Geopolitical Shocks That Could Reshape Financial Markets in 2025 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
Stock Futures Dip as Investors Await Key Payrolls Data 
Bank of Korea Holds Interest Rates Steady as Weak Won Limits Policy Flexibility 
Brazil Central Bank Plans $2 Billion Dollar Auctions to Support FX Liquidity 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
Bank of America Posts Strong Q4 2024 Results, Shares Rise 
Bitcoin Defies Gravity Above $93K Despite Missing Retail FOMO – ETF Inflows Return & Whales Accumulate: Buy the Dip to $100K 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Whether Fed goes into active monetary policy mode again is dependent on inflation pressures. The USD has lost ground on this morning’s US CPI release.
The annual inflation rate in the United States edged up to 2.5 pct in April of 2018 from 2.4 pct in March, matching market expectations. It is the highest rate since February of 2017. Core inflation was flat at 2.1 pct. On a monthly basis, consumer prices went up 0.2 pct, higher than 0.1 pct in March but below forecasts of 0.3 pct
Indeed, the real Fed interest rate (Fed funds rate minus inflation) has not risen at all. It is still at the level seen in early 2016 – when inflation was much lower.
Elsewhere, China’s CPI inflation surprised the market to the downside, at 1.8% y/y in April, down from 2.1% previously. Inflation momentum has clearly illustrated a sluggish trend in recent months, which in turn indicates a cyclical economic slowdown.
In the meantime, PPI inflation also registered a negative monthly change for the third consecutive month, in line with CPI inflation dynamics.
The soft inflation reading suggests that there is room for monetary policy easing over the next few quarters, which will result in a narrowing rate spread between CNY and USD.
In other words, the carry gain of CNY long positions will diminish.
Furthermore, capital outflow pressure could re-emerge as Chinese corporates may have to repay their USD loans as the funding cost of the greenback has been rising.
While U.S. rates round-tripped this week, with 10s, for example, breaking through 3% only to close Friday nearly unchanged since last week.
Currency Strength Index: FxWirePro's hourly USD spot index is turned back to -64 levels again which is bearish indication after US prints inflation rate that is highest in 14 months while articulating at (12:50 GMT). For more details on the index, please refer below weblink:
http://www.fxwirepro.com/currencyindex
FxWirePro launches Absolute Return Managed Program. For more details, visit:
