InvestMacro

At the end of Tuesday, the Dow Jones (US30) was down 0.95%. The S&P 500 Index (US500) decreased by 0.77%. The Nasdaq Technology Index (US100) closed lower by 0.88%. The US stocks closed lower on Tuesday as investor sentiment deteriorated amid mixed trade signals. President Trump’s wavering stance on trade — he said “we don’t have to sign deals” — contradicts recent optimism from Treasury officials and dampens hopes for tariff relief. Diplomatic tensions also rose after a sharp exchange with Canadian Prime Minister Mark Carney, who said “Canada is not for sale,” prompting Trump to respond, “Never say never.”

The US trade deficit widened to $140.5 billion in March 2025, hitting a new record high, compared with expectations of a $137 billion deficit. Imports jumped 4.4% to a record $419 billion in anticipation of new tariff announcements in April.

Technology stocks weakened, with Meta down 1.8% and Tesla down 1.7% on disappointing European sales. Palantir Technologies fell by 12% after results fell short of investor expectations, while Ford rose 2.4%, even after warning that tariffs could cut the company’s 2025 earnings by about $2.5 billion.

The US Federal Reserve will hold a monetary policy meeting today. The US Federal Reserve is expected to leave the federal funds rate unchanged at 4.25–4.50% for the third consecutive meeting in May 2025, as policymakers take into account slowing inflation amid a still-resilient labor market and increased uncertainty over trade policy.

Canada’s trade deficit in March 2025 was CAD 0.51 billion, down from the CAD 1.41 billion deficit recorded in February. The improvement came amid a sharper decline in imports compared to exports, driven by retaliatory tariffs by Ottawa in response to new US duties, as well as a voluntary boycott of US goods by Canadian retailers and households.

Equity markets in Europe traded flat on Tuesday. Germany’s DAX (DE40) decreased by 0.41%, France’s CAC 40 (FR40) closed down 0.40%, Spain’s IBEX35 (ES35) added 0.09%, and the UK’s FTSE 100 (UK100) was up 0.01%. European stocks closed modestly lower on Tuesday, capping off the rally of the past four weeks, as markets digested earnings reports, political setbacks, and continued to assess how economic uncertainty is affecting corporate orders. German conservative leader Friedrich Merz was elected chancellor in the second round of voting in Germany’s Bundestag, but the first vote unexpectedly ended without his election. On the corporate front, technology, retail, and pharmaceutical stocks were among the top losers.

WTI crude oil prices rose to $60 a barrel on Wednesday, extending their gains of more than 3% from the previous session, helped by signs of lower production in the US and rising demand in Europe and China. Adding to the upbeat sentiment were reports that US and Chinese officials will meet this week, boosting hopes of easing tensions between the two biggest oil consumers. In addition, API data showed a larger-than-expected decline in US crude inventories, with a 4.5 million barrel drop last week, exceeding the expected 2.5 million barrel decline.

The US natural gas futures rose to $3.6/MMBtu on Tuesday after declining 2.2% in the previous session, helped by lower production and record LNG exports. Production fell about 4.8 Bcf/d to a seven-week low of 102.6 Bcf/d on Tuesday. In addition, the US remains the world’s top LNG exporter, supported by robust international demand despite the recent slowdown in the domestic market.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) was up 1.04%, China’s FTSE China A50 (CHA50) added 0.51%, and Hong Kong’s Hang Seng (HK50) was up 0.70%, while Australia’s ASX 200 (AU200) was negative 0.08%.

People’s Bank of China (PBOC) Governor Pan Gongsheng announced a 50 basis point cut in the reserve requirement ratio (RRR) on Wednesday, which could lead to an injection of around RMB1 trillion in liquidity. This is the first RRR cut in 2025 as Beijing seeks to support economic growth amid escalating trade tensions with the US. Meanwhile, the Central Bank decided to cut the rate on seven-day reverse repurchase agreements by 10 basis points to 1.40%, effective Thursday, May 8. This is the first key rate cut since September 2024 and could lead to a broader cut in rates on market and liquidity instruments.

