Daily Market Roundup

North America News

NASDAQ Leads Rebound as U.S. Equities Recover; Earnings Season in Focus

After a brutal Monday selloff, U.S. equity markets have posted two strong sessions, with the NASDAQ leading gains on Wednesday. The index surged 407.63 points, or 2.50%, to close at 16,708.05, driven by renewed optimism around trade policy and confirmation that Fed Chair Powell will remain in his role.

Broad-Based Gains Across Indices

• Dow Jones rose 419.59 points (+1.07%) to close at 39,606.
• S&P 500 climbed 88.08 points (+1.67%) to 5,375.84.
• Russell 2000 also finished higher, though exact data wasn’t disclosed.

Both the S&P and NASDAQ ran into resistance near their 200-hour moving averages—a critical technical level to watch. A breakout above these levels could confirm further upside, but continued rejection may cap the rally.

Corporate Earnings Highlights

• Southwest Airlines (LUV): Q1 revenue hit $6.40B in line with estimates. Adjusted EPS was -$0.13 vs. -$0.18 expected.
• Discover Financial Services (DFS): Reported Q1 net income of $1.1B or $4.25/share.
• Chipotle (CMG): Missed Q1 revenue estimates with $2.88B vs. $2.95B forecast.
• IBM: Beat on Q1 EPS ($1.60 vs. $1.40 est.) and revenue ($14.54B vs. $14.40B est.). Booked $6B+ in Gen AI revenue.
• Las Vegas Sands (LVS): Revenue missed at $2.86B vs. $2.91B est. Operating profit also came in below expectations.

The combination of trade optimism, solid earnings, and macro stability has helped restore investor sentiment—at least for now.

U.S. Treasury Sells $70B in 5-Year Notes at 3.995% Yield

The U.S. Treasury successfully auctioned off $70 billion in 5-year notes on Wednesday, with a high yield of 3.995%—slightly below the 4.005% when-issued (WI) level. The auction drew a bid-to-cover ratio of 2.41, in line with the six-month average of 2.40.

Direct bidders took 24.8% of the supply, significantly above the 17.7% average. Indirect (foreign) demand came in at 64.04%, lower than the typical 70.2%. Dealers were left with just 11.12%, compared to the average of 12.1%. The tail came in at -1.0 basis point, making the auction moderately strong overall.

U.S. April Manufacturing PMI Beats Forecasts; Services Weaken

S&P Global’s preliminary data for April shows the U.S. manufacturing sector edged up, with the PMI rising to 50.7, above the expected 49.1 and last month’s 50.2. However, services activity slowed, with the flash services PMI slipping to 51.4, well below the 52.5 estimate and down from 54.4 in March.

The composite PMI also weakened, coming in at 51.2 compared to last month’s 53.5. While manufacturing is holding steady, the broader slowdown in services points to a moderation in economic momentum as Q2 progresses.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, highlights growing economic challenges in the latest April flash PMI report. Here are the key takeaways from his comments:

• Business activity growth slowed sharply in early Q2, with optimism about the outlook slumping.
• Output rose at the slowest pace since December 2023, suggesting the US economy is expanding at just a 1.0% annualized rate.
• Manufacturing stagnated due to offsetting effects of tariffs, economic uncertainty, supply chain issues, and declining exports.
• Services growth also slowed, particularly from weaker export demand like travel and tourism.
• Business confidence fell significantly across both manufacturing and services, driven by concerns over recent government policies.
• Tariffs are the main driver of rising prices, but labor costs are also pushing up company pricing.
• Selling prices rose at the fastest pace in over a year, with manufacturing prices increasing at the steepest rate in nearly 2.5 years.
• These price pressures may lead to higher consumer inflation, making it harder for the Fed to cut interest rates despite signs of economic slowdown.

U.S. Budget Deficit Expected to Shrink on Tariff Revenue, But Global Debt Set to Climb

The U.S. budget deficit is projected to drop to 6.5% of GDP in 2025 and 5.5% in 2026, down from 7.3% in 2024. The improvement is attributed primarily to increased tariff collections and ongoing economic growth. These figures are based on policies announced up to April 2 and assume that the 2017 individual tax cuts expire at the end of this year.

Globally, however, the picture is worsening. The IMF warns that new tariffs could push the global public debt-to-GDP ratio up by 2.8 percentage points in 2025, reaching 95.1%. If tariff impacts cut deeper into revenue and output than expected, global debt levels could surge past 117% of GDP by 2027. The IMF’s Fiscal Monitor sees global public debt hitting 99.6% of GDP by 2030, surpassing the pandemic-era peak. These projections assume 2.8% global growth in 2025.

U.S. New Home Sales Hit 22-Month High, Prices Fall

New home sales in the U.S. jumped to 724,000 units in March 2025, beating the 680,000 forecast and marking a 7.4% monthly increase. This follows a 3.1% gain in February and brings sales to their highest level since May 2023.

The median price of a new home dropped 7.5% month-over-month to $403,600, down from $436,400. Regionally, the South led with a 13.6% surge, while the Midwest posted a 3.0% increase. The West slipped 1.4%, and the Northeast saw a sharp 22.2% drop.

Housing supply fell to 8.3 months at the current sales pace, down from 8.9 months in February, indicating tighter market conditions despite softer pricing.

U.S. Mortgage Activity Slumps as Rates Tick Higher

U.S. mortgage applications plunged in the week ending April 18, 2025, as higher borrowing costs took a bite out of both purchase and refinancing demand. According to the Mortgage Bankers Association, overall applications fell 12.7%, following an 8.5% drop the previous week. The market composite index declined to 233.5 from 267.5.

The purchase index fell to 153.4 from 164.2, while the refinance index tumbled to 673.6 from 841.9. Meanwhile, the average 30-year fixed mortgage rate rose to 6.90%, up from 6.81%. The data suggest that buyers are retreating in response to rate volatility, with refinancing activity slowing as fewer homeowners stand to benefit from locking in new loans at higher costs.

