April 14th Financial News

Daily News

Summary:

Williams: U.S. economic growth may be below 1%; Lagarde: Ready to act to maintain market stability. U.S. extends sanctions on Russia for one year...

[Quick Facts]

1. Fed Collins: The Fed will stabilize markets if necessary.

2. Kashkari: No need for market rescue currently.

3. Musallem: Risks of rising inflation and labor market weakness persist.

4. Williams: U.S. economic growth may be below 1%.

5. Lagarde: Ready to act to maintain market stability.

6. U.S. exempts key tech goods from "Reciprocal Tariffs" with "180-degree policy reversal".

7. U.S. extends sanctions on Russia for one year.

8. The UK government has approved emergency legislation to take control of British Steel.

[News Details]

Fed Collins: The Fed will stabilize markets if necessary

Boston Fed President Collins stated that markets are functioning well overall, with no current concerns about liquidity. If issues arise, the Fed has tools to address them. Historically, the Fed has acted swiftly to stabilize markets and is "absolutely" ready to assist if needed.

Kashkari: No need for market rescue currently

Minneapolis Fed President Kashkari told CNBC on Friday that while tariffs typically strengthen the US dollar, recent declines suggest a shift in investor sentiment amid escalating trade tensions. That is, as Trump's trade war continues to escalate, recent market trends indicate that investors are fleeing from the US, which has traditionally been the safest place for investment.

There is no necessity for the Fed to intervene in the U.S. Treasury bond market. What seeing currently are "pressures" in the market operation, rather than chaos. If necessary, the Fede has tools to deal with the situation, but they will only be used in extreme cases.

The Fed must act with caution to avoid giving the impression that the Fed's determination to fight inflation has wavered. However, he doesn't think this determination has weakened.

Musallem: Risks of rising inflation and labor market weakness persist

St. Louis Fed President Musallem warned of potential concurrent risks of higher inflation and a softer labor market, urging vigilance in monitoring economic data.

Now, it remains appropriate to stay vigilant during monetary policy formulation, carefully analyze the upcoming data, and comprehensively assess the risks faced by the employment and inflation prospects.

Retaliatory tariffs from trade partners and tightening financial conditions as well as political uncertainty could dampen U.S. growth and employment. Keeping inflation expectations anchored remains critical for flexible policymaking.

Williams: U.S. economic growth may be below 1%

Reported Friday, New York Fed President John Williams noted increasing uncertainty, particularly in soft data like business surveys, with consumer and business confidence declining sharply.

Tariffs are projected to push inflation to 3.5%-4% this year, well above the Fed's 2% target as well as the 2.5% PCE inflation reading in February.

He expects U.S. growth to slow significantly, potentially below 1%, with unemployment rising from 4.2% to 4.5%-5%.

Current monetary policy remains appropriate given tight labor markets and elevated inflation.

Lagarde: Ready to act to maintain market stability

ECB President Christine Lagarde reiterated the ECB's commitment to intervene if needed to stabilize markets. "The European Central Bank is monitoring and is always ready to use the instruments that it has available, and has come up in the past with the adequate instruments and tools that were necessary in order to procure price stability, and of course financial stability, because one doesn't go without the other,” she said in Warsaw, emphasizing the link between price and financial stability are entered a communication blackout ahead of the April 17 ECB rate decision.

U.S. exempts key tech goods from "Reciprocal Tariffs" with "180-degree policy reversal"

On the evening of April 11, the U.S. Customs and Border Protection (CBP) announced that the federal government had agreed to exempt smartphones, computers, chips, and other electronic products from the so-called "reciprocal tariffs." According to CBP documents, these products are excluded from the "reciprocal tariffs" imposed on trade partners. The exemptions apply to electronics imported into the U.S. after April 5th, and businesses can seek refunds for previously paid "reciprocal tariffs".

