Wonderful Introduction:
I missed more in life than not, and everyone has missed countless times. So we don’t have to apologize for our misses, we should be happy for our own possession. Missing beauty, you have health: Missing health, you have wisdom; missing wisdom, you have kindness; missing kindness, you have wealth; missing wealth, you have avatradescn.comfort; missing avatradescn.comfort, you have freedom; missing freedom, you have personality...
Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua Official Website]: Tariffs trigger concerns about global economic recession, and the US dollar will become a safe haven." Hope it will be helpful to you! The original content is as follows:
On the Asian session on Tuesday, the US dollar index hovered around 103.09, and the US dollar rose 0.53% against other currencies, rising for two consecutive trading days, breaking from the six-month low hit last week. The strengthening of the dollar makes gold more expensive for holders of other currencies. The focus of the U.S. economy this week will be the March consumer and producer price reports released Thursday and Friday respectively. Data from Friday showed employers increased more than expected jobs last month, but unemployment rates also rose.
Analysis of major currencies
U.S. dollar: As of press time, the U.S. dollar index hovers around 103.09. The U.S. dollar index (DXY), which tracks the performance of the U.S. dollar (USD) against six major currencies, traded around the 103 area on Monday after rebounding on Friday. Market volatility has intensified as headlines suggest that the U.S. (US) temporarily suspended tariffs, although the remarks were quickly refuted by the White House. Technically, this week, U.S. data became the focus again; U.S. Consumer Price Index (CPI) inflation data is scheduled to be released on Thursday, and U.S. Producer Price Index (PPI) inflation and University of Michigan (UoM) Consumer Confidence Index survey results will be released on Friday. This will be the last wave of the “pre-tariff” phase on key U.S. inflation and sentiment data in 2025, marking a key measure for the rest of the year.
Euro: As of press time, EUR/USD hovered around 1.0953, and EUR/USD fell again on Monday, marking the second consecutive day of decline in Fiber and pushing buying to the 1.0900 level. After a brief break, the US dollar regained control of the safe-haven flow, and investor sentiment weakened and further strengthened the US dollar across the board. This week, U.S. data is once again in the spotlight, with consumer price index (CPI) inflation data set to be released on Thursday. On Friday, we can expect the Producer Price Index (PPI) inflation data and the University of Michigan (UoM) Consumer Confidence Index survey results. These will be the ultimate key indicators of U.S. inflation and sentiment in the early stages of tariffs in 2025, providing important benchmarks for the rest of the year. Technically, the dollar was hit by the new US tariff strategy, and the euro/dollar surged to a few months high above 1.1100. However, the recovery of safe-haven flows has been favorable to the dollar, allowing Fiber to fall from new highs and retest the 1.0900 mark, with potential for more losses.
1、美众议院议长：众议院仍将为特朗普全球关税计划“开绿灯”
据美媒Politico报道，美国众议院议长约翰逊周一表示，即便一些共和党议员公开恳请特朗普在周三关税生效前协商出取消关税的办法，众议院仍会为特朗普实施其大规模的全球关税制度提供“空间”。 "We'll give him the space necessary to implement policies and then see how things will go," Johnson said. The speaker went on to say that Trump was "actively involved and trying to solve" the trade deficit. Oppositions within the Republican Party are presented in the form of a joint bipartisan legislation designed to reclaim Congress’s powers in tariffs from the president. Previously, Democratic Senator Maria Cantwell and Republican Senator ChuckG, IowaRassley proposed legislation to limit the president's unilateral tariffs. U.S. Rep. Don Bacon (R. Nebraska) plans to propose a House version of the legislation on Monday. Johnson on Monday refused to publicly promised to submit the revised Senate budget plan to the House for a vote this week due to strong opposition from a group of fiscal conservatives. However, some senior Republican aides said the current plan is to hold a final vote on Wednesday afternoon as originally planned.