Beige Book Shows Stagnant U.S. Economy, Heightened Uncertainty Over Trade

The latest Beige Book report from the Federal Reserve, released April 23, paints a mixed picture of the U.S. economy. Overall activity was “little changed,” but the tone has clearly worsened in several regions due to mounting concerns over tariffs and trade policy.

Labor Market and Business Sentiment Weakening

More districts are reporting job declines than in previous reports, with many firms adopting a “wait-and-see” stance or even preparing for layoffs. Employers cite tariff-related uncertainty as a key factor behind delayed hiring and investment plans.

Consumers Pull Back on Spending Outside Auto Sector

Non-auto consumer spending declined, while vehicle purchases increased as buyers looked to lock in prices ahead of expected tariff hikes. Businesses across sectors are pausing major decisions, citing lack of clarity on trade. Notably, New York’s service firms reported a steep drop in planned investment.

Tourism and Pricing Trends

Travel activity weakened, with several districts noting fewer international visitors—especially from Canada. Meanwhile, prices continued to rise at a similar pace to previous reports, driven in part by businesses front-loading purchases in anticipation of tariff-related cost increases.

Leavitt: There will be no unilateral reduction in tariffs against China

• Repeats what Bessent said earlier

So we have the Treasury Secretary and White House spokeswoman saying this but she is also saying that it’s up to Trump on what the China tariff rate will be.

Fed’s Goolsbee: Productivity Boom Driven by Tech Advancements

Chicago Federal Reserve President Austan Goolsbee said on Wednesday that recent increases in productivity growth are likely the result of a technology-driven boom. His comments suggest optimism that structural gains—not temporary trends—are underpinning the uptick in economic efficiency.

Bessent: U.S. Seeks Balanced Relations with China, IMF Must Refocus

U.S. Treasury Secretary Scott Bessent spoke at the IMF conference, stating the Trump administration wants to help the U.S. and China rebalance their economic relationship. He criticized China’s export-heavy model and opaque currency practices and called on the IMF to prioritize macroeconomic work over social agendas.

Bessent emphasized that institutions like the IMF and World Bank should return to their core missions. He also stated that countries involved in supporting Russia’s war effort will be barred from receiving Ukraine aid funds.

The U.S. is also pushing for the World Bank to stop classifying China as a developing country and to set clear graduation criteria for lending. He added that economic growth and stability—not loan volume—should be the benchmarks for IMF success.

White House Reportedly Considering Tariff Reductions on China to Ease Tensions

The White House is weighing options to ease the trade war with China by trimming tariffs. According to sources cited by The Wall Street Journal, the administration is considering reducing some tariffs to between 50% and 65%.

A 35% tariff would remain on nine strategic categories, while goods linked to national security could still face tariffs above 100%. These would be phased in over five years.

This policy shift reportedly comes after persuasion from Treasury Secretary Bessent and Commerce Secretary Lutnick, and may also explain President Trump’s recent decision to keep Jerome Powell as Fed Chair.

Trump Backtracks on Threats to Fire Fed Chair Powell

Despite earlier statements hinting at Federal Reserve Chair Jerome Powell’s removal, Donald Trump now says he does not plan to fire him. While he urged Powell to act more decisively on interest rates, Trump’s previous social media posts—labeling Powell as “Mr. Too Late” and calling for his “termination”—had rattled markets. Reports suggested the White House even explored legal avenues for dismissing Powell prematurely.

U.S. to Press U.K. for Lower Auto Tariffs, Looser Ag Rules

The U.S. is expected to push the United Kingdom to slash its automotive tariff from 10% to 2.5% in upcoming trade talks. According to Reuters, U.S. negotiators also want Britain to ease import restrictions on American agricultural products like beef and revise rules of origin for bilateral goods. These terms reportedly come from internal U.S. proposals cited by unnamed sources.

Citi Warns Tariffs Could Trigger Recession, Structural Damage

Citigroup’s Chief Economist warned that tariffs imposed by the U.S. could act as a “stagflationary shock” to the economy. The firm estimates a 40%–45% chance of a recession, noting that consumers may temporarily boost spending before tariffs hit. The biggest drag on GDP is expected in the second half of the year. The economist added that ongoing attacks on the Federal Reserve and other institutions risk damaging long-term investor confidence and the structural integrity of the U.S. economy.

Intel Planning to Cut 20% of Workforce, Sources Say

According to Bloomberg, Intel is preparing to announce job cuts that will affect over 20% of its workforce—amounting to around 20,000 layoffs. This comes only months after the company slashed roughly 35,000 positions. The move reflects ongoing restructuring efforts amid declining revenues and intensifying competition in the semiconductor sector.

Fed’s Kugler says higher than expected tariffs likely to send prices higher

• Federal Reserve Governor Kugler on transmission of monetary policy

• Tariff increases significantly larger than previously expected
• Economic effects of tariffs and uncertainty likely to be larger than anticipated
• Supports holding policy rate steady as long as upside risks to inflation continue, while economic activity and employment remain stable
• Fed policy well-positioned for macroeconomic changes
• If financial markets tighten persistently, could weigh on future growth
• Especially monitoring upside risks on inflation, downside risks on employment
• Inflation progress has slowed, remains above 2% goal
• Labor market solid, broadly in balance
• Longer-term inflation expectations largely well-anchored, hopes they remain so
• First-quarter GDP may show moderation vs 2024, but some front-loading of purchases to avoid tariffs
• Tariffs likely to put upward pressure on prices
• Facing potential shocks now, much related to tariffs and uncertainty
• I don’t think the public is losing confidence in us
• We have a lot of trust from the public; inflation expectations are anchored
• Uncommon for bond yields to go up and the dollar to weaken, but don’t jump to the conclusion that we are no longer a safe haven
• And I would certainly say that does not reflect on the Fed’s work
• Wages are not putting inflation pressures on the services sector
• So far, not seeing strong pressures in labor market as immigration declines
• Paying close attention to agriculture and construction, where immigrants account for a large portion of workers
• In those sectors wages are still consistent with 2% inflation
• Its not clear if AI will replace workers, likely enhance productivity
• If protect the economy so much that you don’t let new businesses come in, that could be a reversal on productivity

Canada’s New Housing Prices Flat in March as Supply Dries Up

Canada’s new housing price index came in flat for March, unchanged from February’s +0.1% increase. The stagnation highlights a slowdown in new construction, particularly in the condominium market, where the development pipeline appears to be nearly empty.