On Monday, the Dow Jones Industrial Average (US30) was down 0.24%. The S&P 500 Index (US500) decreased by 0.64%. The Nasdaq Technology Index (US100) closed lower by 0.67%. Markets reacted to President Trump’s threat to impose new tariffs, including a 100% tax on foreign movies, but sentiment improved following stronger-than-expected ISM services sector data. Still, uncertainty remains after Trump said he has no plans to speak with Chinese President Xi Jinping, causing investors to stay cautious. The energy sector led the decline, followed by the consumer discretionary and technology sectors.

The S&P Global Canada Services PMI for April 2025 rose slightly to 41.5 from 41.2 in the previous month, reflecting the fifth consecutive period of contraction in Canadian services activity at a historically high rate. While recovering slightly from March’s decline, business confidence remained historically weak amid continued uncertainty.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 1.12%, France’s CAC 40 (FR40) closed down 0.55%, Spain’s IBEX35 (ES35) added 0.53%, and the UK’s FTSE 100 (UK100) was not trading yesterday. The Fed is expected to leave interest rates unchanged following the release of a good employment report for April. Several major companies, including Continental, Hugo Boss, BMW, Fresenius, Infineon, Puma, Heidelberg Materials, Commerzbank, Zalando, and Siemens Energy are also due to report quarterly results this week. Volkswagen, meanwhile, reaffirmed its full-year outlook, excluding the potential impact of US tariffs, after reporting a 12.4% rise in first-quarter revenue, helped by higher sales of electric vehicles.

Swiss consumer prices were unchanged year-on-year in April 2025 after rising to 0.3% y/y in March and defeating expectations for a 0.2% increase. This is the lowest rate since deflation was recorded in March 2021. Meanwhile, core inflation, which excludes volatile items such as food and energy, fell to 0.6% from 0.9% in March.

WTI crude futures rose more than 1% to $58 a barrel on Tuesday, breaking a two-day decline amid renewed tensions in the Middle East. On Monday, Israel launched airstrikes on Yemen’s Hodeidah port and cement factory in response to an attack by Iranian-backed Houthis with ballistic missiles that hit Israel’s main airport a day earlier.

Silver (XAG/USD) prices rose more than 1% to $32.40 per ounce on Monday, recovering from last week’s losses amid a weaker US dollar, amid lingering concerns over trade relations between the US and China. President Donald Trump has said he has no plans to speak with his Chinese counterpart this week, but has signaled a willingness to cut tariffs on Chinese imports to boost trade. Last week, China said it might consider launching trade talks with the US, but emphasized that Washington must first lift all unilateral tariffs to demonstrate sincerity of intent.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was down 0.21%, China’s FTSE China A50 (CHA50) and Hong Kong’s Hang Seng (HK50) were not trading, while Australia’s ASX 200 (AU200) was negative 0.97%.

The Caixin China Services PMI fell to 50.7 in April 2025, down from March’s three-month high of 51.9 and below market expectations of 51.7, marking the lowest growth in the services sector since September last year. Business sentiment fell to the second-lowest level since data collection began in November 2005 due to concerns about the negative impact of trade policy changes.

Indonesia’s economy contracted by 0.98% QoQ in the first quarter of 2025, the first quarterly GDP contraction in a year and short of the market consensus expecting a 0.89% contraction. The decline followed a 0.53% rise in Q4, helped by a sharp contraction in government spending.

The US stocks rose on Friday thanks to a strong jobs report and signs of easing trade tensions between the US and China, which boosted investor confidence. The Dow Jones (US30) Index was up 1.39% (up +2.85% on the week). The S&P 500 Index (US500) was up 1.47% (for the week +2.85%). The Nasdaq Technology Index (US100) closed higher by 1.60% (for the week +3.45%). Nonfarm Payrolls for April rose by 177,000, exceeding expectations and bolstering optimism about the labor market despite lingering uncertainty over tariffs. Further supporting sentiment was Beijing’s openness to a resumption of trade talks, subject to tariff reductions from the US. However, earnings results remained mixed, with Apple shares falling 3.7% after warning of a $900 million tariff hit, and Amazon down 0.1% after a cautious outlook. Exxon Mobil shares were up 0.4% and Chevron was up 1.7% after the results were released.

