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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua Ava Foreign Exchange Market Analysis]: U.S. bonds suffered the worst selling in more than 20 years, and the Federal Reserve Council has put forward a response plan." Hope it will be helpful to you! The original content is as follows:
The dollar index weakened on Monday, and investors are evaluating the dollar's safe-haven position amid the backdrop of US President Trump's ever-changing trade policy raising concerns about economic growth. The U.S. bond market has experienced the most tragic selling since 2001.
Affected by the Trump administration's tariff policies, the 10-year U.S. Treasury yield soared 48.5 basis points to 4.494% last week, the largest weekly increase since the bursting of the Internet bubble in 2001.Although U.S. Treasury yields rose last week, the dollar fell, indicating that the dollar has been "decoupled" from U.S. Treasury yields, triggering speculation that investors are withdrawing funds from the United States, worrying about the long-term impact of trade tariffs on the economy. "Policy formulation is so confusing that it is difficult to predict the direction of interest rates or economic development in the next 24 hours," said Adam Button, chief currency analyst at ForexLive. "This uncertainty is unbearable for most avatradescn.companies in international trade. The question is how quickly the impact will affect the consumer side. From the momentum, the market's view of the U.S. economic outlook is bleak, and this sentiment is the most direct Grounding is reflected in the money market. "
Brown Brothers Harriman (BBH) strategists WinThin and Elias Haddad wrote: "We expect the weakness to continue because even with the news of a suspension of tariffs, the risks to global economic growth remain high. We also believe that this dollar weakness is mainly due to the increasing loss of confidence in U.S. policy makers and the negative impact of policy uncertainty on the U.S. economy."
MacroHive firstCEO Bilal Hafeez pointed out that the US dollar's decline last week reached "four standard deviations", and it is avatradescn.common sense that there should be a rebound opportunity. But he also warned that if the current situation reflects a structural change similar to the collapse of the Bretton Woods system in the 1970s, then all inferences will no longer apply.
Asian Market
Yong Seo-yeon was suspected of launching a civil unrest case and denied it avatradescn.completely.
In March, China's exports increased by 12.4% year-on-year to US$313.9B, far higher than the 4.4% expectation and a sharp acceleration from the 2.3% year-on-year growth from January to February.
It is particularly noteworthy that shipments to the United States rose by 9.18% year-on-year, possibly due to early loading ahead of tariff tensions. Exports to ASEAN also increased, up 11.6% year-on-year, and double-digit growth to major partners such as Thailand (27.8% year-on-year) and Vietnam (18.9% year-on-year).
However, as a key intermediary in China's export supply chain, Vietnam is now facing pressure to strengthen control over its sources of goods and materials. According to a Foreign Ministry document, Hanoi authorities are urging avatradescn.companies to avatradescn.combat fraud of origin to avoid punitive U.S. tariffs, highlighting the growing scrutiny of Chinese goods shipped through third countries.
At the same time, strong exports were in sharp contrast to the year-on-year decline of -4.3%, resulting in a trade surplus greater than expected by US$102.6B.
European Market
EU Trade avatradescn.commissioner is holding talks in Washington; Hassett, Director of the US National Economic avatradescn.commission: We have made great progress in tariff negotiations with the EU.
U.S. Market
Trump said he is considering some measures to help automakers adjust their supply chain from Mexican, which recently helped Apple CEO Cook; the U.S. Department of avatradescn.commerce launched a 232 investigation into semiconductors, drugs, etc., and will withdraw from the tomato tariff suspension agreement formed with Mexico in 2019.
U.S. Treasury Secretary Bescent: There is no evidence that sovereign investors are selling U.S. assets. There is a toolbox to deal with bond market fluctuations, but it is far from being used. The fall will be interviewed for the successor of Federal Reserve Chairman Powell.
Federal Governor Waller: In the case of a significant economic slowdown, there is a tendency to cut interest rates earlier and more significantly. In the case of smaller tariffs, interest rate cuts may take place in the second half of the year. The impact of tariffs on inflation is expected to be temporary.
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