Canadian Visits to U.S. Drop as Trade Tensions Bite

Statistics Canada released cross-border travel data for February, showing a noticeable decline in Canadian travel to the U.S. amid ongoing trade tensions. While the drop wasn’t as steep as some had forecast, the data confirms that boycott calls and political tensions have begun to impact consumer behavior—just days before Canada’s national election.

World Bank Slashes Mexico 2025 GDP Outlook to Zero

The World Bank has revised Mexico’s 2025 GDP growth forecast to 0%, down sharply from the 1.5% it projected in January. This follows a similar downgrade from the IMF earlier in the week. The Mexican peso and equity markets have performed well this year, but growth prospects are fading fast.

Elsewhere in Latin America, Brazil’s outlook was cut to 1.8% from 2.2%, while Argentina was revised higher to 5.5% from 5.0%. The overall forecast for Latin America and the Caribbean was lowered to 2.1% from 2.5%.

Commodities News

Gold Falls Sharply Below $3,300 as Markets Cheer Tariff Relief Hopes

Gold prices plunged over $100 on Wednesday, sliding from a daily high of $3,386 to $3,288 as investor appetite for risk assets returned. The selloff was triggered by easing trade tensions between the U.S. and China and calming words from President Trump, who said he has no intention of firing Fed Chair Jerome Powell.

Tariff Optimism Spurs Risk-On Shift

A Wall Street Journal report added fuel to the rally in equities by suggesting the U.S. may consider lowering tariffs on Chinese goods. While Treasury Secretary Scott Bessent tempered those expectations—stating no unilateral moves have been made—the market still viewed the developments as positive for risk assets.

Gold Reacts to Dollar Strength and Rate Stability

The rebound in the U.S. dollar also weighed on gold. The Dollar Index (DXY) ticked up 0.09% to 99.72. Meanwhile, traders are pricing in a 94% probability that the Fed will hold rates steady at its next meeting.

Economic Data Recap

S&P Global’s PMI data showed a mixed bag: April manufacturing PMI improved from 50.2 to 50.7, while the services PMI fell from 54.4 to 51.4—missing the 52.8 estimate. Markets will be watching for durable goods orders and consumer sentiment data later this week.

Oil Settles at $62.27 After OPEC+ Output Talk Pressures Market

Crude oil futures ended the day at $62.27 per barrel, down $1.40 or 2.2%. Prices briefly touched a session low of $61.55 following reports that several OPEC+ nations are pushing for an accelerated production increase to be discussed at the group’s May 5 meeting.

The initial drop took the price below the 200-hour moving average ($61.95), though it bounced back above that level by the close—neutralizing some technical damage. Traders will now look for a break above the 100-hour MA at $62.94 to confirm a more bullish setup. A move back below the 200-hour mark would likely shift sentiment back to the downside.

U.S. Oil Inventories Surprise With Small Build, Big Gasoline Draw

U.S. crude oil inventories rose slightly by 0.244 million barrels last week, defying expectations of a 0.770 million-barrel draw. The bigger story was in refined products—gasoline stocks plummeted by 4.476 million barrels, far more than the expected 1.375 million draw.

Distillates also fell by 2.353 million barrels, versus expectations of just a 0.028 million decline. At the Cushing hub, inventories slipped by 0.086 million barrels, compared to last week’s 0.654 million-barrel draw. The data reflects tightening product markets, even as crude supply remains relatively stable.

Several OPEC+ members want the group to approve another accelerated oil output increase

• Crude oil prices move lower

According to sources

• Several OPEC+ members want the group to approve another accelerated oil output increase for June at meeting on May 5

The price of crude oil futures have moved lower on the headlines. The price is now down $-1.54 at $61.93. That is down around 2.5% on the day.

Copper Price Bounces Back as Tariff Optimism Lifts Market Sentiment

Copper prices are rebounding post-Easter, buoyed by growing hopes that the U.S. and China might resolve their trade disputes. Carsten Fritsch, a commodity analyst at Commerzbank, notes that the easing rhetoric from the U.S. government has lifted market sentiment, even if the fundamental supply picture remains stable.

According to the International Copper Study Group (ICSG), the copper market showed a surplus of 150,000 tons over January and February, though this narrows to a 49,000-ton deficit when adjusted for seasonal effects. Despite earlier concerns over copper ore shortages, processing and demand have remained steady compared to a year ago.

However, this could change if the trade conflict escalates again, potentially disrupting metal production in China and dampening global demand. For now, though, market sentiment is doing more of the heavy lifting than fundamentals in driving copper prices higher.

Swiss Gold Exports Heavily Tilt Toward the U.S., While Asian Demand Plummets

Swiss customs data for March continues to show a stark divide in gold export trends, Commerzbank’s Carsten Fritsch reports. While gold shipments to Asia remain subdued, exports to the U.S. surged again in Q1.

Exports to China and Hong Kong totaled just 13.4 tons in the first quarter—a massive 95% drop from the previous year. India fared similarly, receiving only 7.4 tons, down 87% year-on-year. This dramatic decline is attributed to sharply rising gold prices, which discouraged buying in traditional high-demand markets.

In contrast, the U.S. accounted for 77% of all Swiss gold exports during Q1, with nearly 450 tons shipped. The surge is tied to increased gold inventory at the Comex and inflows into U.S.-based gold ETFs.

Looking ahead, Fritsch warns that if prices remain elevated, Asian demand will likely stay muted, and U.S. shipments may decline too—especially since Comex gold stockpiles have plateaued since the start of April.

