MNI US OPEN - BoJ See Little Need for Change to Hike Stance
EXECUTIVE SUMMARY
- JAPAN’S KATO AIMS TO FURTHER FX DIALOGUE WITH BESSENT THIS WEEK
- DOLLAR WEAKNESS RESULTS IN SHOW BELOW Y140 FOR USDJPY
- BOJ IS SAID TO SEE LITTLE NEED TO CHANGE BASIC RATE HIKE STANCE: BBG
- ISHIBA PENS LETTER TO XI AS JAPAN AIMS TO AVOID TRADE CROSSFIRE
- ECB'S SURVEY OF PROFESSIONAL FORECASTERS SHOWS HIGHER INFLATION OUTLOOK
Figure 1: ECB survey shows slight uptick in inflation expectations
Source: ECB
NEWS
US/CHINA (BBG): Chinese Tech Firms Eye US Listings Despite Widespread Ructions
Beijing Smart Walnut Education Technology Co., a provider of services that help children learn to code, is one of several Chinese firms considering initial public offerings in the US despite market turmoil and friction between Washington and Beijing, according to people familiar with the matter. Walnut Coding, as Beijing Smart Walnut Education Technology is known, could seek to raise about $100 million in a US listing, the people said, asking not to be identified because the deliberations are private.
US/JAPAN (BBG): Japan’s Kato Aims to Further FX Dialogue With Bessent This Week
Japan’s Minister of Finance Katsunobu Kato said he aims to build on close discussions pertaining to currencies when he meets his US counterpart Scott Bessent in Washington this week. “Treasury Secretary Bessent and I are in close contact on currencies, and I would like to take this opportunity to hold further discussions during my visit,” Kato said Tuesday at a press conference. Kato was scheduled to depart later in the day for Washington, where he’ll represent Japan at a series of meetings including Group of 20 and International Monetary Fund gatherings. He said the timing for a meeting with Bessent is still under discussion.
US/INDIA (BBG): US Says Major Trade Progress Made With India During Vance Visit
The US said it’s made “significant progress” toward a bilateral trade deal following talks between Vice President JD Vance and Indian Prime Minister Narendra Modi on Monday, laying down a roadmap for further discussions that New Delhi hopes may shield it from additional tariff hikes. The two sides have finalized the terms of reference for negotiations on “a new and modern trade agreement,” the White House said in a statement during Vance’s four-day visit to India.
EU (MNI): VdL - Countries 'Lining Up' to Work w/EU Amid Global Uncertainty
European Commission President Ursula von der Leyen has claimed that countries from around the world are "lining up" to work with the EU on reaching trade agreements amid significant geopolitical and economic uncertainty, reports Politico. VdL says "In a more and more unpredictable global environment, countries are lining up to work with us," and having met with leaders from Iceland, New Zealand, Malaysia, the Philippines, Canada, India and the United Arab Emirates, many are looking for a "reliable partner" according to the Commission president.
BOE (MNI): Greene No Longer Uses “Cautious” to Describe Her Forward Looking View
Perhaps the most significant thing that we heard from Megan Greene in her Bloomberg TV interview today was what she didn't say. She said that over the past eight months she had been more on the "cautious" side of the cutting cycle. But she didn't use either of the recent MPC buzzwords ("careful", "cautious" or "gradual") when describing her view going forward. She said that she thought there were risks on both sides but that "the tariffs actually represent more of a dis inflationary risk than an inflationary risk, though, and so we'll have to see how that develops going forward." She was very careful not to pre-commit to anything other than noting that investors saw the neutral rate between 3.25-3.50% "I don't think that's totally unreasonable."
BOJ (BBG): BOJ Is Said to See Little Need to Change Basic Rate Hike Stance
Bank of Japan officials see little need to change their existing stance of gradually raising interest rates for now despite uncertainties stemming from US tariffs, according to people familiar with the matter. The BOJ officials see the Trump administration’s tariff campaign and retaliatory actions against the US as likely to weaken Japan’s economy and possibly delaying progress toward the bank’s price target, the people said. But for now, their overall economic projections remain largely intact as they wait for more data to analyze the impact of US tariffs, the people added.
