US: Trump-Musk Press Conference Underway Shortly
President Donald Trump is shortly due to hold a joint press conference with Elon Musk to mark the latter's departure from the White House per his scheduled secondment as the head of the Department of Government Efficiency. As with all Trump press conferences, there will be focus on Trump's unrelated market-moving comments to the press. LIVESTREAM
- Trump said on Truth Social: “This will be [Musk’s] last day, but not really, because he will, always, be with us, helping all the way. Elon is terrific!"
- NBC notes: “Musk can claim success in having cut some federal programs... But it’s a drop in the bucket. Even his DOGE website claims only $175 billion in savings — a far cry from his target of “at least $2 trillion.””
- Axios writes that the savings identified by DOGE “are at risk of being washed away by Trump's "One, Big Beautiful Bill." … [which] is projected to add $3 trillion to $5 trillion to budget deficits over the next 10 years. Even using Musk's most generous estimate, those DOGE savings would amount to just 6% of the bill's projected increase to the deficit.”
- Trump’s plan to overhaul the federal bureaucracy now falls to OMB Director Russell Vought, an architect of the Heritage Foundation’s Project 2025. A federal government worker told Politico: “Everyone’s more nervous about [Vought] than Elon actually, especially because he knows government a little bit better. While people are excited that Elon is gone, this doesn’t change much.”
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GBPUSD TECHS: Bullish Trend Structure
- RES 4: 1.3605 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 3: 1.3550 High Feb 24 ‘22
- RES 2: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 1: 1.3444 High Apr 28 / 29
- PRICE: 1.3337 @ 16:27 BST Apr 30
- SUP 1: 1.3280 Low Apr 28
- SUP 2: 1.3202 20-day EMA
- SUP 3: 1.3041/3002 Low Apr 14 / 50-day EMA
- SUP 4: 1.2807 Low Apr 10
The trend condition in GBPUSD remains bullish and Monday’s fresh cycle high reinforces current conditions. The move higher highlights a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Moving average studies are in a bull-mode position too, signalling a dominant uptrend. Sights are on 1.3510, a Fibonacci projection. Support to watch lies at 1.3202, the 20-day EMA.
BONDS: EGBs-GILTS CASH CLOSE: Bellies Outperform
European yields fell on a data-heavy Wednesday.
- After some initial overnight weakness, Bunds and Gilts largely looked through higher-than-expected Q1 Eurozone GDP and French and German state-level flash inflation.
- Core instruments would strengthen through the European morning session on weaker equities and oil prices which helped support global FI generally.
- Stronger-than-expected (or at least, less-weak-than-expected) US GDP and PCE inflation data saw core FI pull back sharply, but Bunds and Gilts would rally anew as equities tumbled on US growth fears.
- The German and UK curves leaned bull steeper on the day, with outperformance in the bellies. Periphery EGB spreads widened modestly, with GGBs underperforming.
- Following today's inflation releases, April Eurozone core HICP (Friday) is seen as having upside risks vs the 2.5% Y/Y estimate coming into the week.
- Thursday is a holiday (Labor Day) throughout much of Europe, though in the UK we get consumer credit / money supply / mortgage data, as well as final April Manufacturing PMI.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 5bps at 1.686%, 5-Yr is down 5.9bps at 1.985%, 10-Yr is down 5.3bps at 2.444%, and 30-Yr is down 4.5bps at 2.882%.
- UK: The 2-Yr yield is down 4bps at 3.803%, 5-Yr is down 4.1bps at 3.917%, 10-Yr is down 3.9bps at 4.441%, and 30-Yr is down 3.7bps at 5.207%.
- Italian BTP spread up 1bps at 112bps / Greek up 1.3bps at 85.5bps
EUROPEAN INFLATION: Germany Monthly Services Inflation Highest Since May-24
The Bundesbank’s estimate of seasonally-adjusted German CPI suggests April sequential services inflation momentum was the highest since May 2024. While that will have been pushed upwards from Easter Effect one-offs, and residual seasonality appears to persist in the SA time series, the print underscores that services inflation remains sticky in Germany.
- Services inflation accelerated to 0.43% M/M (sa) in April (vs 0.26% prior, 5.3% annualized), while manufactured goods ex-energy continued to run soft at 0.08% M/M SA (vs 0.25% prior, 1.0% annualized).
- This left sequential core CPI SA at 0.17% M/M (0.26% prior, 2.1% annualized).
- However, markets appear to be looking through this latest services strength. Dec-25 Euribor futures continue to trade not too far off dovish extremes seen mid-April, with around 66bp of easing priced through December.
It comes as a) core goods inflation is soft, and b) analyst and ECB expectations are increasingly expecting EZ headline inflation returning to target around end-2025 amid the firmer US tariff stance. US trade policy of course has tilted the ECB Governing Council's focus towards growth instead of inflation risks.