Silver Market Faces Narrower Deficit as Industrial Demand Slows

Silver is underperforming gold this year due to weaker-than-expected industrial demand, according to Commerzbank analyst Carsten Fritsch. While investment demand for silver bars and coins has shown a mild uptick, it hasn’t been enough to offset falling demand from other sectors.

The Silver Institute now expects total silver demand in 2025 to dip 1.4% to 1.15 billion ounces. Demand for industrial uses—originally forecast at 700 million ounces last year—has been revised down by 20 million ounces to 680 million, and is now forecast to fall slightly further to 677 million this year. Jewelry and silverware demand is also trending downward.

Silver supply, meanwhile, is projected to rise slightly, leading to a narrower deficit of 118 million ounces in 2025. That still marks the fifth year in a row of a supply shortfall but would be the smallest deficit recorded since 2021.

Kazakhstan Prioritizes Domestic Needs Over OPEC+ Output Goals

Kazakhstan’s Energy Minister has made it clear that national interests will take precedence over OPEC+ production limits, contributing to downward pressure on global crude prices. The minister emphasized that reducing output from aging oilfields could cause permanent damage and is not an option. Moreover, the government cannot legally force foreign oil firms operating in the country to scale back output.

Kazakhstan will back expansion efforts at the Tengiz field, a major project led by Chevron. Additionally, the Caspian pipeline network is expected to operate without major maintenance disruptions this year. The country is also positioned to increase oil shipments to Germany via Russian transit routes, contingent on Moscow’s stance. These remarks underscore Kazakhstan’s more independent stance in balancing domestic production with global oil diplomacy.

JP Morgan Predicts Gold Above $4,000 by Mid-2026

Reuters convey the info from a JP Morgan note:

JP Morgan projects that gold could exceed $4,000 per ounce by Q2 2026, driven by sustained demand from central banks and investors. The bank expects gold to average $3,675/oz by the end of 2025. Their analysts caution that demand could outpace current projections, leading to earlier price spikes. However, they also flagged a potential risk: a sudden drop in central bank buying could reverse this upward trend.

Shanghai Gold Exchange Raises Margin Requirements on Futures

The Shanghai Gold Exchange raised the trade margin for select gold futures contracts from 12% to 13%. The adjustment, aimed at reinforcing risk controls and market stability, took effect immediately. While not necessarily signaling a bullish view, the move reflects an effort by the exchange to keep volatility in check amid shifting market dynamics.

Private Survey Shows Major Drop in U.S. Oil Inventories

Private data from the American Petroleum Institute revealed a significant draw in U.S. oil inventories. Crude stocks dropped by 4.565 million barrels, gasoline by 2.180 million, and distillates by 1.640 million. Cushing inventories also fell by 354,000 barrels. The Strategic Petroleum Reserve, however, saw a modest increase of 500,000 barrels.

Europe News

Eurozone Economy Stalls in April as Services Activity Weakens

Preliminary figures for the euro area in April show a mixed picture with overall business activity barely expanding. The eurozone’s flash services PMI dropped to 49.7, missing forecasts of 50.5 and down from March’s 51.0. The manufacturing sector showed mild improvement, with its PMI rising to 48.7—beating the 47.5 estimate and just above the previous 48.6.

The composite PMI ticked down to 50.1, slightly below the 50.3 forecast and lower than March’s 50.9. Although manufacturing output reached its highest level in nearly three years, new orders remained a drag on growth for the eleventh consecutive month. The economic outlook is becoming more cautious, with concerns growing about the potential impact of U.S. tariffs and escalating trade tensions.

HCOB notes that:

“Manufacturing seems to be holding up better than expected. Despite the US introducing general tariffs of 10% and car tariffs of 25% at the start of April, most manufacturers in the Eurozone are not too fazed. Instead of falling off a cliff, they’ve actually increased production for the second month in a row, and even more robustly than in March. Manufacturers have also slowed down job cuts and managed to boost their profit margins, thanks to lower input prices and the ability to raise output prices faster than the previous month. Energy prices, which have dropped due to US recession fears, are currently a boon for the Eurozone’s manufacturing sector. Another positive factor is the announced increase in defence spending.

The service sector has turned into a bit of a party pooper. Activity has shrunk instead of growing, which it had been doing almost continuously since February 2024. This has pushed the whole economy into stagnation territory, according to the composite PMI. A faster drop in new business suggests this weakness might stick around for a while. However, the higher fiscal spending on infrastructure in Germany and defence spending across Europe should eventually benefit not just manufacturing but also the service sector, though with a bit of a lag.

The European Central Bank is getting some mild support for its rate-cutting stance from the price indicators in the services sector, which the monetary authorities are closely watching. Costs have risen at a similar rate to March, but the increase in selling prices has slowed significantly. Goods prices are showing mixed behaviour: input prices have reversed their inflationary trend of the past four months and have fallen, while output prices have increased a bit more than in March but still modestly.

Looking at the two major economies of the Eurozone, Germany and France, we see a similar pattern. Both countries saw an increase in manufacturing output in April, while activity in the services sector shrank. The overall weakness seems a bit more pronounced in France, especially in the services sector. This might be due to the contrasting political landscapes: in France, there is a constant risk of government collapse amid a fragile debt situation, while in Germany, there is a chance of having a functioning new government with significant fiscal leeway starting in May.”

Reuters poll BOE to cut rate by 25 basis points each quarter to 3.75% EOY 2025

• Economist expected 25 basis point cut at the May 8 meeting

A Reuters poll of economists shows:

• BOE to cut rates by 25 basis points each 2:45 .75% by the end of 2025. Same as the March poll.
• BOE to cut the bank rate by 25 basis points to 4.25% on May 8. The result is unanimous (67 economists polled)
• UK GDP growth to average 0.9% in 2025, 1.2% in 2026 versus 1% and 1.4% in the March poll

German Business Sentiment Worsens in April with PMIs Sliding

Germany’s private sector lost steam in April, according to preliminary HCOB data. The manufacturing PMI posted a slight upside surprise at 48.0 (versus 47.6 expected), but still ticked down from 48.3 in March. The services sector struggled more, with the index falling to 48.8, missing the 50.2 estimate and dropping from 50.9 previously.