JAPAN/CHINA (BBG): Ishiba Pens Letter to Xi as Japan Aims to Avoid Trade Crossfire
A high-level Japanese delegation will deliver a letter from Prime Minister Shigeru Ishiba to Chinese leader Xi Jinping this week, as Tokyo strives to avoid getting caught in the crossfire of escalating trade friction between China and the US. Tetsuo Saito, the chief of the ruling party’s junior coalition partner Komeito, will deliver the letter during a three-day visit from Tuesday to meet with Liu Jianchao, the head of the International Department of the Chinese Communist Party, among other dignitaries.
JAPAN (FT): Japanese Investors Sold $20bn of Foreign Debt as Trump Tariffs Shook Markets
Japanese investors offloaded more than $20bn in international bonds as Donald Trump’s tariffs shook markets early this month, in a sign of how the Wall Street turbulence cascaded around the world. Private institutions, including banks and pension funds, sold $17.5bn of long-dated foreign bonds in the week to April 4 and another $3.6bn over the next seven days, according to preliminary data from Japan’s Ministry of Finance.
CHINA (MNI INTERVIEW): China Crude Imports Set to Fall Under Tariffs
MNI discusses the outlook for China's crude oil consumption -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
AUSTRALIA (MNI): 3rd Leaders' Debate, Early Voting Underway
Early and mobile voting are now underway ahead of the 3 May federal election. Opinion polling showa PM Anthony Albanese's centre-left Australian Labor Party (ALP) in an increasingly-strong position, with a growing advantage in the two-party-preferred-vote and ahead of the centre-right Liberal/National coalition in a primary vote poll for the first time since Oct 2023. The third leaders' debate between Albanese and Coalition leader Peter Dutton gets underway on the Nine Network. In the 2022 federal election, 36.9% of all ballots cast were done so in the early voting period, while 14.3% were postal ballots, resulting in less than half the total number of votes being cast on election day.
DATA
ECB DATA (MNI): Professional Forecasters Inflation Outlook Higher
Economists and analysts across the euro area have modestly upped their inflation forecasts for both 2025 and 2026, although the outlook for 2027 and longer-term remain unchanged, the ECB's Survey of Professional Forecasters (SPF) showed on Tuesday. Core inflation expectations, as measured by the HICP excluding energy and food (HICPX), were revised up slightly for all horizons, the survey, closely watched by the Governing Council, showed. Headline inflation was expected to decline from 2.4% in 2024 to 2.2% in 2025 and 2.0% in 2026 and 2027, but these expectations represented a 0.1 percentage point upward revision for 2025 and 2026. Longer-term HICP inflation expectations (for 2029) were unchanged at 2.0%.
SWEDEN DATA (MNI): LFS Data Volatile, But Suggests Labour Market Should Strengthen Ahead
- SWEDEN MAR UNEMPLOYMENT 8.5%
Overall, the LFS and PES (released last week) data suggests the Swedish labour market has passed its weakest point, and should start to strengthen alongside the broader economy through the rest of 2025 - assuming past (and potentially future) rate cuts and increased fiscal spending can offset some of the negative direct and indirect impact of US tariffs. The Swedish monthly LFS survey is a volatile release, meaning more emphasis should be placed on trends (e.g. 3mma's) rather than single-month figures. In March, the seasonally adjusted unemployment rate fell 8 tenths to 8.1%, the largest one-month fall since July 2023.
