Market Roundup
• Trump's tariffs on China trigger fears of recession
• U.S. Treasuries and dollar hit by selloff, yields rise sharply
• Global markets face crisis-era volatility, stocks and commodities plummet
• UK 30-Year Treasury Gilt Auction 4.142% , 5.104% previous
Looking Ahead Economic Data(GMT)
• 14:00 US Wholesale Inventories (MoM) (Feb) 0.3% forecast, 0.8% previous
• 14:00 US Wholesale Trade Sales (MoM) (Feb) -1.3% previous
•14:30 US Crude Oil Inventories 2.200M forecast, 165M previous
• 14:30 US EIA Refinery Crude Runs (WoW) -0.192M previous
• 14:30 US Crude Oil Imports 0.999M previous
• 14:30 US Cushing Crude Oil Inventories 2.373M previous
Looking Ahead Events And other Releases(GMT)
•16:30 US FOMC Members Barkin Speaks
Currency Forecast
EUR/USD: The euro strengthened on Wednesday, supported by reports that Germany's conservatives had reached a deal with the center-left Social Democrats to form a government, easing political concerns in the EU's largest economy. Coalition partners are under pressure to speed up talks due to global instability caused by the escalating trade war sparked by U.S. President Donald Trump's broad import tariffs, which could drive inflation and raise fears of a global recession. On Wednesday, EU countries are expected to approve the bloc's first countermeasures against U.S. tariffs. The single currency firmed 0.7% to $1.1033 , creeping back towards last week's peak at $1.1147. Immediate resistance can be seen at 1.1078(38.2%fib), an upside break can trigger rise towards 1.1160(23.6%fib).On the downside, immediate support is seen at 1.1016(50%fib), a break below could take the pair towards 1.0951(61.8%fib).
GBP/USD: The British pound strengthened on Wednesday as dollar dipped as investors worried about the economic impact of U.S. tariffs. U.S. President Donald Trump's "reciprocal" tariffs on dozens of countries took effect on Wednesday, including massive 104% duties on Chinese goods. Beijing retaliated with an 84% tariff on U.S. goods from Thursday, deepening a global trade war. Markets have been on the backfoot since Trump unveiled his latest assault on global trade last week, which analysts say is more restrictive than what was anticipated and is likely to push the global economy into a recession . Immediate resistance can be seen at 1.2876(38.2%fib), an upside break can trigger rise towards 1.3026(April 2nd high).On the downside, immediate support is seen at 1.2704(50%fib), a break below could take the pair towards 1.2684(Lower BB).
AUD/USD: The Australian dollar strengthened on Wednesday, recovering from recent lows against the U.S. dollar as the greenback weakened amid growing concerns over a potential U.S. recession. President Donald Trump's aggressive tariffs have shaken global financial markets, with his recent hike in levies on Chinese imports escalating the trade war and increasing fears of a global recession. The Australian dollar, being more sensitive to global trade dynamics, is more affected by these developments compared to other major currencies.At GMT 12:46, The Australian dollar was 1.02% stronger at $0.6021 against US dollar, but remained near the five-year low it hit on Monday. Immediate resistance can be seen at 0.6055(38.2%fib), an upside break can trigger rise towards 0.6147 (50%fib).On the downside, immediate support is seen at 0.5943(23.6%fib), a break below could take the pair towards 0.5900(Psychological level)
USD/JPY: The dollar declined against Japanese yen on Wednesday as investors fretted about the economic impact of U.S. tariffs, which spooked markets. Trump's decision to impose broad tariffs globally, including on Japan, has complicated the BOJ's efforts to raise interest rates from their historically low levels.Bank of Japan Governor Kazuo Ueda stated on Wednesday that the central bank will closely assess the impact of U.S. tariffs on the economy when making monetary policy decisions.The BOJ next meets for a policy meeting on April 30-May 1, when the board is seen keeping interest rates steady at 0.5% and issuing fresh quarterly economic forecasts.As global markets navigate the complexities of international trade, all eyes are on the upcoming meeting between a Japanese trade delegation and U.S. officials. The greenback dropped 0.8% against safe haven yen 145.09. Immediate resistance can be seen at 145.94(38.2%fib) an upside break can trigger rise towards 147.00(Psychological level). On the downside, immediate support is seen at 144.06(23.6%fib) a break below could take the pair towards 143.56(Lower BB).
Equities Recap
European shares extended their losses on Wednesday as China retaliated by more than doubling its tariffs on U.S. goods, shortly after Washington imposed a massive 104% levy on Beijing, fueling fears of significant economic damage from the escalating trade war.
At GMT (12:16) UK's benchmark FTSE 100 was last trading down at 3.63 percent, Germany's Dax was down by 4.21 percent, France’s CAC was down by 4.31 percent.
Commodities Recap
Gold prices surged more than 2% on Wednesday as traders flocked to the safe-haven asset amid growing concerns over a global trade war and recession. A weaker dollar and the increasing likelihood of U.S. rate cuts also provided support.
Spot gold climbed 2.6% at $3,061.92 an ounce, as of 1129 GMT. U.S. gold futures gained 3.1% to $3,082.10.
Oil prices sank to new four-year lows on Wednesday after China introduced additional tariffs on U.S. goods in retaliation to President Donald Trump's tariff policy.
Brent futures dropped by $4.02, or 6.40%, to $58.80 a barrel by 1153 GMT. U.S. West Texas Intermediate crude futures were down $4.03, or 6.76%, at $55.55.