The composite PMI landed at 49.7, shy of the expected 50.4 and lower than March’s 51.3. The data marked a series of short-term lows: the composite output index hit a 4-month low; services activity fell to a 14-month low; and manufacturing activity slipped to a 2-month low. These figures suggest Germany’s economic recovery remains fragile and vulnerable to external pressures, particularly from global trade friction and domestic demand stagnation.

Commenting on the flash PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:

“You could say Germany’s export-driven growth model is facing some serious challenges, but the US tariff policy has not caused a major slump in manufacturing just yet. In fact, manufacturers have managed to increase production for the second month in a row and even saw a slight uptick in export orders, something we have not seen since early 2022. This is pretty impressive and might be due to hopes of reaching some compromises with the US, along with Germany’s well-diversified export destinations – 90% of exports go to countries other than the US. Of course, there is still a lot of uncertainty, and optimism about future output has taken a bit of a hit.

“Profit margins for manufacturers could improve. Input prices have dropped significantly thanks in part to lower energy costs, and companies have been able to raise their selling prices a bit for the first time since May 2023. This could be a sign of resilience, possibly because many manufacturing companies are producing dual-use goods or can switch to making military- use products. With the new government likely to ramp up defence spending, many companies are starting to think along these lines.

“Things are not going smoothly for service providers. Activity is down, and optimism about future business has taken a hit. Still, the continued growth in employment and some signs of stabilization in new business show that companies are far from throwing in the towel. With the expected expansionary fiscal policy, service providers should be able to benefit from this development.

“Costs in the service sector have risen faster than in the previous month, dashing hopes that wage increases are slowing and feeding less into input costs. Combined with slower inflation of selling prices, this means profit margins in the services sector are taking a hit.”

France’s Services Sector Slumps Further in April, PMI Misses Forecast

France’s business activity continued its downward slide in April, with the latest HCOB flash PMI data showing weaker-than-expected results across services and composite indices. The services PMI dropped to 46.8—well below the expected 47.6 and down from 47.9 in March. The manufacturing PMI came in slightly better than forecasts at 48.2 versus 48.0 expected, although still showing contraction.

The composite index, which combines manufacturing and services activity, registered at 47.3, falling short of the 47.8 forecast and lower than the prior month’s 48.0. Analysts note that while current demand is already soft, the real drag from global tariffs and trade instability may not fully impact the economy until the second half of the year. In anticipation of worsening conditions, HCOB expects the European Central Bank to enact three more rate cuts by the end of 2025.

UK Business Activity Hits Multi-Year Lows as April PMIs Disappoint

The UK’s economy stumbled in April, with flash PMI data from S&P Global showing steep declines across services, manufacturing, and composite readings. The services PMI dropped sharply to 48.9—far below the expected 51.5 and March’s 52.5. Manufacturing PMI held steady at 44.0, matching expectations but still a worrying sign after last month’s 44.9.

The composite PMI sank to 48.2, missing the forecast of 50.4 and dropping from 51.5 last month. Key indicators show widespread deterioration: the composite output index is now at its lowest in 29 months; services business activity at a 27-month low; manufacturing output index at a 32-month low; and the manufacturing PMI overall sits at a 20-month trough. These figures underline a marked cooling in UK economic momentum as demand fades and uncertainty takes hold.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:

“While recent months have been characterised by UK businesses treading water, broadly stagnating since last autumn’s Budget, businesses are reporting more of a struggle to keep their heads above water in April.

“April’s fall in output was the largest recorded for nearly two and a half years, consistent with GDP declining at a quarterly rate of 0.3%, reflecting falling activity and demand across both manufacturing and services.

“Job cutting remains aggressive as business optimism about the year ahead sank to a two-and-a-half-year low, and one of the lowest levels yet recorded by the survey, even surpassing the low seen in the immediate aftermath of the Brexit vote in 2016.

“The disappointing survey reflects the impact of headwinds from both home and abroad. The biggest concern lies in a slump in exports amid weakened global demand and rising global trade worries, but higher staffing costs have also piled pressure on companies – linked to the National Insurance and minimum wage changes that came into effect at the start of the month. Just as export orders are falling at the sharpest rate since May 2020, during the pandemic lockdowns, firms’ costs spiked higher to a degree not seen for over two years.

“The collapse in confidence and drop in output during April raise red flags as to the near-term economic outlook and add pressure on the Bank of England to reduce interest rates again at its May meeting. There will be some uncertainty, however, as to whether the recent upturn in price pressures could become entrenched or whether it merely represents a short-term tax-related spike which should be ‘looked through’.”

BOE Bailey at IMF conference: Fragmenting the world economy will be bad for growth

Speaking at the IMF conference, Bank of England Bailey is saying:

• Fragmenting the world economy will be bad for growth.
• UK is an open economy so US relation with the rest of the world matters.
• We do have to take very seriously the risks to growth.
• China has had sustained a week household domestic demand, not sustainable forever
• Bretton Woods system is best one we have but it has challenges

ECB’s Knot: A US tariff of 25% on imports would lower GDP by about 0.3 pp

• Knot says it would lower it more with retaliation

• Tariffs would leave a persistent decrease in output
• In the near term, inflation might fall faster than March projections due to energy and uncertainty
• Global supply chains could put upward pressure on prices in the medium term
• Dynamics of underlying inflation are looking good at the moment
• Before US tariffs announcement I would have favored a hold in March
• Not concerned about prospect of stronger EUR and smaller current-account surplus

UK chancellor of the Exchequer Reeves: UK will not rush trade talks with the U.S on trade

UK Chancellor of the Exchequer Reeves is on the wires saying:

