast with two scenarios depending on the further escalation of the trade war.The central bank of Turkey unexpectedly raised the rate immediately by 350 basis points to 46%, which was a surprise to the markets.Japan: inflation and policy of the Bank of JapanIn Japan, core inflation rose to 3.2% year-on-year in March, in line with forecasts. The head of the Bank of Japan, Kazuo Ueda, confirmed his readiness to continue tightening monetary policy if inflation continues to accelerate, although a cautious approach remains amid uncertainty in global trade.Commodity markets: oil and goldOil prices dropped by more than 2% due to expectations of progress in negotiations on Iran's nuclear program. In the morning, Brent crude oil is trading around $67 per barrel.Gold prices continue to update records, approaching the level of $ 3,488 per troy ounce, reflecting the steady demand for safe haven assets.Stock markets: mood remains tenseAgainst the background of the Easter holidays, stock markets showed weakness. American indices have lost more than 4% over the past five trading days, while European markets have shown moderate growth. Volatility has increased: the VIX index has risen to 33 points. At the same time, the growth of the euro adds pressure on dollar assets in investors' portfolios.Debt market and currenciesThe US dollar continues to decline amid political instability and pressure on the Fed from the White House. Short-term rates in the United States have fallen, while long-term rates continue to rise, indicating an increase in the yield gap. Against the background of the ECB's softening position, yields in Europe continue to decline, and the EUR/SEK pair is moving towards fair levels around 11.

FOREX fundamental analysis for EUR/USD on April 22, 2025Financial markets are faced with a paradox: the slogan "America first" has turned into a flight of capital from the United States in practice.Investors, who initially focused on the protectionist rhetoric of the administration, are now hastily reducing interest in American assets, considering them toxic.This led to a sharp weakening of the dollar — the USD index has declined by 7% since the beginning of the year, and the EUR/USD pair is showing steady growth.According to Apollo Management, non-residents own a significant share of American assets.:- Shares worth $19 trillion.- Treasury bonds (treasuries) worth $7 trillion.- Up to 30% of US corporate debt.A massive withdrawal of these funds can provoke serious volatility, especially against the background of the growing profitability of treasuries. Contrary to the classical correlation, the dollar does not receive support from rising rates — investors see risks in Washington's economic policy itself.The conflict between Trump and the FedThe US president is actively criticizing Jerome Powell, accusing him of a delayed reaction to inflation and political bias. Demands to lower the federal funds rate are being made against the backdrop of slowing inflation, but the new tariffs from the White House may again accelerate price increases (PCE).The historical parallel with the 1970s raises concerns: then the Fed's subordination to political pressure led to a double-dip recession. Today, the independence of the regulator is a key element of confidence in the dollar, and its erosion only accelerates capital outflow.EUR/USD prospectsThe current dynamics of the pair indicates a continuation of the uptrend. The first target for buyers is the 1.16 level, with the prospect of moving towards 1.1950. The pressure on the dollar remains, and the formation of long positions from pullbacks and corrections remains an urgent forex trading strategy.Key factors for monitoring:- Further escalation of trade restrictions.- The Fed's reaction to political pressure.- Dynamics of capital outflow from American assets.Markets are entering a period of heightened uncertainty, where political decisions may be stronger than economic fundamentals.

Dollar decline amid concerns about the Fed's independenceIn today's low-volume trading due to the holiday period, the US dollar came under widespread pressure, which was helped by growing concerns about the independence of the Federal Reserve System. Investors are alarmed after statements by White House Economic Adviser Kevin Hassett that President Donald Trump continues to explore the possibility of removing Fed Chairman Jerome Powell. Despite the fact that the legal basis for such actions remains questionable and unclear, the very fact of possible political interference in the process of monetary policy formation has seriously undermined the confidence of market participants.Rising risks amid US trade policyThe escalation of the conflict between the presidential administration and the Federal Reserve is taking place against the background of the already existing uncertainty caused by Washington's aggressive trade policy. New tariff measures and retaliatory duties are exacerbating the situation: Fed officials, including Powell, have repeatedly warned that increased trade barriers could simultaneously accelerate inflation and slow down economic growth, increasing the likelihood of a stagflationary scenario. The threat of interference in the independence of the Federal Reserve increases market instability and significantly increases long-term risks for American assets.Protecting the independence of the FedJerome Powell, in turn, strongly defends the independence of the central bank. Speaking last week, he stressed: "We will never succumb to political pressure... Our independence is enshrined in law." Powell also recalled that members of the Board of Governors can be removed only on serious grounds, and not because of differences in political views. Nevertheless, the escalation of the confrontation with the White House has already cast a shadow on the reputation of key American institutions. The markets did not remain indifferent: investors began to actively withdraw capital from the dollar in favor of alternative assets.Rising demand for Euro and goldAmid falling confidence in US assets, the euro became the main beneficiary of today's trading session. With the dollar declining, investors are looking for reliable and liquid alternatives, and the euro, with its deep financial market, relative political stability, and reputable central bank, has become one of the preferred destinations. The Japanese yen and the Swiss franc are also holding steady, but it was the euro and gold that received the most support, which remain the main safe haven assets in the face of increased turbulence.