Bloomberg reported that the move could alleviate price pressures for U.S. consumers and benefit tech giants like Apple and Samsung. Financial analyst Hussein Qubaisi noted that this marks a "180-degree policy reversal" by the U.S. government on tariff policies.

U.S. extends sanctions on Russia for one year

According to the U.S. Federal Register website on April 12th local time, U.S. President Donald Trump signed an executive order stating, " Pursuant to the National Emergencies Act, the national emergency declared in Executive Order 14024 is hereby continued for one year."

This effectively extends a series of sanctions imposed by former President Joe Biden against Russia for another year. On April 15th, 2021, then-President Biden invoked the International Emergency Economic Powers Act (IEEPA) to issue EO 14024 declaring a national emergency to counter "specific harmful foreign activities of the Government of the Russian Federation" that allegedly threatened U.S. national security, foreign policy, and the economy. The order froze Russian assets and imposed initial sanctions.

On March 8th, 2022, Biden signed EO 14066, expanding the scope of EO 14024 to include energy sector sanctions2.

Additional measures were introduced through EOs 14039 (Aug 20, 2021), 14068 (Mar 11, 2022), 14071 (Apr 6, 2022), and 14114 (Dec 22, 2023), further refining sanctions targeting Russian entities and individuals.

The UK government has approved emergency legislation to take control of British Steel

The UK government has approved emergency legislation to take control of British Steel, ensuring its blast furnaces remain operational. If the furnaces at the Scunthorpe plant were to close, the UK would become the only G7 country unable to produce raw steel from iron ore, coke, and other materials. The Steel Industry (Special Measures) Bill was passed by Parliament and approved by the King within six and a half hours on April 12th.

This nationalization marks the largest government bailout since the 2008 banking crisis. Under the bill, non-compliance with government orders could result in fines or two-year prison sentences for company officials. The government has allocated £2.5 billion to support the industry, prioritizing its strategic importance for national security and economic stability.

[Today's Focus]

UTC+8 20:30 Canada Feb wholesale sales monthly data

UTC+8 23:00 U.S. March NY Fed 1-Year inflation expectations

Risk Warnings and Disclaimers

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Balogun Opeyemi

Forex

Fundamental Analysis:

The Japanese yen continues to face downside pressure amid the Bank of Japan’s ultra-dovish stance, despite the central bank’s recent decision to end its negative interest rate policy. While that marked a historic shift, Governor Kazuo Ueda emphasized that any further rate hikes would be gradual, keeping the yen on the defensive.

Meanwhile, the U.S. dollar remains supported by strong economic data and cautious remarks from Federal Reserve officials. Last week’s comments from Fed Chair Jerome Powell reinforced the view that the central bank is in no rush to cut rates, especially with inflation proving sticky. The upcoming U.S. CPI data will be critical—any upside surprise could further delay Fed easing, lifting Treasury yields and supporting the greenback.

Another key factor weighing on the yen is the persistent gap in U.S.-Japan bond yields. The yield on the U.S. 10-year note remains well above its Japanese counterpart, making the dollar more attractive in carry trades. Unless the BoJ signals a more aggressive tightening path or intervenes directly in currency markets, USD/JPY may remain on an upward trajectory.

Technical Analysis: Key Levels to Watch

Strong resistance is anticipated on the upside around the 146.00 mark. If the pair continues to rise, it may reach 148.07; a break above this level will signal a shift in the trend toward bullishness. A clear break above this area might indicate more bullish momentum.

On the downside, a crucial support level is still at 141.67. Another important hurdle below this is the September 2024 low, or 139.62 level. If these levels are broken, the USD/JPY could fall more quickly approaching the psychological threshold of 135.00.

Risk Warnings and Disclaimers

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Balogun Opeyemi

Commodity

Fundamental Analysis:

Market sentiment turned risk-averse after U.S. President Donald Trump announced a hike in tariffs on Chinese goods to 145%. In response, China imposed a 125% retaliatory tariff on U.S. imports during the North American session. The tit-for-tat tariff escalation reignited fears of a global economic slowdown, prompting investors to flock to gold.