• UK will not rush trade talks with the U.S.
• UK will not relax food standards to secure a U.S. trade deal
• UK borrowing data reinforces the importance of controlling public finances
• UK announces measures to prevent future dumping of unfairly priced imports
• UK will review customs treatment of low-value imports

ECB’s Nagel: The Euro area is in stagnation picture this year

• Comments from the ECB policymaker, Joachim Nagel

• The world economy is in a very delicate situation.
• We need a better understanding of how to find compromise on tariffs.
• Tariffs are not a good policy, that’s for sure.
• There is a lot of uncertainty, we have to be cautious.
• In the Euro system, we are on a good path.
• We can come close to price stability over course of 2025.
• I see a lot of good news when it comes to inflation.
• Meeting by meeting is best way to conduct policy.
• We can’t exclude a German recession this year.
• It’s much too early to come to a conclusion on what the tariff scenario means for both sides of the Atlantic.
• Chinese products might come to Europe instead of the US.
• The role of Germany does not change with a new financial package.
• The package is an important message to the world that Germany is doing its homework.
• The German economy will do much better over coming years.
• The German fiscal package won’t be inflationary.
• The doubt over safe-haven status of US Treasuries is not good.
• It’s not good to doubt the US Dollar’s position as a safe haven.
• We should give back the US Treasury the safe haven status.
• Independence of central banks is the DNA of good central banking.
• Cannot exclude turbulence if central banks lose independence.
• Europe has to stand together in these complicated times.
• Confident that ECB rates will get back down to 2% this year.

ECB’s Villeroy warns that Trump’s trade policies will weaken financial stability & growth

• European Central Bank’s Francois Villeroy de Galhau:

• Trump has signed up the whole world to a “lose-lose game” on trade based on flawed economic arguments
• Trump’s attack on trade to dampen economic growth, including for the US, and threaten to undermine financial stability
• Villeroy called for de-escalation to avoid a spiral of rising tariffs
• “It’s more crucial than ever, across the Atlantic, to tell the truth, to fully assess the damage of a trade war, and to open the way for a possible positive dialog”

Asia-Pacific & World News

China’s stance on US-China trade talks revealed; Doors open for negotiation

• Chinese embassy emphasizes openness for talks with the U.S. without threats or pressure, calling for equality and respect in negotiations.

Eamon Javers from CNBC is reporting that the Chinese embassy has issued a statement addressing U.S.-China trade negotiations, emphasizing the following points:

• China’s “doors are open” if the U.S. genuinely wants to engage in talks.
• If the U.S. seeks a negotiated solution, it must stop threatening and blackmailing China.
• Constructive dialogue should be based on equality, respect, and mutual benefit.
• Applying extreme pressure while asking for a deal is counterproductive and “will not work.”

Kremlin: Putin remains open to contacts with Europeans and Ukraine to find a settlement

• Updates on the Russia-Ukraine peace deal

• Putin remains open to contacts with Europeans and Ukraine in the interest of finding a settlement.
• It has no contacts with Europeans or Ukraine.
• Asked about possible Moscow visit by Trump envoy Witkoff, says it has nothing concrete to say on the subject for now but will say more if and when there is news.
• It remains opposed to idea of deploying European peacekeepers in Ukraine.
• It welcomes US efforts to mediate.
• There are many nuances around a possible settlement that need to be worked out and positions that need to be narrowed.
• When asked about alleged US proposals for a settlement which have appeared in media, says there is a lot of fake news around.
• Settlement scenarios cannot be public and that work on them must be conducted in silence.
• It will not comment publicly on any Ukraine settlement scenarios.
• It understands that Wednesday’s meeting on Ukraine in London did not take place at a higher level because it had not been possible to narrow positions.
• Situation is quite fluid and everything is changing fast.

China Criticizes U.S. for Mixed Signals in Trade Negotiations

China’s Foreign Ministry criticized the U.S. for sending contradictory signals—calling for negotiations while simultaneously applying pressure. Officials said the U.S. can’t expect productive dialogue while maintaining a hardline stance. The remarks underscore the continued deadlock between the two nations, with China accusing the U.S. of essentially “negotiating with itself” in public without engaging in meaningful bilateral talks.

BMW to Equip China-Bound Vehicles with DeepSeek AI Starting Late 2025

BMW plans to start integrating AI developed by Chinese startup DeepSeek into its vehicles sold in China from the end of 2025. This move is intended to boost the in-car tech experience for Chinese consumers and aligns with BMW’s broader approach of teaming up with local tech players to remain competitive in China’s fast-evolving auto tech space. The announcement came during the Shanghai Auto Show, highlighting how BMW sees artificial intelligence as a critical pillar for innovation and global relevance in the automotive sector.

Trump Shifts Tone: “We’ll Be Nice” But Still Wants China to Make a Deal

Former President Donald Trump signaled a softer stance on China, saying he’ll be “very nice” but insists a deal must happen. Speaking about his approach to trade negotiations, he said, “If they don’t make a deal, we’ll set the deal.” Trump also suggested the U.S. is in a transition phase and that while tariffs on Chinese imports may be reduced from prior highs of 145%, they won’t be eliminated completely.

IMF Chief: Trade Tensions Top Global Economic Agenda

IMF Managing Director Kristalina Georgieva says easing global trade tensions is currently the most urgent issue on the international policy front. She also noted that the IMF is reassessing how it monitors national economies and structures loan conditions. Special attention is being given to nations with repeated IMF engagements, such as Argentina, Egypt, and Pakistan. The upcoming global policy framework will lean more heavily on structural reforms and emphasize private-sector-led growth.

PBOC sets USD/ CNY mid-point today at 7.2116 (vs. estimate at 7.3466)

• PBOC CNY reference rate setting for the trading session ahead.
• PBOC injected 108bn yuan via 7-day reverse repos at 1.50%

Australian Manufacturing Growth Slows Slightly in April

Australia’s flash manufacturing PMI for April 2025 came in at 51.7, a modest dip from 52.1 in March, according to S&P Global. The services index also edged down to 51.4 from 51.6, with the composite figure remaining unchanged at 51.4. While still in expansionary territory, the numbers indicate some cooling in business activity.

