China Keeps Lending Rates Steady; Trade War Raises Bets for Stimulus

Glendon

Forex

Economic

China–U.S. Trade War

Summary:

SHANGHAI (April 21): China kept benchmark lending rates steady on Monday for the sixth successive month, matching market expectations.

Stronger-than-expected first-quarter economic growth data might have reduced the urgency for immediate monetary easing, even as markets wager more stimulus is likely in coming months to keep growth on an even keel, amid an intensifying Sino-US trade war.

Policymakers are also wary of a weakening Chinese yuan and shrinking interest margins at lenders, limiting the scope for easing.

The one-year loan prime rate (LPR) was kept at 3.1%, while the five-year LPR was unchanged at 3.6%.

In a Reuters poll of 31 market participants conducted last week, 27, or 87%, expected no change to either of the rates.

China's gross domestic product (GDP) grew 5.4% in the first quarter, beating expectations, but markets fear a sharp downturn in the year ahead, as US tariff policies pose the biggest risk to the Asian powerhouse in decades.

Export data was yet to capture the impact of higher US tariffs, as many factories front-loaded their orders to beat the duties, analysts said.

A string of global investment banks have lowered their projections for China's economic growth this year, and expected more monetary easing measures to underpin the economy.

Xing Zhaopeng, senior China strategist at ANZ, said the steady LPR fixings suggested that policymakers remain in a wait-and-see mode.

"The impact of tariffs is mainly on exports. Given the sound economic growth in the first quarter, it may be easier to introduce targeted measures for export companies," Xing said.

"The LPR is not seen moving without a cut to the seven-day reverse repo rate first," economists at ING said in a note.

"Low inflation and strong external headwinds amid escalating tariff threats provide a strong case for easing. But currency stabilisation considerations may prompt the People's Bank of China (PBOC) to wait until the US Federal Reserve cuts borrowing costs."

Source: Theedgemarkets

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Warren Takunda

Stocks

Asian shares were mostly higher Monday and U.S. futures fell as U.S. tech giants prepared to release their latest earnings after the recent spate of market turmoil brought on by President Donald Trump’s trade war.

The futures for the S&P 500 and the Dow industrials were down 0.8%. Oil prices also fell.

U.S. President Donald Trump’s trade war remains a source of deep uncertainty. Economists worry his use of sharp tariff hikes could cause a recession if fully implemented and left in place for a while.

’’One thing that’s absolutely clear — and no longer debatable — is that the reputational hit to the U.S. brand is real, and it’s not fading quietly into the next news cycle,” Stephen Innes of SPI Asset Management said in a commentary.

Big Tech’s “Magnificent Seven” companies, a group consisting of Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms kick off earnings season this week. Since Trump’s inauguration, their combined market value had plunged by $3.8 trillion, or 22%, as of April 20.

Tesla, which makes its electric vehicles in Shanghai, is scheduled to release its full financial report Tuesday after already revealing that its first-quarter car sales dropped by 13% from the same time last year.

Tokyo’s Nikkei 225 index lost 1.3% to 34,279.92 in the absence of signs of significant progress toward a trade deal with Trump. Japanese automakers, in particular, are facing 25% tariffs on exports to the U.S. of autos and auto parts.

The Shanghai Composite index gained 0.5% to 3,291.34, while the Kospi in South Korea added 0.2% to 2,488.42.

Taiwan’s Taiex lost 1.5%, while the Sensex in India climbed 1.1%.

Markets were closed in Hong Kong and Australia.

U.S. markets were shut on Friday and were mixed at Thursday’s close. The Dow industrials sank 1.3%, while the S&P 500 edged up 0.1%. The Nasdaq composite shed 0.1%.

Treasury yields rose early Monday.

Also early Monday, U.S. benchmark crude oil sank 93 cents to $63.08 per barrel. Brent crude, the international standard, gave up 94 cents to $67.02 per barrel.

The U.S. dollar bought 140.76 Japanese yen, its weakest level since September, down from 141.80 yen. The euro rose to $1.1473 from $1.1404.

A recent drop in the dollar has economists worried that it might reflect something more ominous than the usual ups and downs as Trump tries to reshape global trade: a loss of confidence in the U.S. as a safe haven for investments.

Bitcoin was up nearly 3% at about $87,400.

In the bond market, the yield on the 10-year Treasury rose to 4.36% from 4.32% late Thursday.