Canadian GDP rose slightly in March despite falling prices of key Canadian commodities and pessimism over the country’s trade war with the US, reinforcing expectations that GDP may be somewhat resilient to a weakening US economy. On the political front, the Liberal Party of Canada won its fourth consecutive election by a relatively small margin, putting little pressure on the Lonnie after expectations of a majority victory, but still making former Bank of Canada and Bank of England governor Mark Carney prime minister of a minority government. So far, the incumbent PM has refrained from prioritizing a trade deal with the US, emphasizing Canada’s influence and preferring to make deals with other countries.

Equity markets in Europe were mostly up on Friday. Germany’s DAX (DE40) gained 2.62% (for the week +3.94%), France’s CAC 40 (FR40) closed 2.33% higher (for the week +2.71%), Spain’s IBEX35 (ES35) gained 1.20% (for the week +1.22%), and the UK’s FTSE 100 (UK100) closed 1.17% higher (for the week +2.15%). In Europe, encouraging economic data emerged with inflation unchanged at 2.2% in April, although core inflation rose slightly to 2.7% from 2.5%. Meanwhile, final PMI data for April showed tentative signs of a recovery in manufacturing activity. Shell shares rose by 1.9% after beating first-quarter earnings expectations and launching a $3.5 billion share buyback. Standard Chartered also beat projections thanks to profit gains in wealth management and global banking services.

WTI crude futures fell more than 3% to around $56 a barrel on Monday as OPEC+ agreed to increase production, adding to fears of a global supply glut. OPEC+ will boost oil production for the second straight month, increasing output by 411,000 bpd in June. That could put as much as 2.2 million bpd back on the market by November as group leader Saudi Arabia seeks to punish some members of the organization that have exceeded their quotas.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) was up 4.08%, China’s FTSE China A50 (CHA50) decreased by 1.17%, Hong Kong’s Hang Seng (HK50) added 1.92%, and Australia’s ASX 200 (AU200) was positive 3.39% over the past week.

The Australian dollar climbed above $0.645 on Monday, hitting its highest level in nearly five months, after Prime Minister Anthony Albanese won a second three-year term in Saturday’s federal election. Albanese promised the government would act in a “disciplined and orderly” manner, focusing on addressing rising living costs and global trade tensions. He also reiterated commitments to expand renewable energy, cut taxes, ease the housing crisis, and invest in Australia’s strained health system. On monetary policy, the Reserve Bank of Australia is expected to cut its benchmark interest rate by 25 basis points to 3.85% in May.

The New Zealand dollar rose to around US$0.598 on Monday, extending gains from the previous session, helped by continued weakness in the US dollar as investors awaited clearer signals on trade relations between the US and China. On Sunday, President Trump reiterated his confidence that China wants a deal, although he did not provide any details. Meanwhile, Beijing signaled last week that it was open to talks but insisted that the US first remove all unilateral tariffs.

At the end of Wednesday, the Dow Jones Index (US30) rose by 0.35%. The S&P 500 Index (US500) was up 0.15%. The Nasdaq Technology Index (US100) added 0.13%. Investors brushed off recession fears despite data showing the economy contracted for the first quarterly contraction in three years. The US economy shrank by 0.3% in the first quarter, missing expectations as businesses rushed to import goods before Trump’s tariffs took effect. While consumer spending rose a stronger-than-expected 0.7% in March, low hiring and government spending cuts underscored growing economic pressures.

The Canadian dollar strengthened to 1.38 per dollar, its strongest level since October, after the Bank of Canada’s latest meeting minutes showed a marked pullback from its earlier dovish rhetoric. The minutes emphasized the need for caution, expressing concerns that further easing could jeopardize efforts to control inflation, thus lowering expectations of a rate cut soon. The longs were further boosted by preliminary data that Canada’s economy grew 0.2% in the first quarter, avoiding a technical recession and in sharp contrast to the US.