Japan’s April Factory Activity Contracts for 10th Straight Month

The preliminary manufacturing PMI from Jibun Bank for April 2025 fell slightly to 48.5 from 48.4, keeping Japan’s factory sector in contraction territory for the 10th consecutive month. New orders saw the sharpest decline since February 2024, and overall business confidence among manufacturers dropped to levels last seen in mid-2020. Companies cited concerns over global trade, economic uncertainty, labor shortages, and demographic challenges. On the other hand, the services PMI rose to 52.2—its best reading in three months—pushing the composite PMI up to 51.1 from 48.9.

Economists now more split on next BOJ rate hike – poll

• The findings from Reuters’ latest poll on the BOJ outlook

• 52% of economists expect the BOJ to hike rates to 0.75% in Q3 (previously 70% in March)
• 84% of economists expect no change at the next two BOJ meeting decisions on 1 May and 17 June
• 28% of economists see July as the specific month for BOJ to hike rates next
• 21% of economists see September as the specific month for BOJ to hike rates next
• 23% of economists see the BOJ only hiking rates in 2026 or later (previously 0%)

Japan economy minister Akazawa could visit U.S. for tariff talks as early as April 30

• Japan media reporting
• Japan economy minister Akazawa could visit U.S. for tariff talks as early as April 30, TV Asahi reports

Crypto Market Pulse

Crypto Market Tops $3 Trillion as Bitcoin Leads Rally; SUI, Solana, Cardano Among Top Gainers

The cryptocurrency market capitalization climbed 1% on Wednesday, surpassing the $3 trillion mark for the first time in April, driven by strong performances across major assets. Bitcoin led the charge, surging to $94,200 and logging new highs in each of the last three sessions. BTC rose 4% in early trading, extending its multi-day rally amid softening trade war concerns and strong institutional interest.

Altcoins Gain Momentum in Mixed Session

Among altcoins, SUI was the standout, jumping over 20% within 24 hours. The move appears linked to fresh developer activity and ecosystem developments sparking speculative buying.

Cardano (ADA) followed with a 4.3% rise, pushing its weekly gain above 13%. Analysts point to renewed optimism around scaling initiatives and a stronger DeFi presence. ADA is approaching a critical resistance zone near $1, with trading volumes picking up.

Ethereum (ETH) added 3.5%, trading around $1,782. Despite recent headwinds—including concerns over scalability and a shift in institutional interest toward Solana—ETH has regained momentum, aided by a rebound in DeFi staking activity.

In contrast, BNB and Tron (TRX) saw slight losses of about 2%, reflecting a more cautious tone across parts of the altcoin market.

SEC and Exchange News

In regulatory news, the U.S. SEC has filed charges against PGI Global’s founder Ramil Palafox in a $198 million crypto investment scam. The complaint alleges misuse of $57 million on personal luxury items and a Ponzi-like payout structure.

Gate.io announced it will fully compensate users impacted by a futures platform outage triggered by a surge in traffic during a system upgrade. While spot trading and withdrawals remained functional, futures and copy trading were temporarily suspended. Compensation details are still pending.

Bitcoin Price Rally Gathers Steam as CME Premium Surpasses 9% for First Time Since January

Bitcoin (BTC) extended its rally on Wednesday, trading above $94,000 following a two-day surge of 9.75% earlier in the week. The uptick comes amid easing concerns about a potential U.S.-China trade war, as well as a surge in institutional interest—most notably, a record-breaking $936.43 million inflow into U.S. spot Bitcoin ETFs on Tuesday, the highest daily inflow since January 17.

CME futures are also seeing a resurgence, with open interest rising to 140,000 BTC and a premium exceeding 9%, a level last reached on January 22. The renewed premium signals stronger market sentiment and demand among institutional players.

Trump’s remarks that high tariffs on China “won’t be that high” and that he doesn’t plan to remove Federal Reserve Chair Jerome Powell helped calm investor nerves. Treasury Secretary Scott Bessent further reinforced this tone by expressing optimism about de-escalating the trade dispute with China.

This environment boosted risk assets broadly—Bitcoin climbed 6.77% on Tuesday to close above $93,400 and continued its climb Wednesday.

Short Sellers Hit Hard as BTC Futures Leverage Builds

K33 Research reported that Bitcoin’s CME open interest jumped by 5,000 BTC over the Easter holiday, driven by active traders reentering the market. While current open interest remains below Q4 2024 highs (which peaked over 200,000 BTC), the upward trend indicates strengthening confidence.

As Bitcoin continues to rise, leveraged short sellers were squeezed out—Coinglass data shows $316.83 million in BTC liquidations over the past 24 hours, with 94.8% of those being short positions. These wipeouts often mark acceleration points for bullish trends, attracting more buying interest.

Institutional Flows Could Push BTC to $97K if Momentum Holds

According to SoSoValue, U.S. spot Bitcoin ETFs saw $936.43 million in net inflows on Tuesday, up from $381.40 million on Monday. This spike points to sustained institutional interest in BTC.

BTC had faced repeated resistance near its 200-day EMA around $85,000 since mid-April but finally broke through on Monday with a 9.7% daily gain. If current momentum continues, bulls may aim for $95,000, a key high from March 2, with a potential move to $97,000 if that level is breached.

The RSI currently reads 68—approaching overbought conditions but still indicating strength. If rejected from this zone, BTC could retrace toward $85,000 support. But holding above this key level would likely maintain the rally’s momentum.

72 Crypto ETFs Await SEC Green Light, Expanding Beyond Bitcoin

The U.S. Securities and Exchange Commission is currently reviewing 72 cryptocurrency-related Exchange Traded Funds (ETFs), according to Bloomberg’s Eric Balchunas. These proposals span a broad spectrum of digital assets, including major players like XRP, Litecoin, and Solana, along with more speculative offerings tied to meme coins such as Dogecoin and MELANIA.

