The weekly "hammer line" of the US dollar index stops falling, and the rebound is difficult to change the short-term downward risk

Asian Handicap Market Review

On Wednesday, the US dollar index continued to rebound as Trump and Becente released optimistic signals in trade negotiations. As of now, the US dollar is quoted at 99.69.

Tariff-

①British media: Trump plans to make the auto systemhttps://avatradescn.comManufacturers are exempt from partial tariffs

②The EU has proposed an initiative to buy more US liquefied natural gas and plans to reduce tariffs on some goods

③US Treasury Secretary: US-Japan trade dialogue has not set specific monetary targets

④ A total of 12 states in the United States sued the Trump administration for abuse of tariff policies "illegal"

⑤The United States launched a national security investigation into truck imports

⑥Trump: Car tariffs on Canada may increase in the future.

U.S. Treasury Secretary Bescent: The United States’ priority does not mean that the United States “works alone.” Reiterate that the United States still adheres to a strong dollar policy.

Feder Beige Book: Due to the increased economic uncertainty caused by factors such as tariffs, the outlook in many regions has deteriorated significantly.

The US S&P Global avatradescn.comprehensive PMI hit a 16-month low in April. The total number of new home sales in the United States in March was an annualized to a new high since September 2024.

Goldman Sachs lowered its forecast for the first quarter of the U.S. GDP growth rate to 0.1%.

Trump posted on his social media platform "Real Social" that Zelensky's remarks that "Ukraine will not legally recognize the occupation of Crimea" are very harmful to peaceful negotiations with Russia.

According to the Wall Street Journal: Trump's choice not to fire Powell was due to concerns between US Treasury Secretary Becent and US avatradescn.commerce Secretary Lutnik.

IMF: It is expected that the increase in tariffs in 2025 will lead to a 2.8 percentage point increase in global public debt to GDP, reaching 95.1% of GDP.

Summary of institutional views

Westpac: RBA is expected to cut interest rates by 25 basis points in May

Westpac analysts said that the RBA's Monetary Policy avatradescn.committee is currently expected to cut interest rates by 25 basis points at its May 20 meeting. Over the past few quarters, the RBA's short-term outlook has been data-driven. This makes it tricky to predict what decisions the Monetary Policy avatradescn.committee will make after its upcoming meeting. Can't be sure until you see the latest data. For example, if the revised average inflation rate in the fourth quarter of 2024 did not unexpectedly fall, the avatradescn.committee is likely to keep interest rates unchanged at its February 2025 meeting. However, the turbulence overseas has changed the situation and reversed the risk situation. Even if the inflation data for the first quarter is a bit disappointing, you can be sure that a 25 basis point cut in May will be a 25 basis point. We still expect that there will be two more interest rate cuts this year after the rate cut in May, but the risks in terms of timing and interest rate cuts have changed from the previous upside risk to the downside risk.

Analyst James Mackintosh: It may be the market that forces Trump to surrender, but don't think it has bottomed out

Trump surrenders on tariffs and the Fed, and investors can easily attribute it to market reactions. The power of the market is not magical. Asset prices are just a assessment of the economic outlook and future returns by many and concluded that no matter the imposition of tariffs or Trump’s intervention in the Fed, they are not good. The market is a real-time poll of money. In this sense, the market is important to Trump, but there is no guarantee that he will be ruled by them. I hope the market has imposed some restrictions on Trump’s will, which is a good thing for investors, but there are three big warnings.

First of all, don't think that Trump has set a bottom for the price—the S&P 500 fell to a low of 4,835 earlier this month was not the key, the ICEX dollar index did not fall below 100, and even the 30-year U.S. Treasury yield was not close to 5%. If it is the market that forces Trump to reverse it, it is likely to be a sign of capital flight, and concurrent losses, rather than some kind of "Trump Put" in the stock market or sensitivity to specific bond yields.

Secondly, this shows thatHow much risk Trump is willing to take before turning. Attacking the Fed's independence and imposing tariffs will damage the market, but he still did so. If prices have to fall sharply before he launches his next unfamiliar plan, investors will only get limited avatradescn.comfort during the decline.

Third, it all is based on the assumption that Trump has changed direction because of the market, and we cannot be sure that this is true. Trump may ask another adviser to discuss next time, or he may have made it up by himself. Investors should not be avatradescn.complacent that they should control Trump.

Facefield Bank: The Bank of England may have no choice under the impact of tariffs

Next week, the British Monetary Policy avatradescn.committee (MPC) will usher in a period of intensive speeches among members. This will be their last public statement before the May interest rate meeting, so their final view on the impact of tariffs will become the core focus of market attention.

According to our understanding, Bank of England Deputy Governor Briden and Bank of China avatradescn.commissioner Green previously admitted that the US tariff policy will have an impact on UK economic growth, but its specific impact on inflation is still unclear. We believe that tariff policies have made the trade-off between growth and inflation clearer, and it is expected that a 25 basis point interest rate cut in May is a foregone conclusion.

Rabobank: Trump's turn is just a "fairy tale", and there is "one thousand and one night" ahead!

After Trump eased his attitude toward tariffs and Powell, stocks rose, key bond yields fell, the dollar index continued yesterday's high, and gold attempted to rebuild its momentum fell sharply. But if you think that just because Trump said that in an era when central bank independence would be questioned by real-world political demands, he wouldn't fire Powell; or because he said something nice about tariffs for the ninth time as the world begins to split along the geopolitical dividing line, and that the story will have a perfect finale of "living together happily", then obviously you like fairy tales. Sadly, we still need to build a new global security, financial, economic and trade architecture to replace the old ones that aren’t working well enough and facing collapse, and that will take at least a thousand and one night!

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