News

This is via Chief Economist at Moody’s Analytics, Mark Zandi:

• The Trump administration’s policies are set to severely diminish the economy, not only for the next few months but for years. The administration’s trade war is undermining the global safe-haven status of the U.S., which has provided incalculable benefits, including our economy’s exceptionalism.

Its part of a thread, in summary:

• Investors trust the U.S. due to stable laws and predictable governance.

• Trump’s erratic tariff policy undermines that stability and process.

• Political pressure on the Fed threatens its independence and risks inflation.

• Loss of credibility could push Treasury yields and lending rates higher.

• CDS spreads on U.S. debt show growing doubts about creditworthiness.

• The trade war has hurt U.S. credibility, but there’s still time to limit the fallout.

This article was written by Eamonn Sheridan at www.forexlive.com.

New Zealand March trade balance NZD 970mn surplus

• prior +392mn

Annual Trade Balance NZD -6.13bn

• prior -6.63bn

Exports in March 7.59bn NZD vs. prior 6.61bn

• imports 6.62bn vs. prior 6.22bn

NZD/USD not a lot moved, update:

This article was written by Eamonn Sheridan at www.forexlive.com.

A bot of another ICYMI, this time Morgan Stanley analysts warn that companies are facing the highest level of uncertainty since the early days of the pandemic. This growing murkiness is pressuring earnings estimates and accelerating downward revisions.

A key source of unease is President Donald Trump’s unpredictable tariff policy, which has left many firms struggling to plan effectively. Although there is currently a 90-day pause on some reciprocal tariffs, blanket 10% levies and targeted duties on steel, autos, and aluminum remain, while U.S. tariffs on Chinese imports have surged to at least 145%. China has retaliated with 125% duties of its own.

Meanwhile, the Federal Reserve has adopted a cautious stance, holding off on interest rate cuts as it awaits clearer signals on the economic fallout from trade tensions. Trump has responded with renewed threats to remove Fed Chair Jerome Powell.

Given these headwinds, Morgan Stanley expects the S&P 500 to remain range-bound between 5,000 and 5,500 in the near term, citing limited catalysts for a breakout in either direction.

Too many policy flip flops via tweet is not helping.

This article was written by Eamonn Sheridan at www.forexlive.com.

Gold price to a record above USD3430.

I’ve posted mutiple times on the drivers, including:’

• central banks buying as the reliability of the US and USD increasingly comes into question
• ETFs buyers
• geopolitical tension increasing

I really should add in short covering … I am seeing an acceleration of people asking me about shorting gold. Be careful out there folks! And don’t make me tap the sign:

This article was written by Eamonn Sheridan at www.forexlive.com.