Despite the influx of altcoin ETF applications, only Bitcoin and Ethereum ETFs have been approved so far—on January 10 and May 23, 2024, respectively. Bitcoin ETFs alone account for around 90% of crypto fund assets globally, with $103.34 billion in assets under management in the U.S., equivalent to 5.71% of Bitcoin’s total market value. Ethereum’s ETF is smaller but growing, with $5.66 billion, covering 2.77% of ETH’s market cap.

Analysts say that if the SEC opens the gates further, institutional access to cryptocurrencies could expand rapidly, fueling broader adoption. The pending approvals cover a wide range of strategies, from simple spot exposure to leveraged and thematic plays, reflecting deepening investor appetite for diverse crypto products.

Aptos Rallies on Osaka Expo Presence and Market Recovery

The price of Aptos (APT) rose for the second day in a row, climbing over 2% to $5.34 on the back of a broader rebound in the crypto market and momentum from its role in Expo 2025 in Osaka. The Aptos blockchain powers the expo’s official digital wallet, which processed more than 588,000 transactions and added over 133,000 new users since the event began on April 13.

Aptos also supports NFT “passport stamps” tied to various country pavilions, deepening visitor engagement through digital collectibles. These initiatives are helping to bolster visibility for Aptos as it seeks to expand user adoption in Asia and beyond.

Technically, APT is holding above its 50-day Exponential Moving Average (EMA) of $5.32, with momentum suggesting a possible push toward $8.00–$10.00. Resistance zones lie at the 100-day EMA ($6.18) and 200-day EMA ($7.21), and traders are closely watching these levels for signs of a breakout or reversal. The MACD indicator is currently flashing a bullish signal, supported by rising volume and green histogram bars. If Aptos maintains support above the 50-day EMA, the recovery could extend. However, failure to do so may send prices back toward April’s low of $3.89.

The Day’s Takeaway

Day’s Takeaway: Key Market Trends & Developments

United States

• Stocks Rally: U.S. markets posted strong gains, led by the NASDAQ, which jumped 2.5%. Investor sentiment improved on easing trade war fears and confirmation that Fed Chair Jerome Powell will stay in his position.
• New Home Sales Surge: March new home sales climbed to 724,000 units, the highest since May 2023, beating expectations. Median prices dropped 7.5% to $403,600, signaling improving affordability.
• Beige Book Signals Economic Stagnation: The Fed’s Beige Book noted flat growth, rising layoffs, and weakened business confidence amid tariff uncertainty. Consumer spending slowed, excluding autos.
• Gold Drops: Gold fell below $3,300 as risk appetite grew. Markets were lifted by talk of tariff reductions and no Fed leadership shake-up.
• Crude Oil Slides: Oil closed at $62.27, down 2.2%, after reports that some OPEC+ members want faster output increases in June.
• Manufacturing PMI Beats: April’s PMI rose to 50.7, ahead of expectations and showing resilience in factory activity despite global headwinds.

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Canada

• Housing Prices Stagnate: The New Housing Price Index for March was flat (0.0%), indicating a cooling in housing momentum—especially in the condo market.
• Travel to U.S. Falls: Statistics Canada reported a noticeable drop in travel to the U.S., as trade tensions and political discourse weigh on cross-border sentiment.

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Commodities

• Gold: Fell more than $100 on the day to $3,288, tracking lower as investors moved into riskier assets.
• Oil: Pulled back sharply, pressured by reports of a potential OPEC+ output boost.
• Copper: Rebounded modestly, supported by optimism around tariff talks, though Commerzbank cautioned that the market remains well-supplied.
• Silver: Demand is slowing. Commerzbank projects a smaller supply deficit in 2025 due to weaker industrial use and flat investor demand.

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Europe

• Eurozone Growth Flatlines: PMI data showed a mixed bag—manufacturing improved slightly, but services weakened. The composite PMI barely held growth at 50.1, pointing to a stalled recovery.
• Germany, France, UK PMI Weakness: All three major economies reported weaker business activity. The UK’s composite PMI fell to a 29-month low, and France’s services PMI slid further into contraction.
• Swiss Gold Exports Shift West: Swiss gold exports surged to the U.S. while deliveries to Asia fell 95% YoY, reflecting regional demand shifts due to price sensitivity.

Asia

• Japan’s Economy Still Under Pressure: April PMI readings showed a 10th straight month of manufacturing contraction. Confidence is at its weakest since mid-2020.
• Kazakhstan Prioritizes Output Over OPEC+: Energy officials confirmed that national interests override OPEC+ quotas, supporting production in legacy oilfields.
• Mixed Outlook on Tariffs: China criticized the U.S. for mixed messaging on trade. Meanwhile, the U.S. may reduce some tariffs, but details remain uncertain.

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Rest of the World

• Mexico’s Growth Forecast Slashed: The World Bank downgraded Mexico’s 2025 GDP outlook to 0%, from a prior estimate of 1.5%, citing weak fundamentals despite strong market performance.
• LatAm Mixed Revisions: Brazil’s outlook lowered slightly, Argentina’s revised upward. The regional forecast for Latin America and the Caribbean was trimmed to 2.1%.
• Global Debt Warning: The IMF warned that rising tariffs could lift the global debt-to-GDP ratio by 2.8 percentage points in 2025, pushing total debt toward 95.1% of GDP.

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Crypto

• Market Cap Reclaims $3T: Crypto markets gained 1%, breaching the $3 trillion mark for the first time this month.
• Bitcoin Nears $94.2K: BTC posted gains for a third consecutive session, driven by ETF inflows and easing trade tensions.
• Altcoins Rally: SUI surged 20% on developer activity; Cardano rose 4.3%, fueled by scaling upgrades; Ethereum climbed 3.5%, recovering ground lost to Solana.
• Regulatory Action: The SEC charged PGI Global’s founder with orchestrating a $198M Ponzi-style crypto fraud.
• Gate.io Compensates Users: The exchange pledged full reimbursement to futures traders impacted by a service outage during a system upgrade.