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Financial markets entered Tuesday on a subdued note, with the Asian session notably quiet. While US stocks managed a rebound overnight on speculation that the April 2 “Liberation Day” tariff rollout might be narrower in scope than initially feared, sentiment failed to fully carry into Asia. Equity indices across the region were mixed, reflecting ongoing investor caution. In the currency markets, major pairs remained trapped within yesterday’s ranges, signaling a broader wait-and-see mode among traders.

Yen is seeing some mild recovery after Monday’s selloff, partially supported by signals from BoJ’s latest January meeting minutes. The central bank reaffirmed its readiness to tighten policy further. Still, external developments—particularly the uncertainty over global trade and US tariffs—are making the policy path less clear, forcing BoJ to move with greater caution in coming months.

Looking ahead to the European session, Germany’s Ifo Business Climate data will be watched. Still, most of the optimism linked to Germany’s fiscal expansion appears to be already priced in. Unless there’s a sharp upside surprise, the report may not trigger much market movement.

Later in the day, US Consumer Confidence figures are in focus. Expectations are for a continued decline, reflecting growing concerns over the economic fallout from reciprocal tariffs. Yet, this deterioration in sentiment has become a familiar theme, and its market impact may also be muted unless the drop is significantly worse than expected.

What investors truly crave are concrete details surrounding Trump’s tariff due next week. Until then, markets are likely to remain rangebound and headline-driven. With such a pivotal policy move on the horizon, traders are understandably reluctant to take strong directional bets. That has kept volatility suppressed for now, even as the risk environment remains fragile underneath the surface.

Technically, a major focus now is USD/JPY, which has extended the rebound from 146.52 short term bottom this week. Strong resistance is expected from 150.92 support turned resistance, and 55 D EMA (now at 151.08) to limit upside. However, firm break of this zone will argue the fall from 158.86 has completed, and turn near term outlook bullish for stronger rebound. The next move in USD/JPY would determine the overall tone of Yen in the markets.

In Asia, at the time of writing, Nikkei is up 0.56%. Hong Kong HSI is down -1.99%. China Shanghai SSE is down -0.05%. Singapore Strait Times is up 1.11%. Japan 10-year JGB yield is up 0.028 at 1.574. Overnight, DOW rose 1.42%. S&P 500 rose 1.76%. NASDAQ rose 2.27%. 10-year yield rose 0.079 to 4.331.

BoJ minutes signal readiness to tighten further if outlook holds

Minutes from BoJ’s January 23–24 meeting revealed a growing consensus among policymakers that further tightening would be appropriate, provided the current economic and price outlooks hold.

While the central bank raised policy rate to 0.5%, members acknowledged that real interest rates remained “significantly negative”, ensuring “accommodative financial conditions would be maintained.”

However, the path ahead is clouded by global uncertainty. While BoJ held rates steady at its latest meeting last week, it flagged increasing risks from escalating US tariffs.

Nevertheless, Governor Kazuo Ueda emphasized that stronger-than-expected wage growth and persistent food price inflation could keep upward pressure on underlying prices, indicating that the case for another rate hike remains very much alive.

Fed’s Bostic sees just one rate cut in 2025, warns tariffs may reinforce inflation

Atlanta Fed President Raphael Bostic said in a Bloomberg interview that he’s now projecting just one cut by year-end, down from his earlier expectation of two.

Bostic explained the shift was due to his view that inflation will be “very bumpy and not move dramatically and in a clear way to the 2% target”. With inflation unlikely to return to target until 2027, he believes the path to neutral must also be delayed.

Bostic also expressed concern about the inflationary impact of rising tariffs. While such measures are often assumed to cause a one-off increase in prices, Bostic suggested the current environment could be different.

In his view, businesses and consumers may have grown more tolerant of elevated inflation following the pandemic, making price hikes more likely to stick. He noted that many business leaders now feel confident about “a complete pass-through” of higher costs on to customers without fear of losing market share.

