Market Drivers & Key Themes
Central Bank Watch
Investor focus remains locked on central bank policy, with the U.S. Federal Reserve holding rates steady in the 4.25%–4.50% range amid lingering inflation concerns. Fed Chair Jerome Powell cautioned that inflation may ease more slowly than anticipated, especially in the wake of newly imposed trade tariffs. Markets are now pricing in a 70% chance of a rate cut in June, up from 57% pre-announcement.
In Europe, the ECB is edging toward further monetary easing. A growing number of policymakers support another rate cut in April, citing slowing wage growth, declining core inflation, and weaker economic activity. Market participants now expect the ECB to lean dovish in upcoming meetings.
Escalating Trade Tensions
President Donald Trump has reignited the trade war by announcing a 10% baseline tariff on all imports, with heavier duties targeting key trading partners. This two-step approach begins April 5, with additional levies to follow on April 9. The aggressive policy shift has sparked global concern over supply chain disruptions, rising inflation, and possible retaliatory tariffs from other nations.
With markets unsure whether this is a strategic negotiation tactic or a long-term shift in U.S. trade policy, volatility remains elevated. Investors have sought shelter in safe-haven assets, notably gold, which continues to trade near all-time highs.
Geopolitical Spotlight
- Russia-Ukraine Talks: Ceasefire discussions remain in progress, and any breakthroughs could reshape global energy supply expectations.
- OPEC+ Strategy: The alliance announced deeper cuts from seven member nations to address previous overproduction. These efforts are set to counterbalance a planned modest output hike of 138,000 barrels/day starting April.
Meanwhile, U.S.–Iran tensions are flaring once again. The Trump administration’s renewed “maximum pressure” campaign has introduced fresh sanctions aimed at curbing Iran’s oil exports. Despite the threat of diplomatic fallout, Iran remains cautious and skeptical following the U.S. withdrawal from the 2015 nuclear deal.
Gold Market Outlook
Gold continues to be a favored asset amid economic and geopolitical uncertainty. Its strong performance has been supported by central bank buying, de-dollarization efforts by emerging markets, and expectations of lower global interest rates. The metal’s momentum may slow if inflation moderates or if the Fed surprises with a hawkish shift. However, unless those headwinds materialize, gold remains poised for further gains.
Technical Outlook: Gold
Gold has gained over 20% year-to-date, maintaining a powerful uptrend supported by a rising trendline. Recent dips toward the $3,000 level have been met with strong buying interest. If the price breaks above $3,100, the next key resistance lies at $3,300. Support remains firm at the 30-day moving average, which aligns closely with this psychological level.
EUR/USD Forecast
The euro remains under modest pressure, with rising speculation that the ECB will cut rates again in April. Policymakers like Stournaras and Cipollone have voiced support for easing, citing declining service-sector inflation, sluggish wage growth, and reduced borrowing costs as justifications.
Technical Outlook: EUR/USD
After briefly testing resistance around 1.0940, the pair is retracing toward support at the 30-SMA (1.0700). A rebound from this level could reignite bullish momentum toward 1.0950 and potentially 1.1200. Failure to hold the moving average, however, may signal a deeper correction.
WTI Crude Oil Outlook
Oil markets are weighing geopolitical risks against supply dynamics. Talks between Russia and Ukraine have led to speculation that Russian oil could return to market, while U.S. sanctions on Iran complicate the global crude outlook.
OPEC+ remains committed to stabilizing prices, with ongoing cuts offsetting incremental increases. Since 2022, the group has pulled 5.85 million barrels/day offline, nearly 5.7% of global supply.
Technical Outlook: WTI
WTI remains in a bearish pattern below $80.70. After dipping to $65.20, a modest recovery is underway. A breakout above $73.00 could clear the path back to $80.70, but if downside resumes, a retest of $65.20 — or even $60.00 — is likely.
S&P 500 Market Outlook
U.S. equities, particularly the S&P 500, have come under pressure amid Trump’s new tariff agenda. Investors are digesting the two-stage “Liberation Day” policy, which starts with a flat 10% import tax followed by targeted hikes. The strategy, while aimed at domestic revival, has sparked fears of renewed trade conflicts and inflation.
If the Fed reacts with tighter policy to counter inflation, it could create more headwinds for corporate margins and dampen growth. While some believe tariffs may be used as a negotiation tool, others fear a prolonged conflict.
Technical Outlook: S&P 500
The index has broken below its upward trend channel and failed to reclaim the 5,800 level. The rejection at 6,150 formed a double-top, confirming selling pressure. The short-term outlook remains weak, with 5,150 as the next key support if bearish sentiment persists.
Key Economic Dates to Watch – April 2025
- Date Event
- April 4 (Fri) U.S. Nonfarm Payrolls
- April 9 (Wed) RBNZ Rate Decision & FOMC Meeting Minutes
- April 10 (Thu) U.S. Consumer Price Index (CPI)
- April 15 (Tue) Canada Core CPI
- April 16 (Wed) UK CPI & BoC Rate Decision
- April 17 (Thu) ECB Monetary Policy Statement
- April 30 (Wed) U.S. Gross Domestic Product (GDP)
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