News

ECB cut its deposit rate by 25 bps points to 2.25% as widely expected, but the more notable shift came in the tone of its accompanying statement. ECB completely removed the reference to its policy stance being “restrictive,” a phrase that had previously signaled a bias toward further monetary easing. This change suggests policymakers believe […]

The post ECB cuts rates to 2.25%, drops “restrictive” language amid mounting uncertainty appeared first on Action Forex.

17 April 2025 The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. In particular, the decision to lower the deposit facility rate – the rate through which the Governing Council steers the monetary policy stance – is based on its updated assessment of the inflation outlook, the […]

The post (ECB) Monetary policy decisions appeared first on Action Forex.

First of all, I think all the talk about the Fed losing independence can be ignored. It’s not going to happen. The chances are so low that it doesn’t even deserve the attention.

But let’s say it does happen, what would be the consequences?

Well, pretty much pure chaos. The extent of the damage to the economy cannot even be imagined.

Inflation expectations would de-anchor immediately, even if actual inflation stayed the same. The government would certainly pursue expansionary policies and that would increase inflation.

The US Dollar and US Treasuries would be avoided like the plague. Gold would literally rise “to the moon”. The stock market would experience the worst bear market in history. And the great recession and depression would be seen as nice periods in comparison.

The US Congress would never allow this to happen because there’s even no way back. There would be always the spectre of this happening again and the damage would be everlasting.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Headlines:

• Dollar steadier as risk bounces a little ahead of European trading today
• Dow futures turn negative as UnitedHealth lowers annual profit forecast
• China maintains it is open to negotiations with US on trade, calls for mutual respect
• Japan finance minister expresses deep concern over impact of Trump’s tariffs
• Trump: Jerome Powell is always too late and wrong
• The ECB is 100% going to cut today but what’s expected for the other central banks?
• ECB set to deliver its sixth consecutive 25 bps rate cut, eyes on restrictive language
• What are analysts saying ahead of the ECB policy decision later?
• BOJ’s Nakagawa: Difficult to assess the impact of US tariffs at the moment
• Germany March PPI -0.7% vs -0.1% m/m expected
• Reminder: Market closures in observance of the Easter break

Markets:

• USD leads, CHF lags on the day
• European equities lower; S&P 500 futures down 0.4%
• US 10-year yields up 3.2 bps to 4.311%
• Gold down 0.6% to $3,324.48
• WTI crude up 1.4% to $63.35
• Bitcoin up 0.2% to $84,489

It was a relatively quiet session in terms of headlines, with just some light market movements as well overall.

A slight bounce in the risk mood is keeping the dollar steadier and that held for the most part during the session. UnitedHealth reported poor Q1 earnings and slashed its profit outlook and that dragged Dow futures down late on, weighing slightly on the market mood as well. Dow futures turned negative on the news, falling by over 1% with UnitedHealth of course comprising of roughly 9% of the index – the biggest in terms of weightage.

Still, S&P 500 futures are up 0.4% with tech shares leading the way. Nasdaq futures are up 0.7% currently.

In FX, the dollar is recovering a little bit of ground after the declines yesterday. EUR/USD is down 0.3% to 1.1365 with USD/JPY up 0.5% to 142.55 on the day. USD/CHF is continuing to keep off its recent lows, up 0.5% to 0.8170 on the day. Meanwhile, USD/CAD is up 0.3% to 1.3890 and AUD/USD down 0.2% to 0.6358 at the moment.

Elsewhere, the bond market continues to keep steadier while gold is easing back a touch after racing to fresh record highs yesterday. The precious metal is still holding well above $3,300 though, not showing much signs of letting up.

As things stand, it’s still about watching out for trade/Trump headlines while at the same time figuring out how the tariffs are going to keep weighing on the global economy during the interim.

For now, markets are keeping the calm. At this stage, it’s either we get some positive developments on trade first or hard data that shows the negative drag from tariffs first. If the latter comes earlier, that will be the next hammer to fall on risk sentiment. But if it is the former, then markets can start to look to grow to be more optimistic at least.

Coming up later, we’ll have the ECB policy decision and US weekly jobless claims to contend with as well.

This article was written by Justin Low at www.forexlive.com.