The major assets traded mixed following new global trade headlines, ECB’s rate cut, mid-tier data releases, and potential profit-taking ahead of the Easter holidays.
Here are the updates from the latest trading sessions!
Headlines:
- New Zealand CPI for Q1 2025: 0.9% q/q (0.8% forecast, 0.5% previous)
- U.S. President Trump celebrated “big progress” on trade talks with Japan
- BOJ member Junko Nakagawa still favors raising rates if inflation continues to rise towards 2% as expected
- RBNZ sectoral factor inflation model – a preferred inflation measure – eased from 3.0% to 2.9% q/q in Q1 2025
- RBNZ Assistant Gov. Simone Robbers resigned, set to leave by end of May
- FOMC member Jeff Schmid favors patience to see how tariffs play out
- Japan trade balance went from 0.19T JPY surplus to 0.23T JPY deficit (0.25T JPY deficit expected) in March
- Australia employment change for March: 32.2K (39.8K forecast, -57.5K previous); Unemployemnt rate at 4.1% (4.2% forecast, 4.0% previous)
- Switzerland trade surplus for March: 6.35B CHF (5.22B CHF forecast, 4.74B CHF previous)
- Germany producer prices for March: -0.7% m/m (-0.1% forecast, -0.2% previous)
- ECB cut it rates by 25bps as expected, said “outlook for growth has deteriorated owing to rising trade tensions”
- U.S. initial jobless claims for the week ending April 12: 215K (225K forecast, 224K previous)
- U.S. Philadelphia Fed manufacturing PMI for April: -26.4 (2.2 forecast, 12.5 previous)
- U.S. building permits for March: 1.48M (1.45M forecast, 1.46 previous); Housing starts at 1.32M (1.42M forecast, 1.49M previous)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
The major assets saw mixed price reaction with few market-moving catalysts and potential positioning ahead of a long weekend.
The ECB cut rates by 25 basis points to 2.25%, warning of deteriorating growth due to trade tensions. Simultaneously, President Trump escalated his criticism of Fed Chair Powell, stating “Powell’s termination cannot come fast enough,” with reports he’s privately discussed replacing him with former Fed Governor Kevin Warsh.
The S&P 500 closed slightly higher (+0.1%), while the Nasdaq edged down (-0.1%). The Dow Jones tumbled 1.3%, dragged down by UnitedHealth’s 22% plunge following a slashed profit forecast. European markets closed mostly lower.
Gold pulled back 0.5% after reaching record highs the previous day, while WTI crude jumped 3.5% to $64.68 amid concerns about Iranian oil exports. Treasury Secretary Scott Bessent announced new sanctions on Chinese importers of Iranian crude, vowing to “apply maximum pressure on Iran and disrupt the regime’s oil supply chain,” pledging to reduce Iran’s energy exports “to zero.” Bitcoin showed resilience amid market turbulence, trading around $84,875 with modest 0.2% gains.
Trump’s positive comments about trade progress with Japan, Mexico, and potentially China provided some optimism, though investors remain cautious ahead of next week’s earnings reports from major companies like Tesla, Boeing, and Alphabet.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Major Currencies Chart by TradingView
The U.S. dollar traded mixed on Thursday, as traders priced in global trade developments, ECB’s rate cut, mid-tier data releases, and potential profit-taking ahead of a long weekend for many traders.
In the Asian session, USD initially strengthened but retreated following Australia’s underwhelming jobs report, with employment growing by only 32,200 versus 39,800 expected and unemployment rising to 4.1%. Dollar momentum then rebuilt during early European trading, with USD/JPY and USD/CHF showing particular strength.
The ECB’s 25bps rate cut to 2.25% marked a turning point. While EUR initially weakened, Lagarde’s dovish press conference highlighting “deteriorated growth outlook” caused a dramatic shift, with NZD seeing the sharpest reaction as USD/NZD plunged nearly 0.6%.
The U.S. session brought conflicting signals: jobless claims unexpectedly dropped to 215,000, but the Philadelphia Fed index collapsed to -26.4 (versus +2.0 forecast). This manufacturing weakness, coupled with Trump’s escalating criticism of Fed Chair Powell, undermined dollar strength. USD/CHF remained the day’s outperformer, while commodity currencies and sterling gradually recovered as trading slowed ahead of the Easter break.
Upcoming Potential Catalysts on the Economic Calendar:
- Australia Good Friday
- New Zealand Good Friday
- Canada Good Friday
- Swiss Good Friday
- Germany Good Friday
- U.K. Good Friday
- Italy trade balance at 8:00 am GMT
- FOMC member Daly to give a speech at 3:00 pm GMT
Traders are in for a light data calendar today with Australia, New Zealand, Canada, and most of the European markets closed for the Easter holidays.
Keep an eye out for any trade policy-related headlines, which could cause increased volatility among the major currencies.
As always, stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!