BoE’s Bailey calls for trade cooperation and embraces AI as growth catalyst

BoE Governor Andrew Bailey urged greater international cooperation to resolve growing strains in the global trading system. In a speech overnight, he pointed to the disruptions caused by US President Donald Trump’s trade policies, emphasizing that resolving these challenges requires “multilateral setting rather than set tariffs bilaterally”.

In a more optimistic tone, Bailey also pointed to artificial intelligence as a transformative force for the UK and global economy. Comparing AI to electricity in the early 20th century, he said the technology could meaningfully raise growth and per capita income over time. He called for policy support to facilitate AI’s development as the “most likely general purpose technology,” capable of driving broad-based economic gains in the years ahead.

ECB’s Escriva warns of extreme uncertainty and skewed growth risks

In remarks delivered overnight, Spanish ECB Governing Council member Jose Luis Escriva highlighted that “growth risks are more downside than upside.” While he acknowledged that supportive fiscal policy could offer some near-term uplift, he stressed that the broader risks — particularly to the downside — are dominating the economic outlook.

Escriva painted a grim picture of the current global backdrop, describing it as “extremely uncertain.” He noted that today’s uncertainty global index levels are at their highest since records began — exceeding those during the Covid-19 pandemic, the war in Ukraine, the 9/11 attacks, and even the peak of the Great Financial Crisis.

Despite the fact that worst-case, disruptive scenarios have yet to materialize, Escriva emphasized that ECB must be “readier than ever” to revise its forecasts and relevant action should conditions change”.

Looking ahead

German Ifo business climate ins the main focus in European session. Later in the day, US will release consumer confidence, house prices and new home sales.

USD/CAD Daily Outlook

Range trading continues in USD/CAD and intraday bias remains neutral for now. Overall, price actions from 1.4791 are seen as a corrective pattern. On the upside, break of 1.4541 will extend the second leg from 1.4150 to retest 1.4791 high. On the downside, break of 1.4238 will argue that the third leg has already started through 1.4150 support.

In the bigger picture, long term up trend is tentatively seen as resuming with prior breach of 1.4667/89 key resistance zone (2020/2015 highs). Next target is 100% projection of 1.2401 to 1.3976 from 1.3418 at 1.4993. This will remain the favored case as long as 1.3976 resistance turned support holds (2022 high), even in case of deep pullback.

Source: ACTIONFOREX

Market Overview

The US Dollar Index (DXY) hovered near 104.311 on Tuesday, showing resilience despite mixed signals from key economic data and ongoing uncertainty surrounding trade policy.

The greenback found moderate support as stronger-than-expected services sector performance offset concerns about manufacturing weakness.

Services Sector Strength Offsets Manufacturing Contraction

The S&P Global US Composite PMI rose to 53.5 in March, recovering from February’s 10-month low of 51.6 and marking the fastest pace of expansion since December 2024.

The Services PMI led the gains, jumping to 54.3 from 51.0—well above expectations.

However, the Manufacturing PMI slipped to 49.8, down from 52.7 and below the forecast of 51.8, indicating a contraction and highlighting uneven momentum across sectors.

Dollar Faces Policy Uncertainty Amid Inflation and Trade Concerns

The dollar faces competing pressures. On one hand, Atlanta Fed President Raphael Bostic noted persistent inflation concerns, signaling a slower pace of rate cuts through 2025.

On the other, potential disruptions from former President Trump’s proposed trade policies have raised investor concerns about economic headwinds.

Fed Chair Jerome Powell’s recent remarks, which pointed to a strong labor market and inflation gradually approaching the 2% target, helped limit downside risks for the dollar.

Traders Eye Inflation Data and Fed Guidance

Looking ahead, market participants are focused on upcoming US economic releases and Federal Reserve commentary for cues on monetary policy.

The Personal Consumption Expenditures (PCE) Price Index, due Friday, will be closely watched as a key inflation gauge.

