Ian Reynolds
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Overnight
Market focus has changed with the massive amount of economic data. Recession is front and centre as the first cut of US Q1 data hit the screens.
US GDP QoQ Q1 2025
Headline of negative growth reflected less government spending and less imports due to tariffs. It's still negative so don't be fooled by politicians tipping out key components. ADP miss tells us which way Nonfarm Payroll Friday is likely to go.
If Q1 is negative, and tariffs have only just started, then Q2, and a recession, is almost guaranteed.
Equity prices tanked on the news and bond yields rose as quarterly PCE came in a lot higher than expected.
US CORE PCE March 2025
Later monthly Core PCE numbers helped markets rally back as the monthly reading was benign
CANADA GDP March 2025
Equally in Canada recession is here, no matter that March reading was the smallest possible positive number.
EU GDP Q1 2025
In the EU things are better because there have already been many rate cuts to help buoy the economy. Supportive of EUR / USD.
CHINA MANUFACTURING PMI April 2025
Earlier in the day Aussie CPI came in higher than expected, although the trend is still lower.
In China the PMIs came in lower than expected reinforcing the relentless grind lower in the economy.
ALSO it's earnings seasons and a lot of companies are refusing to give guidance for tariff reasons. This is a contributing factor to the downside pressure on equities, although retail buying the dip is another opposing factor.
After all this US stocks did well to end on a positive note despite being significantly lower at one stage.
US EQUITIES
Bank of Japan monetary policy meeting today.
Breaking
Stephen Miran, Trump's top economic adviser, recently met with top bond investors, and they found him incoherent, unable to answer basic economic questions completely
Top Trump adviser struggles to soothe investors in talks after market tumult [FT]
Putin Is Said to Demand Ukraine Land Despite US Pressure [Bloomberg]
Chinese sovereign fund CIC to sell $1 billion of US private equity investments, sources say [Reuters]
Commodities
Oil continues lower as global recession talk intensifies. Gold and Silver are paused.
SPOT BRENT Daily
Bitcoin
BTC is blissfully in it's own bubble, but if we close as the current doji, we'll be seeing some action soon.
BITCOIN / USD Daily
Equities
Definitely resilience in the face of recession, from US stock markets.
NASDAQ Daily
Bonds
Gilt yields having pushed to go higher consistently for a year, may well have given up and are looking to go lower, with the recession narrative.
UK 10 Year Government Bond Yield Daily
Foreign Exchange
After the 10% fall in the USD this year, it hasn't really had much of a bounce. That wedge is going to break soon though.
DXY Daily
