Magna Financial Market Report – Monday 7th April 2025
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• Trump stands firm on tariffs
• Markets begin the day with sharp declines
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RECAP
Friday saw heightened market anxiety as stock prices continued to decline, prompting investors to seek safer assets like the Japanese yen (JPY) and Swiss franc (CHF). In response to the growing volatility, the GBPAUD and GBPNZD currency pairs surged to their highest levels in a decade, signaling further market distress. Meanwhile, China weighed in with statements suggesting potential retaliation.
In the afternoon, Jerome Powell delivered a more hawkish address, expressing concern over inflation and interest rates. He noted that the tariffs were proving to be more impactful than initially anticipated, potentially leading to more persistent inflationary pressures. This marked a significant shift from his prior comments, where he had suggested that tariff-driven inflation would be temporary.
Additionally, Friday’s nonfarm payroll data surpassed expectations, although the unemployment rate edged up slightly to 4.2%.
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OUR SUMMARY
Today’s market opening reflects continued trends from Friday, with the Japanese yen (JPY) and Swiss franc (CHF) strengthening, while the Australian dollar (AUD) and New Zealand dollar (NZD) remain weaker. Despite Jerome Powell’s hawkish remarks on Friday, concerns over a looming recession have led markets to price in five potential rate cuts by the Federal Reserve this year. Meanwhile, the Trump administration stands firm on its tariff policies.
Looking ahead, key data points this week include U.S. inflation figures, with the Consumer Price Index (CPI) released on Thursday and the Producer Price Index (PPI) on Friday. These will provide the first insights into how tariffs on Canada, Mexico, and China are affecting inflation. A rise in PPI is likely, given its connection to commodity prices.
In Europe, the economic calendar is light, with February’s UK GDP data due on Friday. The economy is expected to show a modest 0.1% growth after a 0.1% contraction in January.
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HOW WE CAN HELP
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com
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