Weekly Outlook | Tariffs, recession and a bloodbath in equities 

Important events this week: 

Trumps’ announcement of adding reciprocal tariffs caused financial markets to reply with a sharp selloff. As rising prices will add more burden to the US economy the activity is expected to cause a slowdown and potentially even a recession. In particular tech companies, which derive their income globally have been sold sharply. Recent analyses come to the point that the cost to produce an iPhone would rise from USD 549 to USD 846, which marks an increase of more than 50%. 

The sharp selloff in the equity sector also took a turn on the AUDUSD currency pair. The price only started to fall on Friday last week but might hence indicate that more downside momentum might be on the cards. 

– NZ- RBNZ interest rate decision– It is expected that the RBNZ will cut interest rates by 25 basis points this week. The move in itself might not harm the Kiwi much, however as the current trend has been negative more downside momentum might occur.  

NZDUSD, weekly chart 

AS the weekly chart above shows, in particular the technical support zone at 0.5555 should now be in focus. If that areas breaks, more falling prices might occur. Negative news from New Zealand should not positively impact the Dollar, however, the Greenback might gear up steam as the Reserve currency in times of turmoil. The rate decision will be held on Wednesday, April 09 at 04:00 CET. 

– US- Meeting Minutes– The meeting minutes of the recent Fed meeting might offer further insights into the process of the Federal Reserve. Currently two rate cuts have been priced in so far this year, whereas recent developments might also call the Fed towards emergency cuts in the near future.  

EURUSD, weekly chart 

The weekly chart of the EURUSD currency pair shows, that the psychological resistance pattern at 1.1000 seems to be strong importance for now. Initial weakness of the Dollar was seen, yet the market has not been able to trade beyond the zone at 1.1100. Below the 1.0900 zone the market might turn interesting again. Should prices fall, a break of the 1.0800 area might quickly escalate fresh losses, here. The Minutes will be released on Wednesday, April 09 at 20:00 CET. 

– US Consumer prices index– Recent statements from the US administration, together with worries from corporate leaders might indicate that prices are expected to rise in the US in the near future. The PCE index also showed fresh upside momentum and the same might be the case for the consumer price index. 

S&P 500 index, weekly chart 

The S&P 500 index might hence continue with the negative price momentum. Rising prices would cause the Fed to rather remain tight with their monetary policy and furthermore could escalate the negative market sentiment. A break of the zone at 4,950 could intensify the bearish move. The index will be released on Thursday April 10 at 14:30 CET.