RATINGS: S&P Upgraded Greece on Friday, Italy Affirmed at DBRS
Sovereign rating reviews of note from after hours on Friday include:
- S&P upgraded Greece to BBB; Outlook Stable
- Morningstar DBRS confirmed Italy at BBB (high), Positive Trend
FOREX: USD/JPY Cracks Y140 Support in Latest USD Leg Lower
- The EUR is among the poorest performing currencies early Monday as markets continue to consider the sharp FX moves seen across holiday-thinned Monday trade. EUR/USD has edged back below the $1.1500 handle, but remains well within range of the weekly - and cycle - highs of 1.1573 posted yesterday. The moves prompted spot to break some notable trendlines on top of important pivot resistance level at 1.1495.
- US equity futures are holding the bulk of the Monday losses, pointing to only a marginally higher open on Wall Street later today. As such, the JPY is firmer against all others in G10, having broken through Y140 support in Asia-Pac trade.
- EUR/GBP's squeeze higher appears to have concluded, with the cross consolidating either side of the 0.8600 level. BoE's Greene speaking this morning appeared to drop her guidance of "cautious" in her approach to interest rates, which may firm expectations for 3 x 25bps rate cuts this year.
- The next leg of the USD trade will likely be contingent on the FOMC's stance on policy in the face of Presidential calls for rate cuts. As such, much focus will likely be paid to Fedspeak this week after the US President stepped up his critique of Fed chair Powell over the extended weekend.
- This week sees over 10 separate Fed speaker events before the media blackout period kicks in at the close on Friday. Market will be carefully watching for any firm pushback against the President's messaging on interest rates, in which Trump called for a swifter return to policy easing.
EGBS: Thursday’s High Contains Bund Futures for Now
Thursday’s high of 131.83 has contained upside in Bund futures so far this morning, shielding the April 7 high and bull trigger at 132.03. The contract is +10 at 131.81, having now fully recovered from the sharp German fiscal announcement-induced selloff in early March, with tariff-related growth risks driving dovish ECB repricing in the weeks since.
- There wasn’t much reaction to yesterday’s weakness in US Treasuries, which was largely in response to US President Trump’s continued threats against Fed Chair Powell’s position.
- The German curve has bull steepened, with 2-year yields down ~2.5bps despite 5bln of the new 1.70% Jun-27 Schatz on offer at 1030BST.
- No tangible outperformance in 10-year GGBs to S&P’s rating upgrade (to BBB; Outlook Stable) on Friday after hours (spread unch today at ~87.5bps), with Greece’s improving fiscal trajectory already well documented.
- ECB’s Rehn re-iterated that US tariffs may have a negative impact on Eurozone inflation in the short-term, albeit with conflicting impacts in the medium term.
- The ECB’s Q2 Survey of Professional Forecasters was conducted between April 1-4th, so is already quite stale given the latest US tariff developments.
- Flash April consumer confidence is due at 1500BST today, with ECB President Lagarde also set to speak with CNBC at that time. We don't expect much deviation from Lagarde compared to last Thursday's dovish press conference.
GILTS: Steepening Develops Further, 5s30s Pierce Cycle Closing Highs
Gilts twist steepen, with cues from Tsys driving much of the price action. U.S. policy uncertainty continues to dominate newswires.
- Futures 92.20 last (91.96-40 range).
- Initial support and resistance unchanged at 91.73/92.63.
- Yields 3bp lower to 6bp higher, curve twist steepens.
- Long end yields still 20-30bp off April closing highs.
- 2s10s ~9bp below closing cycle highs, last 69.7bp.
- 5s30s testing cycle closing highs, last 135.7bp. If we break higher, there is little resistance to note until 150bp.
- Risks seem titled towards continued steepening given the UK’s economic and fiscal fragility, while the macro environment adds further weight to that view.
- BoE-dated OIS shows 89bp of cuts through year-end after briefly printing ~91bp this morning.
- BoE MPC member Greene didn't use any of the recent MPC buzzwords ("careful", "cautious" or "gradual") when describing her forward-looking view in an interview with BBG TV, perhaps signalling a move away from her traditional position at the hawkish end of the MPC spectrum. Markets looked through this given the recent dovish repricing.
- Post-holiday adjustments and macro cues are set to remain at the fore today.