The Mexican peso is holding near 19.60 per US dollar, remaining at its highest level in six months, as investors digest the latest data on economic growth. The Mexican economy avoided a technical recession thanks to preliminary first-quarter GDP growth of 0.2%, beating expectations of stagnation and recovering from a 0.6% contraction in the previous quarter.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) rose by 0.35%, France’s CAC 40 (FR40) closed 0.50% higher, Spain’s IBEX35 (ES35) Index fell by 0.59%, and the UK’s FTSE 100 (UK100) closed positive 0.37%. While the US economy unexpectedly contracted in the first quarter, Eurozone GDP growth came in above analysts’ expectations. The German economy emerged from a brief downturn, posting a 0.2% growth in Q1 after contracting 0.2% in the previous quarter, which matched expectations. Meanwhile, German inflation fell for the second consecutive month to 2.1% in April, the lowest since October 2024, but still slightly above the market prognoses of 2.0%.

WTI crude oil prices fell by 3.7% to $58.20 a barrel on Wednesday, posting their steepest monthly drop since the end of 2021, down 18% amid growing concerns about a global supply glut and weakening demand. Prices were pressured by Saudi Arabia’s signal to increase production and regain market share, while OPEC+ is reportedly considering additional production increases at its May 5 meeting, adding to fears of a renewed price war.

Asian markets were mostly up on Wednesday. Japan’s Nikkei 225 (JP225) rose by 0.57%, China’s FTSE China A50 (CHA50) was down 0.61%, Hong Kong’s Hang Seng (HK50) added 0.51%, and Australia’s ASX 200 (AU200) was positive 0.69%.

In New Zealand, markets are firmly expecting a 25bps rate cut at the Central Bank’s meeting later this month, with rates set to be at 2.75% by October. On the economic front, recent data showed that business confidence in New Zealand deteriorated in April due to concerns over US tariffs. For April, the kiwi dollar rose strongly by 4.6%.

The Australian dollar climbed above US$0.64 on Thursday, building on gains made in the previous session following the release of strong trade balance data. Australia reported a trade surplus of A$6.9 billion in March, up significantly from February’s A$2.85 billion. The currency was further supported by April data, which showed that manufacturing activity continued to grow, and new orders increased at the fastest pace in almost two and a half years, which is a positive sign for domestic demand.

The Dow Jones Index (US30) gained 0.75% on Tuesday. The S&P 500 Index (US500) increased by 0.58%. The Nasdaq Technology Index (US100) was up 0.61%. Stocks headed higher on Tuesday after weaker-than-expected reports on US job openings and consumer confidence crashed 10-year T-note yields to 3-week lows, raising the likelihood that the Federal Reserve will cut interest rates. Markets have moved to estimate a 100 bps Fed rate cut within a year, compared with the Central Bank’s 50 bps announcement last month.

A preliminary estimate saw the US trade deficit widen sharply to $162 billion in March 2025, a record high, exceeding the market consensus expectations of $146 billion, as tariffs threatened by the US government force domestic companies to increase imports.

The Canadian dollar hit 1.38 per dollar, trading near its highest level in six months, as G10 currencies continued to receive support from a flight from dollar assets and markets assessed the outlook for domestic economic policy under the newly elected Liberal Party government. Canada’s Liberal Party won its fourth consecutive election by a relatively small margin, which put little pressure on the CAD after expectations of a majority victory. Still, it made former Bank of England and BoE Governor Mark Carney the Prime Minister of a minority government. So far, the incumbent PM has refrained from prioritizing a trade deal with the US, emphasizing Canada’s influence and preferring to make deals with other countries. At the same time, the Bank of Canada noted that an uncertain US trade policy risks a recession in Canada if the US continues to impose an aggressive tariff package.

Equity markets in Europe traded without a single dynamic yesterday. German DAX (DE40) gained 0.69%, French CAC 40 (FR40) closed down 0.24%, Spanish IBEX35 (ES35) fell by 0.66%, and British FTSE 100 (UK100) closed higher 0.55%. Frankfurt’s DAX Index rose about 0.7% on Tuesday to 22,426, its highest level since early April and marking its sixth consecutive session of gains. The rise came as investors weighed a wave of corporate earnings and former President Trump’s proposal to cut tariffs on auto parts for US-made vehicles. Germany’s largest lender, Deutsche Bank, was also in the spotlight, rising 5% after posting better-than-expected first-quarter earnings.

