Morning wrap (28.04.2025)

At the beginning of the new week, we observe modest movements on financial markets. On the Chinese market, changes in indices are limited to +/- 0.20%. The Japanese JP225 index loses 0.40%, AU200.cash records losses of 0.60%, and the Singaporean SG20cash loses 0.80%. American CFD contracts on indices are recording declines in the range of 0.50-0.80%, but these movements change little after Friday's strong increase.

Moves in the forex market are also light and for most pairs are limited to the range of +/- 0.15%.

U.S. Treasury Secretary Bessent explained that during talks with Chinese officials, the issue of tariffs was not raised. More importantly, he expressed doubts about Trump's claim of recent communication with President Xi.

Reports from Hong Kong indicate that Walmart has resumed orders from Chinese suppliers after trade disruptions. Many exporters independently confirmed such action. According to several companies, tariffs are being absorbed by buyers rather than sellers. The news suggests optimism regarding the possible lifting of tariffs.

Reuters reported that a consensus is forming within the ECB regarding a rate cut in June. Current market pricing points to a 71% chance of a cut. Six ECB sources indicated worsening data, a stronger euro, and falling oil prices as key factors. None of the policymakers are considering a larger cut of 50 basis points.

Trump suggested that an agreement between Ukraine and Russia is within reach, hinting that Ukraine could cede Crimea to Russia. His comments contradict earlier statements by Ukrainian leadership.

The Bank of Japan is expected to maintain interest rates at 0.5% during its meeting from April 30 to May 1. Rising risks stemming from U.S. tariffs could reduce Japan's GDP by 0.5%, delaying rate hikes at least until October. Concerns over tariffs are increasingly impacting monetary policy.

USDCAD is slightly losing ground ahead of the official results of today's federal elections in Canada. Weekend polls indicated a victory for the Liberal Party led by Mark Carney.

The trade war initiated by the U.S. has shifted Canadian voters' priorities toward sovereignty issues. Conservative leader Pierre Poilievre has struggled to leverage traditional topics such as housing and immigration. Currently, a liberal majority seems likely.

Over the weekend, Japan’s Deputy Finance Minister, Atsushi Mimura, sought to refute speculation that U.S. Treasury Secretary Bessent supports a stronger yen. As a result, no official intervention was confirmed.

Chinese ministries announced new initiatives aimed at supporting economic growth and employment, though without providing specific plans. The conference was chaired by the National Development and Reform Commission. Markets adopted a positive tone but remained skeptical due to the lack of details.

China's State Council approved the construction of 10 new nuclear reactors over the weekend. This marks the fourth consecutive year that at least 10 reactors have been approved. China now accounts for nearly half of all nuclear reactors under construction worldwide and is on track to surpass the U.S. as the world's largest nuclear energy producer by the end of the decade.