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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

EUR/USD Rebounds from Support Ahead of the ecb Central Bank's Decision. What Should Traders Anticipate?

Drake Hampton

Apr 14, 2022 10:28

Tomorrow, the European Central Bank will release its April monetary policy statement. While no interest rate adjustment or fresh macroeconomic projections are anticipated at this meeting, this does not mean the gathering will be boring; on the contrary, the gathering may generate significant volatility, notably for the euro. Traders should pay close attention to policymakers' assessments of the economic outlook, as well as their recommendations on future measures, particularly any comments on asset purchases in light of quickly shifting market conditions.

 

After years of battling to keep inflation below the 2% objective, the picture shifted substantially in the aftermath of the pandemic, and even more dramatically in recent months following Russia's invasion of Ukraine. Now, the ECB is confronted with the inverse situation: soaring inflationary pressures; indeed, the euro area's headline CPI hit a record high of 7.5 percent last month amid soaring energy costs, raising concerns that the institution is falling behind the curve in its fight to restore price stability.

 

Although some central bank members appear to be eager to unwind stimulus more aggressively and have echoed this sentiment, it is unlikely that President Christine Lagarde will deliver any major surprises, particularly given that downside risks to the growth profile have increased and now threaten to tip the economy into recession.

 

Lagarde, on the other hand, might modify recent communications and indicate that the asset purchase program could finish early in the third quarter, as opposed to the previous imprecise judgment that the bond-buying scheme will end sometime in the third quarter.

 

While the progressively hawkish message is not a significant divergence from prior pronouncements, it may help solidify expectations for the first interest rate hike in September, a scenario that might trigger a temporary bull run in the euro. That said, there is some room for EUR/USD strength in the coming days, but not for sustained gains, as the Fed's significant monetary policy divergence from the ECB continues to act as a tailwind for the US currency.

 

Technical Analysis of the EUR/USD

 

EUR/USD appears to be recovering from a crucial support level near the psychological 1.0800 level ahead of the ECB announcement (EUR/USD is up 0.37 percent to 1.0879 at the time of this writing). If the pair continues its upward movement in the coming sessions, initial resistance is seen near 1.0950. If this ceiling is breached, purchasing interest may increase, clearing the way for a probable advance towards 1.1135. If, on the other hand, the sellers return and push the exchange rate lower, 1.0800 appears to be a support level. If this floor is strongly breached, EUR/USD may test 1.0730, followed by the 2020 bottom.

 

EUR/USD Technical Chart

 

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