Germany's inflation fell, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on March 31

Global Market Review

1. European and American market conditions

The three major stock index futures fell, with Dow futures mainly blue-chip stocks falling 0.65%; S&P 500 futures falling 0.97%; and Nasdaq 100 futures mainly technology stocks falling 1.36%. European stock markets fell, with the German DAX index falling 1.76%; the French CAC40 index falling 1.73%; and the UK FTSE 100 index rising 1.19%.

2. Market news interpretation

Germany inflation fell, pointing to the possibility of a rate cut by the European Central Bank

①Germany inflation fell more than expected in March, and preliminary data showed that the inflation rate fell to 2.3%, lower than the market expectations of 2.4%. ②Inflation was 2.6% in February, and the core inflation rate (excluding food and energy prices) fell from 2.7% in February to 2.5% in March. ③Before the release of German inflation data, the market expected the euro zone inflation rate to remain at 2.3% in March, the same as in February. ④ The ECB has cut interest rates six times since June last year, with the most recent dropping key deposit rates to 2.5% in March. The return on the German inflation data may further promote the ECB to adopt a loose policy. ⑤In addition, another data released on Monday showed that the price of imports could indicate a future increase in inflation, which in turn suppresses consumer spending.

Bank of England proposes to increase deposit security limit

① The Prudential Regulatory Authority (PRA), a subsidiary of the Bank of England, proposes to increase the deposit protection limit for depositors when banks go bankrupt from the current £85,000 to £110,000 (about $142,300). ② The limit has been £85,000 since 2017. This adjustment will take into account inflation factors and will take effect in December if implemented. ③After the adjustment, the UK's deposit protection level will be higher than the EU (the EU is unified at 100,000 euros), but still lower than the US (the US depositor's coverage level is at least US$250,000)

Polish Airlines passenger plane landed in an emergency at Antalya Airport, Turkey

On March 31 local time, a passenger plane that took off from Israel and belonged to Polish Airlines, an emergency landing at Antalya Airport, Turkey due to technical failure. Antalya Airport was once in a state of tension. The flight carries 180 Israeli passengers. Antalya Airport Supervisor and Deputy Governor Suat Seitoolu said that the plane was forced to land due to technical problems and all passengers have been safely transferred to the waiting hall. Seitooulu also said that the technical team is rushing to the site for maintenance and the airline is arranging alternative flights for passengers to avatradescn.complete subsequent transfers as soon as possible. At present, the specific cause of the failure is still under investigation.

Arabica coffee is heading for the longest quarterly rise since 2011

Arabica coffee futures prices rose about 18% in the first three months of this year due to concerns about the drought in Brazil. The futures price has risen for the sixth consecutive quarter, and will record its longest consecutive rise since 2011. Last week, Brazilian café cooperative Coxupé said that higher than the year-round temperatures affected crops to be harvested in May, and farmers are currently holding stocks at record lows.

U.S. and euro zone bond yields fell, investors remained cautious

① Before Trump's tariff remarks, bond investors remained cautious and bought bonds, causing the U.S. and euro zone bond yields to decline. ② According to Tradeweb data, the 10-year U.S. Treasury yield fell 5.5 basis points to 4.198%; the 2-year U.S. Treasury yield fell 6 basis points to 3.849%. ③The yield on the 10-year German Treasury bond fell 4 basis points earlier to 2.693%. Investor caution reflects concerns that tariff policies may trigger economic uncertainty... Goldman Sachs raises the probability of a U.S. recession to 35%, predicting that the Federal Reserve and the European Central Bank will cut interest rates three times

① Goldman Sachs raises the probability of a U.S. recession from 20% to 35%, and expects the Federal Reserve and the European Central Bank to cut interest rates three times this year, after the previous expectation of a two-time rate cut. ② Goldman Sachs also lowered its U.S. GDP growth forecast for 2025 to 1.5%, lower than the previous 2.0%. At the same time, the agency expects the European economy to fall into a "technical recession" and its full-year growth expectations are sharply lowered. ③Goldman Sachs believes that Trump's plan to announce reciprocal tariffs on April 2 willThe average U.S. tariff rate rose by 15 percentage points, 5 percentage points higher than previously expected, which will have an impact on the global economy and financial markets. ④ Goldman Sachs expects the Federal Reserve to cut interest rates in July, September and November, while the previous expectation was two interest rate cuts in June and December. The ECB will cut interest rates once in April, June and July. ⑤ Goldman Sachs also lowered its year-end target price for the S&P 500 from 6,200 points to 5,700 points, the second cut this month and the lowest forecast among Wall Street investment banks.