- Wednesday will see Brightmine wage data, PMIs and public finance data cross. The DMO will provide an updated DMO remit revision in the wake of the latter. We will provide greater colour on this later today.
- BoE-speak from Bailey, Pill & Breeden is also scheduled for Wednesday.
EQUITIES: Eurostoxx 50 Futures Remain Contained Within Last Week's Range
Eurostoxx 50 futures continue to trade above their recent lows. The latest bounce highlights a corrective cycle and this is allowing an unwinding of the recent oversold trend condition. Resistance levels to watch are 4978.63, the 20-day EMA, and 5113.20, the 50-day EMA. Key support and the bear trigger has been defined at 4444.00, the Apr 7 low. A break of this level would confirm a resumption of the downtrend. A reversal higher in S&P E-Minis on Apr 9 highlighted the start of a correction. The trend condition has been oversold following recent weakness and gains have allowed this to unwind. The contract remains below important resistance points and the trend condition is bearish. The latest move down signals the end of the corrective cycle. Sights are on 4832.00, the Apr 7 low and bear trigger. Initial resistance to watch is 5437.24, the 20-day EMA.
- Japan's NIKKEI closed lower by 59.32 pts or -0.17% at 34220.6 and the TOPIX ended 3.19 pts higher or +0.13% at 2532.12.
- Elsewhere, in China the SHANGHAI closed higher by 8.323 pts or +0.25% at 3299.757 and the HANG SENG ended 167.18 pts higher or +0.78% at 21562.32.
- Across Europe, Germany's DAX trades lower by 72.32 pts or -0.34% at 21136, FTSE 100 higher by 17.73 pts or +0.21% at 8293.69, CAC 40 down 39.22 pts or -0.54% at 7246.64 and Euro Stoxx 50 down 23.44 pts or -0.47% at 4911.9.
- Dow Jones mini up 340 pts or +0.89% at 38668, S&P 500 mini up 53 pts or +1.02% at 5237.75, NASDAQ mini up 193.25 pts or +1.08% at 18114.25.
Time: 09:55 BST
COMMODITIES: Gold Hits New Record High Above $3500 Mark
A bearish theme in WTI futures remains intact and the recovery since Apr 9 is - for now - considered corrective. The move higher is allowing an oversold trend condition to unwind. Recent weakness has resulted in the breach of a number of important support levels, reinforcing a bearish threat. A resumption of the bear cycle would open $53.72, a Fibonacci projection. Initial firm resistance is seen at $64.49, the Mar 5 low and a recent breakout level. The trend needle in Gold continues to point north and this week’s fresh cycle highs confirm a resumption of the primary uptrend. The yellow metal has traded to another fresh all-time high. Note too that moving average studies are unchanged, they remain in a bull-mode position highlighting a dominant uptrend. The next objective is $3499.0, a Fibonacci projection. Initial firm support lies at 3163.5, the 20-day EMA.