USD/CAD analysis on April 18, 2025In a shortened trading session due to the Good Friday celebrations in North America, the USD/CAD pair is showing a moderate recovery, testing the 1.3865 level after a recent pullback to November lows. The absence of new macroeconomic releases shifts the attention of market participants to technical factors and prospects for the settlement of trade disputes.The White House administration continues to signal the possibility of early agreements with the EU and China, although current conditions remain extremely stringent. Chinese exporters still face 145% duties, while European goods face a base rate of 10% with an additional 25% levies on automotive products.The American statistics, published the day before, presented a mixed picture.Improved data on initial applications for unemployment benefits (215 thousand against the expected 225 thousand)Deterioration in the rate of repeat referrals (1.885 million versus the forecast of 1.87 million)Unexpected increase in building permits to 1.482 millionSharp drop in the Philadelphia Federal Reserve Business activity Index to -26.4 pointsAt the last meeting, the Bank of Canada confirmed market expectations, leaving the rate at 2.75%. In an accompanying statement, the regulator highlighted the risks to economic growth associated with the escalation of the trade conflict with the United States, which justifies maintaining the current monetary policy.USD/CAD technical analysis for todayThe technical picture shows signs of a possible reversal:The narrowing Bollinger band retains the potential for movementMACD shows the first signals of a possible bullish crossingStochastic oscillator in the oversold zone indicates correction risksTrading recommendationsFor traders considering a buy scenario, the key entry level will be the breakdown of 1.3908 with the prospect of moving to the psychologically important 1.4000 mark. In this case, it is recommended to place a protective stop loss at 1.3850.An alternative bearish scenario suggests a breakdown of the 1.3839 support, which will pave the way for testing the 1.3730 level. It is advisable to set the stop loss for short positions at 1.3890.

The GBP/USD pair continues to strengthen, demonstrating an upward trend and approaching the level of 1.3270, which the market is testing for an upward breakdown. Trading is taking place near the highs recorded in October last year, updated last week. Against the background of the approaching Easter weekend, the activity of market participants is decreasing, which makes the current movement more inertial.Investors are focused on the macro data that has already been published, as well as statements by politicians, including former US President Donald Trump, who in his Truth Social account again called on the Federal Reserve to lower interest rates, criticizing the regulator's actions as overdue. Nevertheless, Fed Chairman Jerome Powell confirmed the central bank's commitment to follow exclusively economic logic, ignoring political pressure.The data released on Wednesday from the UK confirmed the downward trend in inflationary pressures. The core consumer price index slowed from 3.5% to 3.4%, while the overall index decreased from 2.8% to 2.6% in annual terms, with a forecast of 2.7%. On a month-on-month basis, inflation was 0.3%, with an expectation of 0.4%. The main impact on the data was a decrease in clothing prices, while the cost of services remains high at 4.7%, albeit with some weakening compared to February 5.0%. Financial market participants are already pricing in the likelihood of a 25 basis point reduction in the key rate by the Bank of England, from 4.50% to 4.25% at the May meeting. At the same time, a further reduction in inflation to the target level of 2.0% can be supported by global economic processes, in particular, US measures to adjust import duties. Analytical forecasts allow for three rate cuts in 2025, by 25 basis points each, reaching 3.75% by the end of the year.The US dollar, in turn, came under pressure amid the publication of mixed data on the US economy. Industrial production in March decreased by 0.3% against an increase of 0.8% a month earlier, which turned out to be worse than analysts' forecast (-0.2%). At the same time, retail sales pleased investors: the indicator jumped by 1.4% month—on-month (against +0.2% in February) and accelerated year-on-year from 3.5% to 4.5%, which slightly smoothed out the negative from production statistics.Technical analysis of GBP/USD for todayFrom a technical point of view, the indicators on the daily chart signal the continuation of the upward momentum. The Bollinger bands show expansion, supporting movement to new local peaks. The MACD indicator continues to form a steady buy signal: the histogram is above the signal line and shows an upward trend. Stochastic, having reached the maximum value zone (level 100), stabilized in the horizontal zone, which may indicate the risks of short-term overbought of the asset.Trading recommendationsIn the case of a confident breakout of the 1.3300 level, we form purchases with the expectation of moving towards 1.3400. It is reasonable to set a protective order at the level of 1.3250.If buyers fail to break through the 1.3300 level and the pair begins to decline with a breakdown down to 1.3250, then we will receive a sales signal with a target at 1.3150. In this case, we will set the stop loss at 1.3300.