UK mortgage approvals fell to six-month low

①UK mortgage approvals fell to six-month low in February, while consumer loan growth was close to the slowest in three years, as the market expected a rise in home purchase transaction tax in April. ② Bank of England data showed that lenders approved 65,481 mortgages in February, down from 66,041 in January, the lowest level since August last year, slightly below the 66,000 expected by Reuters' survey economists. ③ Consumers' net loans of 1.358 billion pounds in February, slightly higher than expected, and increased by 1.701 billion pounds in January. On an annualized basis, consumer loan growth was the same as 6.4% in January, the lowest level since May 2022. ④ Matt Swannell, chief economic adviser at EYITEMClub, said the decline in mortgage approvals reflects the decline in the home purchase boom at the end of last year, when home buyers bought homes before the April transaction tax surge. ⑤ Despite slowing consumer loan growth in February, analysts believe better-than-expected monthly growth is consistent with strong retail sales data, indicating that consumer spending is slow and gradually improving, and is expected to drive the first quarter-on-quarter economic growth by 0.3%.

Thailand has limited direct economic impacts due to the Myanmar earthquake

① On March 31, 2025, Citi economists pointed out in a report that Thailand has limited direct economic impacts due to the Myanmar earthquake last week. ② Normal activities in Thailand have recovered rapidly, and the manufacturing and most services have not been disturbed. Tourism and construction projects are expected to resume within a few days after passing safety inspections. ③ However, Citi is cautious about private consumption, as household debt levels are high, and demand for house renovation may affect future household spending. ④Within the background of external risks, weak manufacturing industries and unfavorable financial environment, weak household spending may intensify the Bank of Thailand's easing tendency.

3. Trends of major currency pairs in the New York Stock Exchange before the market

Euro/USD: As of 20:26 Beijing time, the euro/USD fell and is now at 1.0817, a drop of 0.13%. Before New York City, after retesting the key resistance of $1.0830, the EUR/USD price fell slightly in the latest intraday trading, while also hitting resistance at the 50 candle, double negative pressure and forced the price to fall as it attempts to gather enough positive momentum to get rid of these pressures.

GBP/USD: As of 20:26 Beijing time, GBP/USD rose and is now at 1.2950, ​​up 0.04%. Before the New York market, the GBP/USD price fell slightly in recent intraday trading, causing negative pressure due to the break below the SMA of 50 candles, but the main upward trend still dominates because the price trades along the trend line. avatradescn.compared with the price movement, after reaching the oversold level, the stochastic indicators showed positive signals, limiting recent losses and providing some impetus for the price.

Spot gold: As of 20:26 Beijing time, spot gold rose, now at 3122.48, an increase of 1.24%. Before the New York Stock Exchange, gold prices failed to maintain their early gains and rebounded lower. After the current resistance of $3090 has gained a foothold, it fell slightly. The price has accumulated positive momentum, which may help break through this resistance. At the same time, it also released the overbought saturation in the stochastic indicators, and negative signals emerged.

Spot silver: As of 20:26 Beijing time, spot silver rose, now at 34.179, up 0.21%. Before the New York market, silver prices fell in recent intraday trading, while seeking a bottom to help it accumulate momentum and rebound, so they rely on important support of $34.00.

Crude Oil Market: As of 20:26 Beijing time, U.S. oil rose to 69.430, up 0.13%. Before the New York Stock Exchange, U.S. crude oil prices traded sideways at the intraday level, while seeking a bottom to help it gather momentum and rebound higher, as it relies on the support of the current $68.90 support, and also relying on the support of the 50 candles SMA, providing some motivation for the price to help it rebound.

4. Institutional View

Barclays: The Bank of England may cut interest rates four more times in 2025

① On March 31, 2025, Barclays UK chief economist Jack Meaning said in a research report that the Bank of England may cut interest rates four more times in 2025. ② He pointed out that the UK labor market data may weaken in the next few months, and the uncertainty of the mid-year inflation outlook will decrease, which will prompt the central bank to take action. ③ Barclays expects that the Bank of England’s benchmark interest rate will drop to 3.5% after four interest rate cuts. ④ However, data from the London Stock Exchange Group showThe money market is currently only expected to cut interest rates twice this year, with a rate cut of 25 basis points each time.

RBA: Interest rates are expected to remain unchanged on Tuesday

RBA is approaching its second rate cut since 2020. Moderate inflation data and unexpected cooling of the job market indicate a prospect of interest rate cuts. Even so, traders and analysts expect the RBA to keep interest rates unchanged when the meeting ends on Tuesday. After all, the RBA cut interest rates at its last meeting in February, and the tone was clearly biased towards hawkish, warning the market not to assume that the central bank would cut further interest rates. Official quarterly Consumer Price Index (CPI) data released on April 30 may remain crucial, but investors' confidence in a rate cut in May is growing, with a probability of about 70%.

The above content is all about "[Ava Aihua Official Website]: Germany's inflation fell, and the short-term trend analysis of spot gold, silver, crude oil and foreign exchange on March 31" was carefully avatradescn.compiled and edited by the Avatrade foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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