- WTI Crude up $0.97 or +1.54% at $64.05
- Natural Gas up $0.02 or +0.73% at $3.038
- Gold spot up $25.06 or +0.73% at $3449.28
- Copper up $2.15 or +0.45% at $480.3
- Silver down $0.31 or -0.94% at $32.376
- Platinum up $5.03 or +0.52% at $971.03
Time: 09:55 BST
| Date | GMT/Local | Impact | Country | Event |
| 22/04/2025 | 1230/0830 | * |  CA | Industrial Product and Raw Material Price Index |
| 22/04/2025 | 1230/0830 | ** |  US | Philadelphia Fed Nonmanufacturing Index |
| 22/04/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 22/04/2025 | 1300/0900 | US | Fed Vice Chair Philip Jefferson | |
| 22/04/2025 | 1330/0930 | US | Philly Fed's Pat Harker | |
| 22/04/2025 | 1400/1000 | ** | US | Richmond Fed Survey |
| 22/04/2025 | 1400/1600 | ** |  EU | Consumer Confidence Indicator (p) |
| 22/04/2025 | 1700/1900 | EU | ECB's De Guindos at MIT/ICADE Finance Club | |
| 22/04/2025 | 1700/1300 | * | US | US Treasury Auction Result for 2 Year Note |
| 22/04/2025 | 1740/1340 | US | Minneapolis Fed's Neel Kashkari | |
| 22/04/2025 | 1830/1430 | US | Richmond Fed's Tom Barkin | |
| 22/04/2025 | 2200/1800 | US | Fed Governor Adriana Kugler | |
| 23/04/2025 | 2300/0900 | *** |  AU | Judo Bank Flash Australia PMI |
| 23/04/2025 | 2301/0001 | * |  GB | Brightmine pay deals for whole economy |
| 23/04/2025 | 0030/0930 | ** |  JP | Jibun Bank Flash Japan PMI |
| 23/04/2025 | 0600/0700 | *** | GB | Public Sector Finances |
| 23/04/2025 | 0630/0730 | GB | DMO remit revision following FY24/25 CGNCR | |
| 23/04/2025 | 0715/0915 | ** |  FR | S&P Global Services PMI (p) |
| 23/04/2025 | 0715/0915 | ** | FR | S&P Global Manufacturing PMI (p) |
| 23/04/2025 | 0730/0930 | ** |  DE | S&P Global Services PMI (p) |
| 23/04/2025 | 0730/0930 | ** | DE | S&P Global Manufacturing PMI (p) |
| 23/04/2025 | 0800/1000 | ** | EU | S&P Global Services PMI (p) |
| 23/04/2025 | 0800/1000 | ** | EU | S&P Global Manufacturing PMI (p) |
| 23/04/2025 | 0800/1000 | ** | EU | S&P Global Composite PMI (p) |
| 23/04/2025 | 0800/1000 | EU | ECB Wage Tracker | |
| 23/04/2025 | 0830/0930 | *** | GB | S&P Global Manufacturing PMI flash |
| 23/04/2025 | 0830/0930 | *** | GB | S&P Global Services PMI flash |
| 23/04/2025 | 0830/0930 | *** | GB | S&P Global Composite PMI flash |
| 23/04/2025 | 0900/1100 | ** | EU | Construction Production |
| 23/04/2025 | 0900/1100 | * | EU | Trade Balance |
| 23/04/2025 | 1030/1130 | GB | BOE's Pill speech at University of Leeds | |
| 23/04/2025 | 1100/0700 | ** | US | MBA Weekly Applications Index |
| 23/04/2025 | 1300/0900 | US | Chicago Fed's Austan Goolsbee | |
| 23/04/2025 | 1330/0930 | US | St. Louis Fed's Alberto Musalem | |
| 23/04/2025 | 1330/0930 | US | Fed Governor Christopher Waller | |
| 23/04/2025 | 1345/0945 | *** | US | S&P Global Manufacturing Index (Flash) |
| 23/04/2025 | 1345/0945 | *** | US | S&P Global Services Index (flash) |
| 23/04/2025 | 1400/1000 | *** | US | New Home Sales |
| 23/04/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 23/04/2025 | 1530/1130 | ** | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 23/04/2025 | 1700/1300 | * | US | US Treasury Auction Result for 5 Year Note |
| 23/04/2025 | 1715/1815 | GB | BOE's Bailey at Institute of International Finance | |
| 23/04/2025 | 1800/1400 | US | Fed Beige Book | |
| 23/04/2025 | 1800/1900 | GB | BOE's Breeden on Monetary Policy and Financial Stability | |
| 23/04/2025 | 1915/2115 | EU | ECB's Lane in panel on Central Bankers' Dilemmas Amid Changing Liquidity | |
| 23/04/2025 | 1945/2145 | EU | ECB's Cipollone in panel on Tokenization and the Financial System | |
| 23/04/2025 | 2230/1830 | US | Cleveland Fed's Beth Hammack |