FOREX fundamental analysis for EUR/USD on April 18, 2025The US administration's trade policy continues to wreak havoc on financial markets. Despite temporary concessions and periodic easing of tariff measures, the fundamental problem remains - the growing distrust of American assets. The US dollar, which has traditionally been viewed as a safe haven, is gradually losing its position, as clearly demonstrated by the EUR/USD pair's reaction to recent political statements.The situation is complicated by the growing confrontation between the US presidential administration and the Federal Reserve System. Donald Trump's criticism of Jerome Powell has reached such a level that the possibility of resigning the Fed chairman is being seriously discussed. Such a scenario, if implemented, could deal a serious blow to confidence in the American financial system.The difference in approaches between the Fed and the ECB is becoming more and more obvious. The European Central Bank has already implemented seven rate cuts in the current cycle, while the Federal Reserve is showing much more restraint. However, this caution is explained by fundamentally different economic conditions - while the ECB is struggling with a slowdown in growth, the Fed is forced to balance the risks of inflation and the consequences of trade wars.The US Treasury bond market is showing unprecedented volatility, which calls into question their traditional status as a defensive asset. Daily fluctuations in yields reach such magnitudes that many investors begin to consider treasuries rather as a high-risk instrument.EUR/USD prospectsThe current situation creates favorable conditions for the strengthening of the euro. Short-term corrections, such as a possible test of support around 1.1335, are likely to be temporary. Long positions on pullbacks with an eye on 1.1290 and 1.1170 look strategically justified.A successful test of the resistance in the area of 1.1440 may be a signal for increased purchases. However, it should be borne in mind that any unexpected easing of trade tensions can temporarily support the dollar. Nevertheless, given the complexity of the negotiation processes and the high demands of the American side, a quick resolution of the situation cannot be expected.

USD/JPY analysis on April 8, 2025During Thursday's Asian session, the US dollar, after a recent pullback from September lows. It is recovering moderately against the Japanese yen, testing the level of 142.65. The movement takes place against the background of the release of contradictory data on Japanese foreign trade.March exports showed a noticeable slowdown to 3.9% after February's 11.4%, falling short of the 4.5% expected by the market. At the same time, imports showed an increase of 2.0% after the previous decline, and the trade surplus amounted to 544.1 billion yen, which was higher than consensus forecasts.The Bank of Japan's monetary policy outlook remains cautious. At the upcoming meeting on April 30 - May 1, the regulator is likely to keep the rate at the current level of 0.50% and may revise down economic growth forecasts. Central bank Governor Kazuo Ueda confirmed his intention to continue the gradual normalization of policy, although he acknowledged that trade tensions could delay the achievement of the 2% inflation target.According to preliminary data, the current US-Japanese trade negotiations are showing "good progress." After the temporary cancellation of duties for 90 days, Japan is faced with a base rate of 10%, while maintaining significant 25% car export fees - a key item of Japanese supplies.Today, the attention of market participants will be focused on American statistics on applications for unemployment benefits and building permits. A moderate increase in the number of applications for benefits and a slight decrease in building permits are expected.USD/JPY technical analysis for todayThe technical picture confirms the downtrend, despite the current recovery. The indicators show mixed signals: the MACD shows weak signs of a reversal while maintaining an overall bearish mood, and the stochastic oscillator, being in the oversold zone, has not yet given clear signals of a trend change.For traders considering further weakening of the pair, the key entry level remains a breakdown of 142.00 down with the prospect of moving to 140.00. In this case, it is recommended to place a protective stop loss at 143.00.An alternative scenario assumes the development of corrective growth with a breakout of the level of 143.35, which opens the way to testing 145.00. In this case, we move the stop loss to 142.50.

The Australian dollar is showing a moderate decline against the US currency, correcting around 0.6341 after recently rising to its highest levels since the end of February. The pressure on the instrument is exerted by ambiguous macroeconomic data from Australia, where the labor market situation has shown contradictory signals. March statistics recorded an increase in the number of employed by 32.2 thousand after February's drop of 57.5 thousand, which was lower than the projected 40.0 thousand. At the same time, the unemployment rate increased slightly to 4.1%, which is still better than the expected 4.2%.The Reserve Bank of Australia maintained a cautious stance in the minutes of the last meeting, stressing the inability to determine the timing of rate changes due to the continuing uncertainty caused by US trade policy. The regulator has clearly outlined the need to continue fighting inflation, eliminating the possibility of premature monetary policy easing.The Australian dollar was positively influenced by encouraging data from China, where industrial production growth accelerated to 7.7% and retail sales increased to 5.9%. China's gross domestic product grew 5.4% year-on-year in the first quarter, exceeding analysts' expectations.There were mixed signals from the United States - a 1.4% increase in retail sales in March temporarily supported the dollar, but a 0.3% decline in industrial production indicated possible problems in the real sector of the economy.AUD/USD technical analysis for todayThe technical picture shows that the daily AUD/USD chart continues to expand the trading range while maintaining bullish signals. The MACD continues to generate buy signals, while the stochastic oscillator indicator turns down, indicating the likelihood of a short-term correction.For traders considering a bearish scenario, the signal for entry is a breakdown of the 0.6324 mark downwards with the prospect of a move to 0.6274. In this case, it is recommended to place a protective stop loss at the level of 0.6350.An alternative bullish scenario involves entering on a rebound from the 0.6324 support followed by consolidation above 0.6350, which opens the way to testing the 0.6408 level. It is advisable to set the stop loss for long positions at 0.6324.