Additionally, developments in US-China trade negotiations could influence dollar sentiment in the coming sessions.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is holding steady around $104.311, trading just above its pivot point at $104.261. Price action remains constructive, with support from the 23.6% Fibonacci retracement level reinforcing a mildly bullish tone.

The index is also above its 50-day EMA at $103.998, though still under the 200-day EMA at $104.397, which could act as near-term resistance.

A sustained move above $104.903 would strengthen the case for a rally toward $105.429. On the downside, any drop below $104.261 could pull the index back toward support at $103.763 and $103.211.

GBP/USD Technical Analysis

GBP/USD is trading around $1.29223, holding just under its pivot point at $1.29298. The 50-day EMA at $1.29359 is capping upside attempts, adding to the pressure on the pair.

The broader setup remains neutral-to-bearish in the short term, especially as price stays below this dynamic resistance. If buyers manage to reclaim $1.29298 with conviction, the path opens toward $1.29744, followed by $1.30141.

But if the pair fails to break above the EMA zone, downside risks return, with immediate support at $1.28950 and deeper pressure likely down to $1.28602.

EUR/USD Technical Forecast

EUR/USD is hovering near $1.08003 in early trading, struggling to gain traction as it sits just below its pivot point at $1.08079. The pair remains trapped in a downward channel, reflecting a cautious tone in the market.

Price is sandwiched between the 200-day EMA at $1.07854 and the 50-day EMA at $1.08380, suggesting limited momentum in either direction. A clean break above $1.08079 would be needed to shift the near-term bias, potentially opening the door toward resistance at $1.08595.

Until then, bears are likely to stay in control, with immediate support at $1.07643 and further downside risk toward $1.07169. The broader picture favors consolidation unless a clear catalyst breaks the current range.

Source: FX Empire

U.S. President Donald Trump greets members of the audience after signing a proclamation during a Greek Independence Day celebration at the White House on March 24, 2025 in Washington, DC. 

U.S. President Donald Trump's tariffs have so far taken the shape of country-specific, sweepingly reciprocal, targeted at sectors and applicable only to countries with a certain trade relationship with another.

He has also been "flexible" in implementing them — as he remarked Friday on the possibility of doing so — granting last-minute pauses, exceptions to goods under trade agreements and potential reprieves even for across-the-board tariffs.

Markets rallied Monday, driven by Trump's hint that countries could get a "break" from reciprocal tariffs. But it's unlikely to be a sustained upward trend, given the wild swings in the types, and the unpredictable executions, of Trump tariffs.

Strategists often look at technical trends in stocks' movements, such as their 200-day moving average, in an attempt to divine their future. It might be more fruitful, in this political epoch, to shift that scrutiny to Trump, who has alternately caused markets to pop — and plunge — with one pronouncement.

What you need to know today

New Trump tariffs, again
U.S. President Donald Trump said at a Cabinet meeting earlier on Monday he will soon announce tariffs targeting automobiles, pharmaceuticals and other industries, and, at a White House event later the same day, added the lumber and semiconductor industries to his list. Trump also said Monday the U.S. will impose 25% tariffs on countries that buy oil and gas from Venezuela.

Possible 'breaks' for tariffs
Even as Trump said he would impose tariffs on industries, at a White House event Monday, he said he "may give a lot of countries breaks" on the reciprocal tariffs, which are set to take effect April 2. When pressed for clarification on whether sectoral tariffs will also start that day, Trump initially said, "Yeah, it's going to be everything," before adding, "but not all tariffs are included that day."

U.S. stocks shoot up
U.S. stocks jumped Monday on relief that Trump tariffs might not be as severe as expected.  The S&P 500 gained 1.76%, the Dow Jones Industrial Average rose 1.42% and the Nasdaq Composite rallied 2.27%. Tesla shares popped 11.9%, their best day since Nov. 6, 2024, a day after Trump's election victory. Europe's regional Stoxx 600 index dipped 0.13%. Swedish defense firm Saab gained 4.5% after UBS upgraded its stock to buy from neutral.