2. The European avatradescn.commission proposes to impose a 25% counter-tariff on a series of U.S. imported goods, according to Reuters, the document shows that the European avatradescn.commission proposes to impose a 25% counter-tariff on a series of U.S. imported goods, which will take effect from May 16. The European avatradescn.commission removed U.S. bourbon from its list of goods that intend to impose counter-tariffs. The document said the tariffs imposed on some of the above-mentioned goods will take effect on May 16, while the tariffs on other goods will take effect later this year, December 1. 3. Japanese Prime Minister Shigeru Ishiba said that Japan and the United States will continue to negotiate on tariff issues
Japanese Prime Minister Shigeru Ishiba failed to ensure tariff exemptions in a phone call with US President Trump on Monday, but the leaders of the two countries agreed that the issue should be further discussed by ministers of the two countries. Shigeru Ishiba said he conveyed Japan's serious concern that imposing tariffs on Japanese products "unilaterally" would harm Japanese avatradescn.companies' investments, adding that the two countries should seek broader mutually beneficial cooperation rather than tariffs.
4. UBS expects corporate bond spreads to reach the highest level since 2020.
UBS Group strategists predict that the impact of Trump's tariffs will push corporate bond spreads to the level at the beginning of the epidemic. Last week, concerns about tariffs that would slow the global economy shocked credit markets, with indicators tracking credit default swaps both showing their biggest gains since March 2023. Data shows that the average interest rate spread of high-grade bonds closed at 1.09 percentage points or 109 basis points last Friday, the highest level since August 2024. The junk bond spread closed at 427 basis points this week, the highest level since November 2023. Strategists including Matthew Mish wrote that UBS currently expects that by mid-2025, the corporate bond spreads for high-rated bonds (i.e., the additional premium for investors to hold riskier bonds relative to U.S. Treasuries, including Matthew Mish, may reach 160-170 basis points and junk bonds reach 600-650 basis points. The index tracking corporate bond spreads has not reached this level since the 2020 coronavirus pandemic. When the spread of investment-grade bonds approaches 150 basis points, the Fed usually starts to worry.
5.The 500 index has also avatradescn.come to the brink of a bear market, which may suggest a recession.
Futures linked to the S&P 500 index fell further on Monday, down more than 20% from their historical highs. The most popular benchmark index in the U.S. stock market is about to confirm the bear market. Dow Jones Industrial Average Price Index futures also fell 20% from all-time highs, while the Nasdaq confirmed last week in a bear market as concerns about the recession hit global stock markets after Trump's full tariffs. According to a widely used definition, if an index closes more than 20% below its historical closing high, the index is confirmed to have entered a bear market. The last time the S&P 500 confirmed it was in a bear market was in June 2022, when investors were worried about whether the Fed could curb post-epidemic inflation without triggering a recession. Bear markets often lead to recessions and continue until investors believe the worst phase of the recession has passed. Data from investment research firm CFRA shows that nine of the 12 bear markets since 1948 have been accompanied by economic recession.
Institutional View
1. Market Analysis: Tariffs may have a greater impact on the United States than the euro zone, thereby boosting the euro.
UBS Global Wealth Management analysts said in a report that the euro against the U.S. dollar EUR/USD should further rebound from an undervalued position, as US tariffs may damage the U.S. economy more severely than the euro zone. They said that while tariffs may have a negative impact on the eurozone economy in the near term, the ECB's previous rate cuts, Germany's expected fiscal stimulus and the EU's increased defense spending should boost economic growth in the avatradescn.coming years. "We expect the U.S. economy to be hit hardest by new tariffs, and from now on, the Fed's easing policy will surpass the ECB." UBS raised its forecasts for Europe and the United States in September 2025 and March 2026 to 1.12 and 1.14, respectively.
2. Danske Bank: The euro may continue to rise due to weak US economic outlook and EU fiscal reform.
Danske Bank analyst Frederik Romedahl Poulsen said in a report that the euro may continue to rise against the US economic outlook and the euro zone fiscal stimulus plan. He said the rising risk of a U.S. recession, coupled with President Trump's policy stance, has posed an increasingly greater drag on the U.S.'s structural growth prospects. The gap between the inflation-adjusted U.S. real interest rates and other regions may narrow, reducing support for the dollar. There are also obvious early signs that capital is flowing out of U.S. assets. "In the euro, fiscal reforms in Europe are beginning to boost market sentiment." Danske Bank expects the euro to rise to 1.14 against the dollar in six months.
The above content is all about "[Ihua Official Website]: Tariffs trigger concerns about global economic recession, and the US dollar will become a safe haven" is made by Ihua AvatradeForeign Exchange editor carefully avatradescn.compiled and edited it, hoping it will be helpful to your trading! Thanks for the support!
Spring, summer, autumn and winter, every season is a beautiful scenery, and it stays in my heart forever. Leave~~~