Japan's economy faces downward risks, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on April 11

Global Market Review

1. European and American market trends

The three major stock index futures rose, with Dow futures mainly blue-chip stocks rising by 0.45%; S&P 500 futures rising by 0.60%; and Nasdaq 100 futures mainly technology stocks rising by 0.67%. European stocks fell, with the German DAX index falling 1.16%; the French CAC40 index falling 0.35%; and the UK FTSE 100 index rising 0.55%.

2. Market news interpretation

Japanese Prime Minister Shigeru Ishiba will talk to the trade union chairman on wages

Japanese Prime Minister Shigeru Ishiba will hold talks with the head of Japan's largest trade union organization on Monday, promising to take measures to achieve wage increases in small and medium-sized enterprises and local areas. The Japanese government announced on Friday that the planned face-to-face meeting will be the first meeting between the Japanese Prime Minister and the leaders of the Japan Federation of Trade Unions in 16 years. The last meeting came a year after the global financial crisis broke out. More and more people are worried that raising tariffs in the United States will drag down Japanese xm-links.companies' performance and weaken domestic wage growth.

Hungarian Central Bank Deputy Governor appointment hearing is about to be held

①On April 11, 2025, the Hungarian Parliament will hold a hearing on the appointment of the central bank Deputy Governor of Zoltan Kurali, former head of the government debt agency. ② Prime Minister Viktor Orban's former Finance Minister Mihaly Varga took over as central bank governor last month, when Hungary's economic growth and inflation outlook were at risk and the 2026 parliamentary election was imminent. ③ Hungarian central bank maintains benchmarks at Varga's first policy meeting last monthInterest rates remain unchanged at the EU's highest level of 6.5%, and the possibility of interest rate cuts is ruled out for the foreseeable future as inflation is recovering. ④ Earlier this week, the central bank said President Trump's tariffs could reduce Hungary's economic growth by 0.5 to 0.6 percentage points, which would undermine Hungary's recovery prospects after two years of nearly stagnation and inflation soared to EU highest levels. ⑤ Economist Kurali has held management and senior investment banking positions in several xm-links.commercial banks and investment banks including Citigroup and Deutsche Bank, and took over government debt agency AKK in 2019. ⑥ The six-year term of office of Mihaly Patai, deputy governor of the central bank, will expire this month, while the six-year term of office of Csaba Kandracs will expire in October. ⑦ Given Orban's majority in parliament, Kurali's appointment is expected to be just a formality. If appointed, Kurali may attend the first policy meeting on April 29. ⑧ After the central bank unanimously decided to keep the benchmark interest rate unchanged last month, it raised its inflation forecast for 2025 to 4.5%-5.1%, and said that increased tariffs and strong rise in service and food prices pose an upside risk to the forecast.

The U.S. Secretary of Energy makes tough remarks on Iran's oil exports

① On April 11, 2025, the U.S. Secretary of Energy said that the United States can track tankers from Iran, know where they are going, and has the ability to block Iran's oil exports. ② He declined to disclose specific ways to block Iran's oil exports, but emphasized that the United States can put pressure on Iran "all-round". ③ The U.S. Secretary of Energy also said that Gulf allies are extremely concerned about Iran's nuclear program and, like the United States, believes that Iran's nuclear capabilities is a "result no one wants to see."

Japan established a task force to deal with tariff issues

①On April 11, 2025, the Japanese government established an inter-departmental task force to manage the response to US tariffs. ②The working group was established at the second meeting of the U.S. xm-links.comprehensive Response Headquarters for the United States Tariff Measures held by the Prime Minister's Office. ③ Japanese Prime Minister Shigeru Ishiba at the meeting instructed all cabinet ministers to support domestic industries and take other relevant measures. ④ Shigeru Ishiba plans to send Economy Minister Ryomasa Akazawa to the United States as soon as next week as the chief negotiator of Japan and the United States government. ⑤ Ryomasa Akasawa's mission is to discuss the assessment of US tariffs with US Treasury Secretary Bescent and other US officials.

The UK National Statistics Office suspends the release of key price data

① On April 11, the UK National Statistics Office announced the extension of the period for the release of key price data due to problems in its calculation method. ② The agency said in a statement that it will continue to suspend the issuance of these indices after suspending the release of the Producer Price Index (PPI) and Service Producer Price Index (SPPI) last month. ③The Bureau of Statistics said that in the short term, detailed price deflators will be given priority, which are necessary to calculate important economic statistics. ④Monthly PPI and quarterly SPPI dataThe release is expected to resume in the summer, and these data are used to calculate industrial inflation and warning consumers of price pressure. ⑤The Bureau of Statistics found in March that there were problems with the month-on-month method used to calculate these indexes, which affected the data since 2008, may distort the economic growth data in 2022 and 2023, and national trade data may also be affected.

