ATFX Market Outlook 3rd April 2025

ATFX Market Outlook 3rd April 2025

Trump's Tariff Shock Spurs Bold Bets on Fed Rate Cuts

Market HighlightU.S. President Donald Trump announced on Wednesday a 10% baseline tariff on all imports to the U.S., with higher tariffs on major trading partners, intensifying the trade war he reignited after returning to the White House. Following Trump's announcement, traders increased bets on the Federal Reserve cutting rates starting in June, with three cuts of 25 basis points each expected by October.

U.S. stocks closed higher on Wednesday after volatile trading. Initially declining, markets rebounded as investors positioned themselves ahead of Trump’s tariff announcement. The Dow rose 0.56%, the S&P 500 gained 0.67%, and the Nasdaq Composite increased by 0.87%.

The announcement of reciprocal tariffs by Trump hit U.S. economic prospects, causing the Dollar Index to drop 0.49%. The USD/JPY fell, while the EUR/USD initially surged over 1% before settling at 1.0828, up 0.3%.

Gold prices moved toward record highs, supported by safe-haven demand as markets prepared for Trump’s latest tariff plans. Spot gold closed at $3,133.57 per ounce, up 0.7%. Oil prices fell due to concerns that global trade tensions from Trump’s tariffs could suppress demand.

Key OutlookThe Eurozone will release February PPI data. If the annual rate remains below 2%, combined with previous CPI data, it will complicate market interpretations of ECB rate cut prospects. In the evening, the ECB will publish the March monetary policy meeting minutes, potentially providing more policy details. Meanwhile, the U.S. will release March ISM Non-Manufacturing PMI, expected to remain steady at 53 (previous 53.5), indicating continued expansion with a slight slowdown.

Key Data and Events Today:

09:45 CN Caixin Services & Composite PMI MAR ** 15:55 EU GERMANY Services & Composite PMI MAR **16:00 EU Services & Composite PMI MAR ** 16:30 GB Services & Composite PMI MAR ** 17:00 EU PPI FEB **18:00 OPEC Meeting *** 20:30 US Initial Jobless Claims *** 22:00 US Services PMI MAR *** Tomorrow20:30 US Nonfarm Payrolls MAR *** 20:30 CA Unemployment Rate Mar** 23:25 Fed Chair Powell Speaks *** 

EURUSD

· Resistance: 1.0955 / 1.0981

· Support: 1.0843 / 1.0817

On Wednesday, the EUR/USD pair saw a bullish surge after the Trump administration announced tariffs that turned out to be less severe than many investors had anticipated. U.S. Nonfarm Payrolls data could impact the pair, with geopolitical factors as key drivers.

GBPUSD

· Resistance: 1.3089 / 1.3107

· Support: 1.3016 / 1.2994

GBP/USD hit six-month highs after Trump announced less severe tariffs, including 10% on imports and 25% on cars. This may raise inflation and keep Fed rates high. Key U.S. Nonfarm Payrolls data could impact markets. GBP/USD broke out at 1.3000, with potential for further gains.

USDJPY

· Resistance: 148.62 / 148.98

· Support: 147.00 / 146.66

USD/JPY fluctuated as Trump announced 10% tariffs on imports and 25% on cars, effective April 3. Key tariffs include China (34%) and the EU (20%). The pair hit 150.50 but dropped as traders sought the safe-haven Yen.

US Crude Oil Futures (MAY)

· Resistance: 71.52 / 72.23

· Support: 68.42 / 67.90

WTI crude fell 3% to $69 as Trump's tariffs spooked markets. Oil imports were exempt but fears of economic impact and lower demand rose. U.S. crude inventories unexpectedly increased, and Russia tightened exports. Investors eye the OPEC+ meeting for supply insights.

Spot Gold

· Resistance: 3184 / 3206

· Support: 3114 / 3092

Spot Silver

· Resistance: 33.82 / 34.00

· Support: 33.25 / 33.02

Gold prices soared to a record high after Trump announced broad tariffs, including a 10% duty on U.S. imports and more on major economies. This raised concerns about global trade and economic growth, leading investors to seek safe havens. 

Dow Futures

· Resistance: 42826 / 43077

· Support: 41745 / 41489

The Dow Futures fell 2.4% following President Trump's announcement of a 10% tariff on all U.S. trading partners. This move sent shockwaves through the market, as investors reacted to the potential economic impact and uncertainties arising from the new trade policies.

NAS100

· Resistance: 19872 / 20040

· Support: 19329 / 19158

NAS100 futures dropped 4.5% after Trump announced unexpected 10% tariffs and higher rates for certain countries, despite a 0.9% gain in regular trading, due to inflation and retaliation concerns.

BTC

· Resistance: 85914 / 87374

· Support: 79830 / 78420

Bitcoin dipped after Trump announced unexpected tariffs, impacting China and raising trade war fears. Circle, the USDC issuer, filed for a $5 billion IPO on the NYSE, aiming to become a major crypto firm amid market volatility.

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