WTI crude oil prices fell more than 2% to below $61 a barrel, a two-week low, and extended a 1.5% decline in the previous session as global trade tensions and weak US data worsened the demand outlook. Oil is on track for its sharpest monthly decline since 2021, falling 15% in April, as fears grow that President Trump’s escalating tariffs could push the global economy into recession. The US consumer confidence fell, adding to signs of economic strain.

Asian markets were mostly rising on Tuesday. Japan’s Nikkei 225 (JP225) was not trading yesterday, China’s FTSE China A50 (CHA50) was down 0.50%, Hong Kong’s Hang Seng (HK50) was up 0.16%, and Australia’s ASX 200 (AU200) was positive 0.92%. Hong Kong stocks fell 72 points in early trading on Wednesday, reversing the previous session’s modest gains, as investors reacted to China’s April PMI data. Official data showed factory activity contracted by the most in 16 months, amid growing concerns about the impact of rising US tariffs. In contrast, the private survey showed unexpected growth in manufacturing, albeit at the slowest pace since January. Meanwhile, growth in the services sector also weakened, with the reading falling short of expectations.

Headline inflation in Australia rose by 2.4% in the first quarter, in line with the previous quarter’s pace and slightly above market expectations of 2.3%. However, core inflation fell to 2.9% from 3.3%, reinforcing expectations of a rate cut soon. The Reserve Bank of Australia is widely expected to cut its monetary rate by 25 basis points to 3.85% in May, with markets’ pricing in further easing to 2.85% by year-end. The outlook is shaped by rising domestic economic uncertainty and heightened external risks, particularly the potential global impact of new US tariffs.

At the end of Monday, the Dow Jones Index (US30) rose by 0.28%. The S&P 500 Index (US500) gained 0.06%. The Nasdaq Technology Index (US100) was down 0.09%. Wall Street is gearing up for a busy week of important earnings releases and crucial economic data. Key GDP, inflation, and employment reports coming out this week are expected to provide new insights into the economic outlook. Investors are focused on upcoming quarterly results from Amazon, Apple, Meta Platforms and Microsoft, as well as signs of how President Trump’s sweeping tariffs affect the companies’ prospects. While earnings largely beat expectations, uncertainty surrounding the tariffs caused many companies to lower their second-quarter projections.

The Canadian dollar weakened to around $1.39, reversing gains from the previous session as investors awaited the final election results. Early expectations suggested that Canada’s ruling Liberal Party may retain power, although the final results remain uncertain, as the Liberals are still short of the 172 seats needed for a majority in the 343-seat House of Commons. Mark Carney’s bid for a stronger mandate to manage US tariffs faced opposition from stronger-than-expected Conservatives, raising the possibility of a minority government that may have to negotiate policy support.

The Mexican peso held below 19.6 per US dollar, near a six-month high of 19.51 on April 25, helped by the Bank of Mexico’s hawkish outlook. The country’s unemployment rate hit a record low of 2.2% in March, indicating a resilient labor market in the face of restrictive policies, and core inflation accelerated to 3.9% in mid-April — the highest level since September 2024 — confirming the Bank of Mexico’s decision to keep the benchmark rate at 11%. This large differential in real interest rates continues to attract carry-trade inflows.

Equity markets in Europe were mostly up on Monday. The German DAX (DE40) rose by 0.13%, the French CAC 40 (FR40) closed 0.50% higher, the Spanish IBEX35 (ES35) gained 0.75%, and the British FTSE 100 (UK100) closed positive 0.03%. Hopes for improved trade relations between the US and China also helped boost market sentiment. In Europe, traders were expecting corporate earnings: Porsche, Schneider Electric, and Deutsche Boerse are due to report.

WTI crude prices fell more than 2% to below $62 a barrel on Monday as concerns over rising tariffs threatened to reduce fuel consumption while supply rose. OPEC+ surprised markets by agreeing to raise output by about 411,000 barrels a day in May, reversing much of last year’s cuts, and US oil production is holding steady at a record 13.5 million barrels a day amid a rising rig count. Barrel discounts from Iran and Russia further boosted stocks in Asia, adding to the glut.