Source: AP

Risk Warnings and Disclaimers

Add to Favorites

Blue River

Technical Analysis

EURUSD has broken through 1.1500 on growing concerns over Fed independence and mounting political instability in the US. Today’s forecast suggests further upside is possible, with 1.1600 as the next key target — provided bulls defend the 1.1500 support zone.

EURUSD forecast: key trading points

● Market focus: public holiday in Europe

● Current trend: strong bullish momentum

● EURUSD forecast for 21 April 2025: 1.1500 and 1.1600

Fundamental analysis

EURUSD continues to climb rapidly, driven by weakness in the US dollar. The greenback came under pressure after reports surfaced that the White House is exploring legal grounds to remove Federal Reserve Chair Jerome Powell. President Donald Trump has reportedly voiced frustration over the Fed’s reluctance to cut interest rates.

This development has intensified market concerns about political interference in central bank independence, compounding existing unease over trade tensions and uncertainty surrounding Trump’s broader economic agenda.

Chicago Fed President Austan Goolsbee also warned over the weekend that new tariffs could drag on US economic growth, further fuelling demand for the euro and safe alternatives to the dollar.

EURUSD technical analysis

On the H4 chart, EURUSD is firmly within a rising price channel. The Alligator indicator confirms the uptrend, and the breakout above 1.1500 signals continued bullish strength.

As long as bulls hold the price above 1.1500, a move toward 1.1600 is likely in the near term. However, if bears manage to push the pair back below 1.1500, a short-term correction toward 1.1400 could develop.

Source：Technical Analysis

Risk Warnings and Disclaimers

Add to Favorites

Michelle

Cryptocurrency

Bitcoin (BTC) experienced a rapid surge on the first day of the week, driven by growing optimism surrounding the United States’ global trade agreements. According to CoinMarketCap data, Bitcoin traded at around $84,000 early in the day, quickly rising to surpass $87,000 and achieving a 2.1% gain throughout the day. This movement sparked a sense of optimism in the broader cryptocurrency market, positively impacting the prices of several leading altcoins.

Bitcoin Aims for $90,000

Last week proved to be quite tumultuous for Bitcoin. Weekly data from CoinMarketCap revealed that the largest cryptocurrency struggled to surpass the $86,000 mark, with its price dipping to as low as $83,200 at one point. However, particularly favorable developments over the weekend helped to elevate Bitcoin’s price.

Bitcoin Price

With this surge, the impacts of the sharp decline experienced earlier in the month began to diminish. Bitcoin had previously fallen to $75,000 due to President Donald Trump‘s imposition of additional tariffs of at least 104% on Chinese goods. Recent statements by Trump have heightened expectations that the trade war could ease, improving investor sentiment.

Trump indicated that the White House has resumed tariff negotiations with China, providing hope to the markets. Experts believe that a reduction in trade war concerns could pave the way for a new wave of growth in the cryptocurrency market. This situation is considered critical for Bitcoin, with potential price movements closely tied to the results of these negotiations.

One of the main reasons for Bitcoin’s sudden rise is attributed to the new Bitcoin purchase made by the publicly-traded Japanese company Metaplanet. The company’s CEO, Simon Gerovich, announced today that they have acquired more BTC. Additionally, cryptocurrency research firm 10x Research suggested that Bitcoin might be poised for significant growth shortly. According to the firm, the downward compression pattern forming in BTC price could set the stage for a sharp upward breakout.

Altcoins Follow Bitcoin’s Lead

Bitcoin’s rise also positively influenced other major altcoins such as Ethereum (ETH) , XRP, and BNB. Ethereum saw a 1.4% increase throughout the day, while XRP gained 1.5%. Popular meme coin Dogecoin (DOGE) and BNB both rose approximately 1.4%, and Cardano (ADA) saw an increase of around 1%. However, Solana (SOL) did not manage to capture the small rally seen by other altcoins.

Source: CryptoSlate

Risk Warnings and Disclaimers

Add to Favorites

FastBull Featured

Daily News

[Quick Facts]

1. Protests erupt across U.S. over recent government policies.

2. Poll: Trump's economic approval rating hits record low.

3. Trump considers firing Fed Chair Jerome Powell.

4. Daly: Rate cuts still possible this year.

5. U.S. tariffs disrupt Japan's inflation outlook, BoJ may hike rates again.

[News Details]

Protests erupt across U.S. over recent government policies

Protests took place in multiple U.S. cities on April 19th, including Washington, D.C., New York, San Francisco, and Boston, with demonstrators condemning the administration's policies on mass layoffs, tariffs, and immigration deportations. In front of the White House, protesters held signs reading "Stop Illegal Deportations," "Power to Workers, Not the Rich," and "A Constitutional Crisis Is Here." Frank, a worker at a Washington-based nonprofit, criticized the administration for revoking student visas and deporting immigrants without due process. Similar rallies occurred in Denver, Portland, and Anchorage, with hundreds to thousands of protesters voicing opposition to immigration crackdowns and deep cuts to federal jobs.

