TARIFFS: EU-US Trade Call Set For 11:30ET - WSJ

The move lower in bonds, as well as hawkish repricing in EUR & GBP STIRs, follows the WSJ report pointing to a potential dialling back of some of U.S. tariffs imposed on China.

• Those markets trade in a manner that points to less of a global growth shock, resulting in shallower central bank cutting cycles.
• ~60bp of further ECB cuts now priced through year-end vs. ~70bp at yesterday’s close.
• Meanwhile, ~85bp of BoE cuts are priced over the same horizon after showing over 90bp of cuts for much of today.
• Oil moves away from lows in sync.

• Manufacturing PMI: 50.7 (cons 49.0) in April flash after 50.2 in March.
• Services PMI: 51.4 (cons 52.6) after 54.4 in March.
• Composite PMI: 51.2 (cons 52.0) after 53.5 in March, hitting a 16-month low.
• Highlights from the S&P Global PMI press release (in full here): "US business activity growth slowed to a 16-month low in April, according to flash PMI® survey data, with business expectations about the year ahead also dropping to one of the lowest levels seen since the pandemic. Prices charged for goods and services meanwhile rose at the sharpest rate for just over a year, with an especially steep increase reported for manufactured goods, linked to tariffs."

And specific detail on prices:

• "Average prices charged for goods and services rose in April at the sharpest rate for 13 months, increasing especially steeply in manufacturing (where the rate of inflation hit a 29-month high) but also picking up further pace in services (where the rate of inflation struck a seven-month high).
• Higher charges were attributed to rising costs, linked widely in turn to tariffs, rising import prices, and increased labor costs.
• Input costs in the manufacturing sector rose at a pace not seen since August 2022, as suppliers pushed through price hikes linked to tariffs, supply concerns and a weakened exchange rate.
• Service sector costs meanwhile rose at a slower rate than in March, though the increase was the second largest recorded over the past six months as higher raw material prices were accompanied by upward wage pressures."

• RES 4: $3600.0 - Round number resistance 
• RES 3: $3578.0 - 2.000 proj of the Dec 19 - Feb 24 - Feb 28 swing
• RES 2: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
• RES 1: $3500.1 - High Apr 22        
• PRICE: $3277.4 @ 14:53 BST Apr 23 
• SUP 1: $3230.0 - Low Apr 16  
• SUP 2: $3184.2 - 20-day EMA
• SUP 3: $3167.8 - High Apr 3 and a recent breakout level 
• SUP 4: $3047.0 - 50-day EMA 

The trend needle in Gold continues to point north and this week’s fresh cycle high reinforces bullish conditions. The latest move down - a correction - is allowing an overbought trend condition to unwind. Moving average studies are unchanged, they remain in a bull-mode position highlighting a dominant uptrend. The next objective is $3547.9, a Fibonacci projection. Initial firm support to watch lies at 3184.2, the 20-day EMA.