Asian markets were mostly rising on Monday. Japan’s Nikkei 225 (JP225) was up 0.38% yesterday, China’s FTSE China A50 (CHA50) was up 0.05%, Hong Kong’s Hang Seng (HK50) was down 0.04%, and Australia’s ASX 200 (AU200) was positive 0.36%. China reiterated that it is not involved in trade talks with the US, clarifying that Chinese President Xi Jinping has not spoken to President Donald Trump despite Trump’s statement in a recent Time interview. Domestically, expectations are rising that the Reserve Bank of Australia will make another 25 basis point rate cut in May amid growing economic uncertainty and worsening global trade concerns. Investors are now awaiting Australian inflation data due for release on Wednesday to gain further insight into the RBA’s future actions.

The Dow Jones (US30) was up 1.23% on Thursday. The S&P 500 Index (US500) added 2.03%. The Nasdaq Technology Index (US100) was up 2.79%. The US stocks rose on Thursday, posting gains for the third straight session, as technology shares led gains and investors weighed mixed signals from the Trump administration on tariffs and trade talks with China. Hopes for a Federal Reserve rate cut also strengthened after the Cleveland Fed president said there could be action in June if supported by data.

The Mexican peso strengthened to 19.6 per US dollar, hitting its highest level in six months, helped by the general weakening of the US dollar and expectations of a continued hawkish stance by the Bank of Mexico. Mexico’s wide real rate differential continues to attract robust carry-trade inflows, while a “very productive” conversation between Presidents Trump and Sheinbaum eased concerns over potential US tariffs. In addition, stable oil export revenues support Mexico’s external accounts.

Equity markets in Europe were mostly up on Thursday. Germany’s DAX (DE40) rose by 0.47%, France’s CAC 40 (FR40) closed 0.27% higher, Spain’s IBEX 35 (ES35) fell by 0.22%, and the UK’s FTSE 100 (UK100) closed 0.05% yesterday. European stock indices reversed early losses and closed higher on Thursday, recording three consecutive days of gains, helped by a positive session on Wall Street. Despite this, the German government lowered its economic growth forecast 2025, predicting stagnation instead of 0.3% growth, citing ongoing global uncertainty caused by trade tensions.

The US natural gas prices (XNG/USD) fell to $2.9/MMBtu, the lowest in five months, amid lower gas prices in major European and Asian centers amid oversupply and uncertain demand due to macroeconomic factors. The new data showed that gas production in the lower 48 US states rose to 106.6 billion cubic feet per day in April, a record high. This coincided with warmer-than-normal temperatures, which are expected to persist through early May, reducing demand for gas-intensive heating.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) gained 0.49% yesterday, China’s FTSE China A50 (CHA50) climbed 0.35%, Hong Kong’s Hang Seng (HK50) declined 0.74%, and Australia’s ASX 200 (AU200) closed 0.60%. China has begun issuing special bonds to guard against rising trade tensions. Beijing also cut its list of sectors negative for foreign investment from 117 to 106, signaling a desire to further open up the market.

The New Zealand dollar slid to around USD0.598 on Friday but remained on track for a third straight weekly gain amid optimism over trade talks between the US and China. Earlier this week, Trump hinted at softening his aggressive trade stance toward China, New Zealand’s largest trading partner, by proposing significantly reducing tariffs on Chinese imports. Domestically, expectations of further monetary easing by the Reserve Bank of New Zealand continue to weigh on the currency. Markets remain focused on a 25bp rate cut at the RBNZ’s May meeting, with rates likely to reach the 2.75% level by year-end.

On Friday, the Australian dollar dipped below US$0.64, trimming gains from the previous session as the US dollar strengthened on signs of easing global trade tensions. On the domestic front, data released earlier this week showed that Australia’s private sector activity rose for the seventh consecutive month in April, thanks to strong growth in both manufacturing and services. Despite the positive economic data, the Reserve Bank of Australia is expected to cut the policy rate by 25 basis points again in May as the country prepares for the potential economic impact of the recently imposed US tariffs.