Poll: Trump's economic approval rating hits record low

A CNBC national economic survey released on April 19th revealed that President Trump's approval rating on economic issues has plummeted to a historic low of 43%, with 55% disapproval. The poll attributed the decline to widespread dissatisfaction with his handling of tariffs, inflation, and government spending. Notably, 49% of respondents expect the U.S. economy to worsen over the next year. While 44% approve of Trump's economic management, 51% oppose it.

Trump considers firing Fed Chair Jerome Powell

On Friday, Hasset, Director of the National Economic Council, stated that Trump and his team are still exploring whether to remove Fed Chair Jerome Powell, a move that could undermine the central bank's independence and roil global markets. When being asked about whether to fire Fed Chair Jerome Powell, Hasset said "The president and his team will continue to study."

Earlier, Trump escalated his feud with Powell, accusing him of "playing politics", saying he couldn't wait for the Fed chair's "termination." Trump told reporters on Friday, "If we had a Fed Chairman that understood what he was doing, interest rates would be coming down too." Powell has maintained that his removal is legally prohibited and reiterated his commitment to serve until his term ends in May 2026. His role as a Fed governor extends through January 2028.

Daly: Rate cuts still possible this year

San Francisco Fed President Mary Daly stated on Friday that she continues to support the median forecast in the March SEP, projecting two 25-basis-point rate cuts this year. If inflation does ease as expected, we would need to reduce the policy rate to avoid over-tightening the economy gradually.

Daly emphasized patience, noting, "We can imagine adjusting policy rates at some point, but there's no urgency. We have ample time and space to observe."

She highlighted that persistent sluggish inflation allows the Fed to await clearer impacts from the new administration's policies, including tax cuts, spending reductions, deregulation, and immigration reforms. Recent signals suggest Trump's tariffs may not be as broad or swift as initially announced, potentially softening their economic impact. So far, policy uncertainty has not dampened economic activity.

U.S. tariffs disrupt Japan's inflation outlook, BoJ may hike rates again

Escalating U.S. tariffs could destabilize Japan's inflation trajectory, where domestic price pressures remain weak. Trade tensions further cloud prospects, as U.S. tariffs and threats suppress global growth and weaken demand-driven inflation. The BoJ is still expected to raise rates this summer, likely in June, unless Japan faces a sharp economic downturn.

[Today's Focus]

UTC+8 20:30 Chicago Fed President Goolsbee interviews with CNBC

UTC+8 22:00 ECB Executive Board Member Centeno speaks

Risk Warnings and Disclaimers

Add to Favorites

Golden Gleam

Technical Analysis

Gold has tested 3,380 USD and continues to push higher, nearing the long-term target of 3,500 USD, potentially ahead of schedule. Today’s forecast for 21 April 2025 anticipates a retest of 3,386 USD and further bullish momentum toward 3,400 USD. The backdrop of global trade tensions and a weak dollar continues to favour gold’s ascent.

XAUUSD forecast: key trading points

● Gold (XAUUSD) set another all-time high and continues climbing

● USD weakness boosts gold’s appeal for non-dollar investors

● XAUUSD forecast for 21 April 2025: 3,386 USD

Fundamental analysis

Gold (XAUUSD) surged to a new record high at 3,380 USD as demand for safe-haven assets intensifies amid worsening global trade tensions. The sharp decline in the US dollar also continues to support gold’s upside.

Last week, President Donald Trump initiated a new investigation into potential tariffs on all critical mineral imports into the US. This move signals an escalation in trade disputes, particularly with China, and has further rattled markets.

The dollar’s slide to a three-year low has made gold more attractive to holders of other currencies, fuelling strong international demand.

Additionally, the recent interest rate cut by the European Central Bank has boosted demand for non-yielding assets like gold in a low-return environment.

Overall, the outlook for gold remains bullish.

XAUUSD technical analysis

On the H4 chart, XAUUSD remains in a strong uptrend, with the current impulse wave aiming for 3,386 USD. A successful retest of this level may open the path toward 3,400 USD and beyond.