Hyundai's $21 billion investment in U.S.
South Korean conglomerate Hyundai on Monday announced a roughly $21 billion investment in U.S. onshoring that includes a $5.8 billion steel plant in Louisiana, announced Trump, Hyundai Chairman Euisun Chung and Louisiana Gov. Jeff Landry Monday. The plant is set to hire more than 1,400 employees and will produce steel that will be used by Hyundai's two U.S. auto plants to manufacture electric vehicles.

[PRO] Magnificent Seven rebound?
The performance of the "Magnificent Seven" stocks can serve as a barometer for investor sentiment toward the U.S. market, some analysts think. Their rally on Monday, after a monthslong rout, has generated optimism for a turnaround — but one equity strategist thinks investors shouldn't get their hopes up.

Protesters clash with Turkish anti riot police as they use tear gas and water cannons during a demonstration following the arrest of Istanbul's mayor, in Ankara on March 21, 2025. 

Political and financial turmoil set to dominate Turkey, risking economic stabilization plans

More than 1,100 people have been arrested in Turkey's nationwide protests since demonstrations began on March 19, Turkish authorities said Monday, as political and economic instability grips the nation following last week's arrest of Istanbul Mayor Ekrem Imamoglu.

Analysts expect a prolonged period of volatility for the Turkish lira and the foreign reserves that the country will need to burn through in order to keep it afloat.

Central bank officials spent $12 billion in foreign reserves last week to prop up the lira, the Financial Times reported as of March 21, after the currency hit a record low of more than 40 to the dollar. Markets initially plunged on news of the arrest, and Turkey on Sunday banned short selling and relaxed buyback rules in an effort to bolster stocks.

Source: CNBC

[Quick Facts]

[News Details]

[Today's Focus]

Panels on the energy transition and all things related, from oil to minerals, kick off the Financial Times Commodities Global Summit this week in Switzerland. German manufacturers weigh in on gas storage plans in Europe. And, coffee is not expected to get cheaper any time soon.

Critical Minerals

Critical minerals are vital for clean energy and the fight for them is intensifying, with US President Donald Trump even evoking wartime powers to produce them. China is the undisputed leader in extracting the minerals, but it is curbing exports in response to US trade tariffs. Other nations joining the race to build up supplies, however, will find extracting and then refining minerals into a usable form is a complex undertaking.

Coffee

“Roasters are struggling,” says Thiago Cazarini, a broker in Brazil’s largest coffee-growing region. The processors who typically take positions in the futures market to protect themselves from price fluctuations changed course when the commodity began rising last year, betting they could secure a better deal later. But supply shortages persisted and prices kept climbing. Coffee drinkers can expect to see the impact of that at the register. Coffee futures rose Monday in New York.

Copper

Copper is flirting with records in New York after hitting $10,000 on the London Metal Exchange, the highest since October. Used in wiring, plumbing and industrial machinery, copper has been flowing into the US at breakneck levels as the Trump administration hints at tariffs on the colorful metal. Traders smell a windfall in arbitrage opportunities, while bulls remain steadfast. Copper rose Monday.

Oil

The US oil industry, the world’s biggest, has undergone a dramatic overhaul over the past 2 1/2 decades as a result of the shale boom. In the mid-2000s, America was a net importer of as much as 14 million barrels a day of crude oil and refined fuels, while today it’s a major supplier to overseas markets. The most-recent government data shows the US just hit a fresh record for shipping the most oil overseas relative to how much it buys. Futures rose Monday.

Gas Storage

Gas inventories are a problem for Europe after a cold winter left reserves low. To ensure it has enough gas to get through the heating season, the European Union is requiring storage facilities to be at least 90% by Nov. 1. Some countries, including Germany, the world’s third largest economy, are pushing to lower the target. A German industry lobby joined the chorus, citing the nation’s high energy prices.

Source: Yahoo Finance