• English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
On April 3, Kimberly Clausing, a former Biden administration official and nonresident senior fellow at the Peterson Institute for International Economics, called Trumps tariff announcement on Wednesday "very stubborn and much worse than I expected." "I expected things to be bad, but I didnt expect this level of self-harm. Its shocking that anyone thought this was a good idea. Id be shocked if we can get through this without a recession and Trump doesnt have to reverse his policies."On April 3, some economists worry that if Trump does not quickly cancel the latest round of tariffs, it may push the US economy into a recession. "If the US government implements these higher tariffs without major exemptions, it will be difficult for the economy to digest this. A recession seems more likely." said Mark Zandi, chief economist at Moodys Analytics. Zandi said, "In many ways, the tariffs announced by Trump are even worse than the worst case scenario he envisioned. If they stick to it, I will buckle up and prepare for the impact." Zandi added that on a static basis, tariffs account for nearly 2% of GDP (not considering the impact of tariffs on the economy and taxes), which makes this round of tariffs the largest tax increase since the tax increase used to finance the war during World War II.German Automobile Industry Association VDA: The EU must now speed up and make up its mind on the issue of free trade agreement.On April 3, the Reserve Bank of Australias latest report for the banking industry warned that continued uncertainty in US trade policy "could have a chilling effect on business investment and household spending decisions, and pose a significant headwind to the outlook for global economic activity and inflation." The Reserve Bank of Australia said there was also considerable uncertainty about the impact of possible changes in fiscal, regulatory and other government policies on global growth and inflation.The Hang Seng Index in Hong Kong opened on April 3 (Thursday) down 564.32 points, or 2.43%, to 22,638.21 points; the Hang Seng Technology Index opened on April 3 (Thursday) down 168.53 points, or 3.11%, to 5,257.91 points; the CSI 300 Index opened on April 3 (Thursday) down 219.05 points, or 2.57%, to 8,312.46 points; the H-share Index opened on April 3 (Thursday) down 61.24 points, or 1.59%, to 3,800.76 points.

Oil, Gold, the EUR/USD, the USD/JPY, and the USD/CNY Exchange Rates are All Being Analyzed

Larissa Barlow

Apr 08, 2022 10:16

Macroeconomic Analysis of the World

Although the tape is exceedingly choppy, US stocks were aided by a little increase in real rates, solid profit expectations, and a fall in energy prices.

 

Next week marks the start of the first-quarter earnings season, and as is customary, Financials will lead things off – nearly a third of the XLF ETF reports. And with the Fed unleashing the rate hike cannons, this should be music to the ears of bank stock investors.

 

Nonetheless, as inflationary pressures intensify, stock pickers will choose companies with strong pricing power in relation to cost exposures. And I believe this might be a major trend as we move forward in 2022.

 

However, there is a strong counterbalance here in the form of recession fears, and concerns about a consumer downturn could result in broader drivers. I believe investors will become more reliant on consumer data as they consider the trade-off between price inflation and growth deflation.

 

Despite this, it has become a cliche that aggressively tightening monetary policy during a period of cyclical instability and weakening consumer demand increases the likelihood of recession. 


截屏2022-04-08 上午9.43.25.png

Fundamental Analysis of Oil

Oil's topside feels constrained in the short term in the absence of further Russian energy penalties, following reports that the IEA will collectively release crude from emergency stocks. However, the slide below $100 for Brent was temporary, and those anticipating a larger flush were likely disappointed.

 

I continue to believe that the sentiment-driven sell-off will eventually give way and fundamentals will reassert themselves, particularly as more market participants become concerned about the US administration's ability to refill the SPR decline.

 

Oil prices remain erratic due to concerns about Russian supplies, a weakening Chinese economy, and a predicted decreased summer driving season in the United States due to rising gasoline prices.

 

Nonetheless, market shortfalls are anticipated to persist, though they will be mitigated somewhat by the expedited strategic stock release from May to November and weaker demand growth.

 

The primary bullish driver for oil is the continuous fall in Russian shipments as a result of self-imposed or official sanctions. Nonetheless, more businesses are committed to a 'private sector embargo,' which includes a complete wind-down of purchases by year's end. And in the court of public opinion, pressure is building on Brussels to act, and if that pressure valve pops and the EU bans Russian oil, Brent Crude (CO1) may hit $120 in an instant.

Fundamental Analysis of Gold

US inflation breakevens remain elevated, indicating to gold purchasers that either the already-priced combination of rate hikes and balance sheet run-off is insufficient, or that structural issues limit central banks' ability to influence inflation.

 

However, gold may move in a more narrow range in the short term, with rising real yields canceling out any bullishness on inflation hedging.

Fundamental Analysis of the Forex Markets

Another difficult week for the Eurozone, as enraged investors remained trapped in the fog of war.

Euro vs. United States Dollar

With the French presidential election taking place this weekend, the market may be hesitant about owning the euro, particularly heading into the second round of voting on Apr. 24, since incumbent Emmanuel Macron's poll lead has been eroding in recent weeks.

 

The euro has depreciated despite relatively hawkish ECB minutes warning that a prolonged period of above-target inflation would heighten the risk of expectations de-anchoring.

 

However, considering the ECB board members' track record of inconsistency, the majority of observers viewed these minutes with a grain of salt.

The US Dollar versus the Japanese Yen

Whether it's cross-JPY selling (a sign of negative risk sentiment), lower US rates, or lower energy costs, nothing appears to be able to keep the USDJPY down. The most suitable parallel appears to be a beach ball submerged - it is incapable of staying down.

The US Dollar versus the Chinese Yuan

With CPI inflation far lower than in the developed world, the PBoC and the government have the option of cutting interest rates and incentivizing consumer spending through fiscal transfers to offset the costs of the country's zero COvid efforts. This different strategy, which comes as the Fed prepares to unleash its monetary policy and quantitative easing bazookas, could result in cnh underperformance.