The ECB should take more aggressive rate cuts

① On April 11, 2025, President Trump's tariff policy uncertainty provided the ECB with clear reasons for the rate cut. Although Trump has delayed the full implementation of some "reciprocal tariffs", Europe still faces tariffs of 10% of exports to the United States, and the threat of a global economic slowdown remains. ② European Central Bank President Lagarde had been cautious about the rate cut on April 17, but Trump's tariff policy made most analysts expect the central bank to cut interest rates by 25 basis points. However, the severity of the trade shock actually requires the central bank to take more aggressive rate cuts, which should reach 50 basis points. ③Before the tariff policy, the European Central Bank had expected the eurozone to grow only 0.9% this year. Nomura Securities estimates that Trump's 10% tariff on EU exports could reduce GDP growth by one third, or 0.3 percentage points. This has not taken into account the ongoing uncertainty brought about by Trump's policy, which may lead investors and businesses to delay decision-making. ④On the other hand, concerns about tariffs causing a surge in inflation have been exaggerated. Inflation can only rise when the EU takes strong retaliation measures, but so far, Europe's response has been relatively modest. In addition, China, which is still facing high Trump tariffs, may dump cheap goods into Europe, thereby pushing down prices. ⑤The European Central Bank also needs to consider the strength of the euro. The euro has risen 10% against the dollar since Trump took office, and concerns from global investors about the U.S. economy may persist. This makes imported goods cheaper and further reduces inflationary pressure. ⑥ Although the ECB has lowered interest rates by 1.5 percentage points since June last year, it is still fighting inflation through quantitative tightening. The balance of bond portfolio acquired in the quantitative easing program from 2014 to 2022 is currently 2.7 trillion euros, and the central bank has been steadily reducing this scale. According to the central bank's estimates, the bond portfolio has decreased by €500 billion, which is equivalent to a €75 billion reduction in bank loans. ⑦ The central bank expects inflation to be 1.9% next year, and the current key interest rate of 2.5% seems too high. Even if interest rates drop to 2%, quantitative tightening will still help curb inflation. With clear risks of global recession, the ECB can step up its interest rate cuts.

The Japanese economy faces downward risks. The automobile industry has been hit hardest.

The Japanese economy is generally uneasy due to the "reciprocal tariff" policy of the Trump administration in the United States. Financial institutionsIt lowered Japan's economic growth expectations this year, with Mizuho Securities and Yamato Institute expecting the reduction to be 0.2 and 0.4 percentage points respectively. As the pillar of Japan's economy, the automobile manufacturing industry accounts for 50% of the manufacturing industry and provides more than 5 million jobs. It will suffer a huge blow due to tariffs. Nomura xm-links.comprehensive Research Institute analyzed that a 25% increase in U.S. automobile tariffs will reduce Japan's GDP by at least 0.2%. Political parties call on the government to take tougher measures to deal with US tariff policies, while Japanese media criticize US tariff policies for pushing up global trade risks, and the Japanese government should clearly express opposition and file a lawsuit.

UK GDP in February rose 0.5% from the previous month, while Reuters survey estimated growth of 0.1%

Data released by the UK's National Statistics Office on Friday showed that the UK economy grew 0.5% from the previous month, far higher than the 0.1% expected by economists in the Reuters survey. The UK economy grew by only 1.1% last year. Last month, government budget forecasters cut their 2025 growth forecast to halve to 1%, although they believe that economic growth will reach 1.9% in 2026. However, these predictions have been questioned by President Donald Trump’s full imposition of tariffs. Even before the announcement of new tariffs, the economies in the UK and other European countries had slowed due to concerns about U.S. trade policy. British businesses also said they are reducing their hiring and investment plans as employer taxes and minimum wages are significantly higher in effect this month. However, there are some signs that weak consumer spending has begun to rebound as wage growth continues to outperform inflation, and retail sales in February exceeded economists’ expectations.

3. Trends of major currency pairs in the New York Stock Exchange before the market

Euro/USD: As of 20:18 Beijing time, the euro/USD rose, now at 1.1343, an increase of 1.28%. Before the New York Stock Exchange, the euro-dollar price continued to rise in recent intraday trading, amid the dominance of major uptrends. Although negative signals appear on the Relative Strength Index (RSI) indicator after reaching a highly overbought level, the pair's recent rise highlights the strength of this positive trend.

GBP/USD: As of 20:18 Beijing time, GBP/USD rose, now at 1.3105, an increase of 1.06%. Before New York, GBPUSD rose in recent intraday trading after it surpassed the negative pressure on the EMA50 in yesterday's trading. This is dominated by the main bullish trend, with the recent rise driving the price to attack the current resistance at 1.3010.

Spot gold: As of 20:18 Beijing time, spot gold rose, now at 3216.76, an increase of 1.31%. Before the New York City market,Gold resumed upward movement in recent intraday trading after attempting to collect its earnings in earlier movements and cleared the overbought state indicated by the Relative Strength Index (RSI). However, the upward track returns hit a new high.

Spot silver: As of 20:18 Beijing time, spot silver rose, now at 31.455, an increase of 0.85%. Before the New York Stock Exchange, silver prices rose in recent intraday trading, mainly by bull correction waves and trading along trend lines. To reach the EMA50 resistance, this puts it under negative pressure and limits its gains.

Crude oil market: As of 20:18 Beijing time, U.S. oil rose, now at 60.130, an increase of 0.12%. Before New York, crude oil prices fell in recent intraday trading, erasing all gains from earlier in the day, supported by positive signals from the Relative Strength Index (RSI). The decline continued until the price tested a short-term downtrend line, which forced a new downward rebound.

4. Institutional view

Institutional: The ECB may cut interest rates to 1.5% in September

SEB Research said that the ECB's interest rate cut may be greater than the current expectations of the money market, although this may require a significant deterioration in economic data. "We continue to expect the ECB to lower deposit facility interest rates below neutral levels to 1.50% in September," SEBResearch pointed out. "Seeking the ECB's views on the ECB have been consolidated recently around tariff events, but continuing continuous rate cuts will require support from data in the xm-links.coming months." According to data from the London Stock Exchange Group, the money market currently expects that the European Central Bank will stop cutting interest rates by October, when the terminal deposit interest rate level will reach 1.75%.

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