Europe's Opening Bell: Relief rally loses steam as Trump administrations u-turns raise concerns
Asian stocks ended their five-day winning streak as a short-lived global rally lost steam due to mixed messages from the Trump administration about China tariffs.
A regional stock index dropped 0.3% after Treasury Secretary Scott Bessent raised doubts about resolving the US-China trade war soon. Hong Kong’s stocks fell 1.2%, their first drop in four days, and US and European futures also slipped..
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Over the past week, President Trump criticized Fed Chair Jerome Powell but later backed off from asking for his resignation, leaving investors unsure about the future of tariffs on China despite numerous updates. A source told Reuters that the administration may lower tariffs on Chinese imports if talks with Beijing progress, following a Wall Street Journal report on the possibility.
However, Treasury Secretary Scott Bessent clarified that any tariff cuts would require agreements with China, a stance echoed by White House spokesperson Karoline Leavitt.
This constant flip-flopping from the White House is not inspiring any form of confidence at present and thus weighing on market sentiment once more.
The yen flipped after two days of losses and the dollar weakened. Gold jumped 1.2% in increased demand for the safe- haven asset as it trades around the $3325/oz handle heading into the European Open.
Currency Strength Chart, Strongest – Weakest: JPY, CHF, EUR, NZD, AUD, CAD, GBP, USD
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Source: FinancialJuice
U.S. futures gave up some of their earlier gains, with Nasdaq futures dropping 0.32% and S&P 500 futures falling 0.23%. EUROSTOXX 50 futures fluctuated before settling flat, while FTSE futures slipped 0.04%.
Oil prices leveled off after dropping in the US session, as sources said OPEC+ might speed up oil production increases in June.
Tariff developments will remain front and center heading into the European session with China’s Foreign Ministry Spokesperson Guo stating that China and the US are not in talks yet while stressing that respect is key for such talks to take place.
According to reports, the Trump administration could be looking to cut certain tariffs on the auto industry that carmakers say could badly hurt profits and jobs. Such a move could lead to improved sentiment and potentially another short-term relief rally.
Economic data releases
From a data standpoint, it’s a bit of a quieter one where European data is concerned with German Ifo the main data release.
From the UK we have the UK CBI data and some US earnings which will be released ahead of the US open and could have an impact on US futures and general sentiment as well.
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For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)
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Chart of the day – Gold (XAU/USD)
From a technical standpoint, Gold prices have seen wild swings this week rising to a high of 3500 before falling to a low yesterday of around 3259.
The selloff was largely down to improved sentiment and profit taking as well but it does appear that bulls have returned.
The confusion on the path forward in US-China relations has lead to renewed safe haven demand overnight which has seen Gold change structure to bullish on a four-hour timeframe.
Looking at the H4 chart below, and you can seen the rally in the Asian session to a high of around 3360 has seen a notable shift in structure.
A four-hour candle close below the 3277 handle will be needed for bears to take the upper hand once more. At present it appears as though a higher low has been printed with Gold possibly eyeing a fresh higher high beyond the 3360 handle.
All in all, Golds price action hints at further gains, but any mention of talks between the US and China could result in a complete change in market sentiment and send Gold lower once more.
Gold (XAU/USD) Four-Hour Chart, April 24, 2025
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Source: TradingView.com (click to enlarge)
Support
- 3300
- 3277
- 3259
Resistance
- 3360
- 3380
- 3400
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