Gold (XAUUSD) Accelerates — Yearly Targets May Be Hit Ahead Of Schedule_1

Source：Technical Analysis

Risk Warnings and Disclaimers

Add to Favorites

Glendon

Economic

Forex

An independent central bank is seen by most (including this newsletter) as the bedrock of a functional economy. Officials steer the economy by calibrating the benchmark interest rate on which bank loans and mortgages, among other debt, are based.

Corporations and consumers, in general, like low interest rates because the cost of borrowing is cheaper. The former is incentivized to expand and invest, which, in turn, tend to increase income and spending among the latter. But such behavior can overheat the economy, causing prices to shoot up.

U.S. President Donald Trump's repeated calls for Federal Reserve Chair Jerome Powell to cut interest rates might make businesses and people happy — at the cost of letting inflation run rampant again. Factor in Trump's tariffs, which are taxes on imports and hence fundamentally price increases, and inflation could be getting two shots in the arm.

That's why central bankers tend to operate independently from the government. An administration that aims to please the populace might cut rates despite high inflation, leading to further economic difficulties.

It's a relief markets in the U.S. and Europe were on a break for the Good Friday holiday when Trump made his comments.

What you need to know today

Trump again calls for Powell to cut ratesU.S. President Donald Trump said Friday that "if we had a Fed Chairman that understood what he was doing, interest rates would be coming down, too." The White House said Friday that officials are assessing whether they can remove the Fed chair. This is not the first time Trump has criticized Powell's approach to U.S. monetary policy.

Growing disapproval of Trump's economic handlingAccording to a CNBC survey of 1,000 Americans, 55% of respondents disapproved of Trump's handling of the economy, the first time in any CNBC poll that he has been net negative on the economy while president. More Americans now believe the economy will get worse than at any time since 2023, and they are sharply more pessimistic about the stock market, according to survey results.

China keeps interest rates steadyAsia-Pacific markets were mixed Monday. Japan's Nikkei 225 lost roughly 1.3%. However, mainland China's CSI 300 added around 0.3% as the People's Bank of China kept its loan prime rates unchanged. The 1-year LPR currently stands at 3.1% and the 5-year rate is at 3.6%. Economists polled by Reuters had expected this outcome, which suggests the PBOC is prioritizing the stability of the yuan over stimulating the economy.

Beijing vows 'reciprocal countermeasures' China's Ministry of Commerce warned on Monday that Beijing firmly opposes any party reaching a deal at the expense of China's interests. If this happens, China will not accept it and will resolutely take reciprocal countermeasures," according to a CNBC translation. The Trump administration is reportedly planning to use tariff negotiations to pressure U.S. partners into curtailing their dealings with China.

U.S economic activity might 'fall off' in summerThe U.S. economy could be experiencing an elevated level of activity now as shoppers and businesses stock up on goods before tariffs kick in, Chicago Fed President Austan Goolsbee said Sunday. "Activity might look artificially high in the initial, and then by the summer, might fall off — because people have bought it all." Sectors most affected include the auto industry and electric components, Goolsbee said.

Executive order to overhaul State DepartmentThe Trump administration could soon roll out sweeping changes to the U.S. State Department, according to a 16-page draft executive order obtained by CNBC. If enacted, the order would shutter American embassies across Southern Africa, eliminate bureaus that work on issues like democracy and human rights, as well as international organizations like the United Nations.

[PRO] Earnings might displace tariffs as focusMarket gyrations because of Trump tariffs might be subdued — but not entirely subside — this week, according to strategists. Investor attention will turn to first-quarter earnings reports, with Tesla and Alphabet announcing their performance on Tuesday and Thursday, respectively.

Trump tariffs push Asian trade partners to weigh investing in massive Alaska energy project

Alaska has long sought to build an 800-mile pipeline that would eventually cool gas into liquid for export to Asia. The project, which has a staggering price tag topping $40 billion, has been stuck on the drawing board for years.

Alaska LNG, as the project is known, is showing new signs of life — with Trump touting the project as a national priority. U.S. Treasury Secretary Scott Bessent said earlier this month that the liquified natural gas project could play an important role in trade negotiations with South Korea, Japan and Taiwan.

"We are thinking about a big LNG project in Alaska that South Korea, Japan [and] Taiwan are interested in financing and taking a substantial portion of the offtake," Bessent told reporters on April 9, saying such an agreement would help meet Trump's goal of reducing the U.S. trade deficit.