Asian stocks rose on Tuesday, but futures hint at European and US market weakness as President Donald Trump hinted at possible exceptions to auto-related tariffs.

On Monday, Trump said he might adjust the 25% tariffs on imported cars and parts from countries like Mexico and Canada. These tariffs could make cars thousands of dollars more expensive, but Trump said car companies need some time to start manufacturing vehicles in the U.S.

Markets are stabilizing as the tech exemptions have given hope for possible negotiations after the president’s tariffs earlier this month caused global stocks to lose $10 trillion and triggered a sell-off in US Treasuries. However, the constant changes are making investors nervous, and business leaders, like JPMorgan’s Jamie Dimon, have warned that Trump’s attempt to change global trade rules could lead to a US recession.

U.S. Treasury bonds stabilized overnight after last week’s big sell-off, while the dollar continued losing popularity with investors.

Australia’s central bank was cautious about cutting interest rates further, saying May would be a good time to review its policies. This was mentioned in the minutes of its April meeting released in the Asian session. The April meeting was held just before President Trump’s tariffs disrupted global markets.

Gold prices continue to hold the high ground having seen a brief pullback yesterday met with renewed buying pressure. For a full breakdown on Gold, read: Gold (XAU/USD) price update: is price action pointing toward fresh highs? $3250 loading….?

Chart of the day – US Dollar index

From a technical standpoint, the US Dollar Index selloff could be running out of steam.

Yesterday’s failure by bears to print a fresh low and a daily candle close back above support may hint at the potential for a US Dollar rebound.

The 14-period RSI is eyeing a break back above the oversold 30 handle which could be seen as a sign of changing momentum.

A bullish move would be intriguing as the index will likely test the psychological 100 level, with acceptance needed if a sustained USD recovery is to take place.

The tariff shadow and uncertainty however, mean that such a recovery may struggle to gain traction just yet.

US Dollar Index (DXY) Chart, April 15, 2025

Source: TradingView.com (click to enlarge)

• 99.56
• 99.00
• 97.70

Resistance

• 100.00
• 100.61
• 101.18

Source: ACTIONFOREX

Source: AP

LONDON (April 15): The International Energy Agency (IEA) on Tuesday sharply cut its forecast for the growth in global oil demand this year due to escalating trade tensions, a day after a similar move by producer group Opec.

"The deteriorating outlook for the global economy amid the sudden sharp escalation in trade tensions in early April has prompted a downgrade to our forecast for oil demand growth this year," the IEA, which advises industrialised countries, said in a monthly report.

"Growth is expected to slow further in 2026, to 690,000 bpd, as lower oil prices only partly offset the weaker economic environment."

Source: Theedgemarkets

Global investment banks are lowering their projections for China's economic growth this year as U.S. President Donald Trump's aggressivetariffsare expected to take a toll on the world's second-largest economy.

Some of the banks had upgraded their forecasts for China just a month ago, encouraged by signs of improvement in the sputtering economy in the first two months of the year.

Sino-U.S. trade tensions have intensified after Trump announced reciprocal tariffs on April 2, leading to tit-for-tat duties on each other's goods. By April 11, China was all but under a U.S. trade embargo as tariffs rose to 145%.

Gross domestic product growth in the first quarter is forecast at 5.1% year-on-year, while full-year expansion is predicted to hit 4.5% in 2025, compared with last year's 5.0% pace, according to a Reuters poll, falling short of the official target of around 5.0%.

China is due to release its first-quarter GDP data and activity indicators on Wednesday.

Here is a summary of some forecasts for the China's GDP.

** In the previous factbox, some of the institutions raised their GDP forecast for this year following some early signs of economic recovery.

KEY QUOTES:

** UBS

"Under our current new baseline assumptions, we estimate tariff hikes this year to pose a more than two-percentage-point drag on China's GDP growth. We expect China's exports to the U.S. to fall by 2/3 in the coming quarters and its overall exports to fall by 10% in USD terms in 2025, the latter also takes into account slower U.S. and global growth.

While tariff exemptions will likely reduce the inflationary pressure somewhat in the U.S., we expect they are unlikely to affect importers' desire to find alternatives to imports from China. Therefore, we expect continued negative impact of the tariff hikes on China's exports in 2026."

** CITI

"We see little scope for a deal between the U.S. and China after recent escalations.

Domestic policies could focus more on demand expansion. We expect additional funding of 1 to 1.5 trillion yuan ($205 billion) while policy implementation accelerates. The People's Bank of China (PBOC) could cut policy rates by 40 basis points and reserve requirement ratio (RRR) by 100 basis points. Policy constraints such as the exchange rate and debt management could stay, however. With prolonged elevated uncertainties, policymakers could choose to keep more powder dry."

** GOLDMAN SACHS

"Recent events have underscored the speed with which President Trump can alter tariff rates, while also highlighting the likelihood that high tariffs on Chinese goods will persist.

We estimate that 10 to 20 million workers in China may be exposed to U.S.-bound exports. The combination of extremely high U.S. tariffs, sharply declining exports to the U.S., and a slowing global economy is expected to generate substantial pressures on the Chinese economy and labor market."

Source: TradingView

Unemployment held steady at 4.4%, where it has been since last November, while employment rose by a better-than-expected 206k on a rolling 3-month basis.

Meanwhile, earnings continued to increase at a rapid clip, albeit somewhat softer than consensus. Overall pay rose 5.6% YoY, and regular pay by 5.9% YoY over the same period. While one old hope that earnings pressures fade somewhat as the year progresses, this is by no means guaranteed, even if risks to the labour market are biased towards weakness, as the impacts of the National Insurance changes are felt from Q2 onwards. Right now, though, the current clip of pay growth is clearly incompatible with a sustainable return to the BoE's 2% inflation target over the medium-term.

In any case, though, policymakers on Threadneedle Street are unlikely to place much weight on this morning's figures. While well-documented issues continue to plague the unemployment data, the earnings series is now also subject to question marks, and potential revisions, given late pay data submissions. At the present rate, the ONS seem unlikely to have got their house ‘in order' until the tail end of next year at the earliest.

Taking that into account, it's tough to imagine today's data materially changing the policy outlook for the ‘Old Lady'. A 25bp cut at the next meeting in early-May remains nailed on, with further such cuts likely to be delivered on a quarterly basis over the remainder of the year, as headline CPI remains on a path towards 4% over the summer.

That said, risks to the outlook do now tilt in a distinctly more dovish direction, as downside growth risks continue to mount, chiefly as a result of President Trump's numerous tariff announcements. Were policymakers to become confident that the risks of inflation persistence had sufficiently abated, a more rapid pace of normalisation could be delivered. Tomorrow's March CPI data will, hence, be considerably more impactful in moving the needle for the BoE.

Source: Pepperstone