Historically, such macroeconomic tensions drive investors toward safe-haven assets like gold. With risk appetite shrinking, capital rotation into bullion has accelerated, pushing prices to record highs. The growing unpredictability of trade relations between the world’s two largest economies has also complicated the monetary policy outlook for the Federal Reserve, potentially limiting its ability to cut rates in the near term.

At the same time, the U.S. Dollar Index (DXY) tumbled to 99.01, its lowest level since May 2022 under pressure from trade concerns and expectations that U.S. economic growth could be impacted. The weaker dollar adds an additional tailwind to gold, as it becomes cheaper for non-dollar investors, reinforcing the metal’s upward momentum.

XAU/USD Technical Outlook

Gold remains firmly in bullish territory after breaking through previous resistance levels. The recent all-time high of $3,245 marks a key level, and a sustained break above this could open the door toward the psychological target of $3,250. If bullish momentum continues, the next upside resistance lies at $3,300.

On the downside, immediate support is seen at $3,200. A break below this level could trigger a deeper correction toward $3,167. If that support fails to hold, gold may test the $3,150 level, which aligns with previous consolidation and could attract dip buyers. However, a breach below $3,150 would indicate a loss of short-term bullish control and possibly lead to a retest of the $3,100 zone.

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Economic

ECB puts rate pause on the back burner

The European Central Bank meets on Thursday to set monetary policy amidst a turbulent time for financial markets as US President Trump’s trade policies continue to wreak havoc. Having already lowered its deposit rate by 150 basis points to 2.50%, the ECB was contemplating a pause in April to assess the impact of the previous easing. But the economic outlook has deteriorated markedly since the beginning of April when Trump launched his reciprocal tariffs, targeting virtually all of America’s trading partners.

Whilst it is too soon to gauge the immediate hit on businesses, the scale of the market fallout suggests investors are in panic mode. For the ECB, the outlook is complicated by German’s massive fiscal stimulus, as it’s uncertain whether this will be enough to cushion the entire Eurozone from Trump’s trade salvos.

Nevertheless, with inflationary pressures across the euro are subsiding once again, playing it safe and cutting rates further is probably the better option for the ECB. Traders are convinced policymakers will lower rates by 25 bps at the April meeting and have priced in further two cuts before the year end.

The dovish expectations haven’t been a huge drag on the euro, however, as the Eurozone’s large trade surplus with the rest of the world has been providing the currency with some safe-haven attributes during this tumultuous period. And with the US dollar coming under pressure again, the euro has jumped above the $1.13 level.

Unless President Christine Lagarde surprises with a very dovish rhetoric in her press briefing, the euro is unlikely to react much. In fact, a greater risk is if Lagarde disappoints the markets by not sounding dovish enough.

On the data front, Germany’s ZEW economic sentiment index will be watched on Tuesday, along with the Eurozone’s final CPI estimate for March on Wednesday.

Is a BoC cut a coin toss?

A day of before the ECB, the Bank of Canada will announce its decision but it’s doubtful if it will cut rates again. The minutes of the BoC’s March meeting revealed that policymakers would have kept rates unchanged at 3.0%, instead of cutting them, had it not been for Trump’s tariffs. Trade tensions have only intensified since the last meeting, but investors see only a 40% chance of a 25-bps reduction.

Canada has obtained a temporary reprieve from the White House, with the 25% tariffs on pause for the goods that fall under the USMCA agreement. Yet, the high degree of uncertainty about what level of duties Canadian exporters will be facing in the months and years ahead is likely to weigh on the economy.

The problem for the BoC, however, is that it’s already slashed rates by a total of 225 bps, and more importantly, CPI readings have started to pick up again. With Canada imposing its own retaliatory tariffs on some US goods, inflation will probably rise further in the coming months.

Hence, investors will be watching Tuesday’s CPI report very closely, as there’s a reasonable chance the BoC may opt for another rate cut the following day.

If that turns out to be the case, the Canadian dollar might suffer a mild pullback against the US dollar.

UK CPI and wage growth on pound’s radar

The pound initially benefited from the dollar’s weakness but as the stock market selloff accelerated, the bulls ran out of steam and cable took a tumble. Aside from the risk-off sentiment and worries about the impact of tariffs on the UK economy, rising gilt yields have also been weighing on sterling as this would make it more difficult for Keir Starmer’s government to respond to an economic slowdown with looser fiscal policy.

The primary strain on sterling, however, is the expectation that the Bank of England will need to reduce rates more aggressively this year amid the worsening outlook. A 25-bps rate cut is 90% priced in for the May meeting, but those expectations could change next week if the incoming employment and CPI data fuel concerns about persisting inflation.

The headline rate of CPI fell more than forecast in February to 2.8% y/y and may ease further in March before edging up again. The CPI report is out on Wednesday, while ahead of that on Tuesday, the latest employment stats will come to the fore. In particular, wage growth will be key for the BoE decision.

Stronger-than-expected numbers could dampen rate cut bets, potentially giving the pound a leg up.

China GDP growth to remain within target, for now

China will publish its latest GDP estimate on Wednesday as it refuses to give in to Trump’s demands for fairer trade treatment, escalating the war. The Chinese economy grew by 5.4% y/y in the fourth quarter of 2024 but is projected to have slowed to 5.1% in Q1.

Industrial production and retail sales numbers for March will also be released on the same day. The data is unlikely to spur much reaction even if there’s a significant surprise either to the downside or upside as investors will be more concerned about how China navigates itself through Trump’s trade storm.

With Chinese exports now being charged 125% levies and US goods facing similar tariffs, trade between the world’s two largest economies could shrink drastically in the coming months. The government may therefore choose to accompany the GDP press conference with a fresh stimulus announcement as it tries to boost domestic consumption to counter Trump’s tariffs.

Aussie jobs, New Zealand and Japanese CPI on tap

The Australian dollar would be the biggest beneficiary from any significant stimulus update out of Beijing, as speculation grows about whether or not the Reserve Bank of Australia will cut rates at its next meeting on May 20. A 25-bps rate cut has become fully priced in following the spike in trade frictions and next week’s employment report, due on Thursday, may not necessarily change those bets much.

The New Zealand dollar has also endured quite a bit of volatility since Trump’s reciprocal tariffs were unveiled, as risk-sensitive currencies have been caught between the swings in equity markets, hopes of more stimulus by China, and expectations of steeper domestic rate cuts.

However, the focus for the kiwi on Thursday will be the quarterly CPI prints. The Reserve Bank of New Zealand just trimmed its cash rate to 3.5% and another 25-bps cut is almost fully baked in for the May meeting.

A hotter-than-expected CPI figure could dent those expectations slightly but probably not too significantly.

Staying in the region, Japan will also be publishing CPI numbers. Prior to the market turmoil, the Bank of Japan was expected to deliver nearly two rate increases in 2025. But the odds have now fallen to less than one hike. If the March CPI readings out on Friday show that inflation in Japan is not going to dissipate quickly, the yen could stretch its latest advance against the greenback.

US data might get overshadowed by trade mayhem

Finally, retail sales figures will be the highlight in the United States where it’s going to be a relatively lighter agenda. Tariff headlines are bound to dominate, however, as the uncertainty sparked by Trump’s erratic decisions is making markets nervous even as he rows back on some of the measures.

Trump’s position on China is in particular focus as neither side appear to be easing up on their defiant stance.

Still, an upbeat retail sales report on Wednesday could lift sentiment on Wall Street and provide support to the US dollar by lessening the risk of a recession.

Retail sales are forecast to have risen by 1.3% m/m in March, compared to a 0.2% increase in the prior month.

Industrial production figures are also due on Wednesday. Other data will include the Empire State manufacturing index on Tuesday, as well as building permits, housing starts and the Philly Fed index on Thursday.

Most Western markets will be shut on Friday for the Easter celebrations.

Source: XM

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

Risk Warnings and Disclaimers

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Owen Li

Economic

What Did Williams Reveal About Inflation?

Fed member Williams has notably addressed tariffs directly, marking a shift in focus. Contrary to expectations, recent Producer Price Index (PPI) figures reflect a decline in investor sentiment. Additionally, the Michigan inflation expectation statistic has surged from 5% to 6.7%, signaling growing concerns among economists.

How Will These Changes Impact the Economy?

Williams pointed out that inflation levels are set to rise considerably, with tariffs posing a significant threat to annual economic growth. He stated, “Tariffs will raise inflation this year by 3.5% to 4%. The economy is enveloped in uncertainty, with tariffs and trade playing critical roles in this dynamic.”

Despite the market’s reaction, expectations for interest rate reductions have diminished. Reports indicate that a meeting between the leaders of China and the U.S. is on the horizon. Should they fail to reach an agreement, the resulting uncertainty may lead to a scenario where recession fears overshadow concerns about a depression.

Williams indicates inflation could rise significantly.
Current monetary policies provide flexibility for central banks.
Projected economic growth may slow to 1% this year.
Unemployment rates might increase to between 4.5% and 5%.

The ramifications of these developments are complex, with experts cautioning against overlooking the interplay of inflation, trade, and interest rates. As the economic landscape continues to evolve, stakeholders must remain vigilant and adaptable to these shifting conditions.

Source: CryptoSlate

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

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Thomas

Cryptocurrency

Bitcoin ($BTC) is showing technical signals of an imminent bullish reversal since its momentum indicators are diverging from its current price action. The setup indicates decreasing downward momentum with declining prices, a signal typically monitored to track the changes in market cycles.

MACD Divergence Suggests Momentum Shift

As noted in a tweet by Javon Marks, this divergence on the chart of Bitcoin may have the price making a strong move up if supported by any further technical signals. The MACD lines are converging right now, which suggests there could be an impending bullish crossover. Such a crossover would terminate the existing downtrend if confirmed with rising volume and a close above the local high.

The current chart on the BTC/USD depicts a classic divergence condition in which the prices make lower lows but the MACD indicator makes higher lows. Such divergence indicates a weakening in the momentum to the downside, which is usually the precursor to a reversal or a bounce.

Support Indicators Signal Strength Behind

On the weekly graph, Bitcoin is still above an enduring ascending trendline that has experienced consistent buying pressure since late 2022. Every price drop to this trendline has witnessed an upside reaction, maintaining the general bullish setup in place.

Stochastic RSI on the weekly chart is in the zone of overselling. The %D and %K lines are both beneath 20 and are set to cross above it soon. This is usually considered a buying signal. The Relative Strength Index (RSI) is steady at 45.89 and indicates neutral momentum with a tendency to recover.

Source : TradingView

The A/D line is rising, which points to ongoing buying pressure even on the recent corrections. The rising A/D line is evidence to support the argument that larger participants are still on the buy side on declines.

Rebound Level Targets and Market Focus

Bitcoin is trading at $82,542.35 and is up 2.02% in the past 24 hours. If the price breaks above the recent swing high, an upside move to the upper $80,000s becomes technically achievable. Sustained momentum can put Bitcoin in the position to revisit levels above $90,000 based on market affirmation.

Current technical configurations, ranging from the bullish divergence on MACD to oversold Stoch RSI conditions and price stability against trendline support, put BTC into a pivotal technical position.

The post Bitcoin MACD Divergence Could Trigger Bullish Reversal, Says Analyst appears on Crypto Front News. Visit our website to read more interesting articles about cryptocurrency, blockchain technology, and digital assets.