Bitcoin Edges Lower on Tariff Worries, Weak China DataMarket Talk
0904 GMT - Bitcoin edges lower as U.S. tariff concerns and weak Chinese manufacturing data dampen risk appetite. Worries over U.S. tariffs are resurfacing after President Trump promoted his policies and warned "nothing will stop me" during an event marking his 100th day in office, Hargreaves Lansdown analyst Susannah Streeter says in a note. Trump has also renewed his criticism of Federal Reserve Chair Jerome Powell, which is "unsettling" given the independence of the central bank is seen as important for financial stability, she says. Meanwhile, worse-than-expected Chinese manufacturing data add to concerns about global growth prospects. Bitcoin falls 0.1% to $94,813, according to LSEG. ([email protected])0859 GMT - Taiwan's economic growth could remain strong on robust AI-related exports despite U.S. tariff concerns, says Gareth Leather, economist at Capital Economics. Taiwan's GDP growth picked up strongly in 1Q, topping market expectations. Semiconductor-specific tariffs threaten the island's export-reliant economy, but "we doubt the hit to Taiwan's economy from semiconductor tariffs would be huge, at least in the short term," he says. Given Taiwan's dominant position in the industry, U.S. importers would have few alternatives, the economist adds. Strong export demand should translate through to robust investment growth, he says, adding that with real wages now increasing, consumption growth should stage a turnaround soon. ([email protected])0838 GMT - The March 2028 gilt has declined to relatively cheap levels recently, which should ensure good demand for the bond at Wednesday's auction, due at 0900 GMT, RBC Capital Markets analysts say in a note. They broadly favor short-dated U.K. government bonds, or gilts, in the expectation that yields will fall as the Bank of England continues to cut interest rates. The yield on the March 2028 gilt is last at 3.815%, Tradeweb data show. ([email protected])0829 GMT - The Bank of Thailand could continue lowering its policy rate, given the poor prospects for the Thai economy, says Gareth Leather at Capital Economics. The BOT opted to cut rates earlier in a widely expected move as U.S. tariffs cloud the economic outlook. Growth slowed in 4Q 2024, and more recent data suggests that the weakness continued into this year, Leather writes. While Trump's 90-day pause on reciprocal tariffs offers Thailand some breathing room, the country will be hit hard if tariffs do proceed. The economy's weakness is also putting downward pressure on inflation, he says. Given the BOT's more dovish commentary and with downside risks to the economy building, Capital Economics now expects the policy rate to end the year at 1.25% versus 1.5% previously. ([email protected])0809 GMT - Gold futures slide as trade concerns ease and markets look for a fresh catalyst. Futures are down 0.5% at $3,315.10 a troy ounce. The stronger U.S. dollar and advancing Treasuries and equities, alongside growing hopes for easing U.S. tariffs, have weakened gold's safe-haven appeal for now. However, the recent slowdown in tariff news could be lulling the market into a false sense of security, Pepperstone's Michel Brown says in a note. The market is still experiencing inertia, as the 90-day pause on reciprocal U.S. tariffs continues, uncertainty remains high, and concrete progress towards longer-lasting trade deals remains elusive, Brown writes. Given the lack of fresh information, investors should still be selling both equities and the greenback and buying the dip in gold, which remains the only real safe-haven amid instability, Brown says. ([email protected])0756 GMT - The euro is little moved after French inflation and gross domestic product data and is unlikely to show much reaction to upcoming German and eurozone data, ING analyst Francesco Pesole says in a note. That's partly because first-quarter GDP figures show growth before President Trump announced reciprocal tariffs, he says. It would also take much softer-than-expected inflation data to prompt markets to price in more interest-rate cuts for the European Central Bank, he says. French GDP rose 0.1% in the first quarter and inflation held at 0.8% in April. German GDP and inflation data are due at 0800 GMT and 1200 GMT respectively. Eurozone GDP figures are at 0900 GMT. The euro trades flat at $1.1382. ([email protected])0752 GMT - China's economy is likely to sharply weaken as trade tensions continue, says UOB economist Ho Woei Chen in a commentary. The economist points out that China's latest economic data showed some clues, as manufacturing and non-manufacturing sectors lose steam in April amid the worsening trade war. Export orders slumped with frontloading activities scaling back sharply, she adds. UOB expects China's economic growth to slip to around 4.6% on-year in 2Q and to below 4% in 2H. It keeps its full-year 2025 GDP growth forecast at 4.3% for now. ([email protected])0751 GMT - The French economy is set to keep limping over the rest of the year as a drag from tariffs exacerbates already weak domestic demand, ING economist Charlotte de Montpellier says. The eurozone's second-largest economy grew just 0.1% in the first quarter of the year, barely changing course after a contraction at the end of 2024, figures show Wednesday. And that near-stagnation is likely to persist in the coming quarters, De Montpellier says. U.S. tariffs will hit exports, and "adding to this are the effects of uncertainty, the global economic slowdown and more restrictive fiscal policy, all of which will weigh on French economic activity throughout the year," she says. "As a result, the French economy is likely to remain close to stagnation for the rest of the year." ([email protected]; @joshualeokirby)0749 GMT - China's economy may face more headwinds from a faster drop in exports, ANZ Research analysts write in a note as they cut their 2025 GDP growth forecast for the country to 4.2% from 4.8%. Official manufacturing PMI data showed that new exports dropped sharply in April. That reflects the increased severity of disruptions in external demand and global supply chains from U.S. tariffs on Chinese goods, they add. However, the Caixin PMI for April remained in expansionary territory, showing that tariffs have hurt larger companies more than small businesses, they note. The private gauge is more focused on smaller and private manufacturers. That said, while tariff pressure on China's manufacturing may be easing it is not completely gone, ANZ says. ([email protected]; @ivy_jiahuihuang)0735 GMT - South Korea's headline consumer inflation likely eased slightly in April, which may pave the way for the central bank to resume rate cuts to support the economy. The median forecast from a WSJ poll of 17 analysts is for a 2.0% on-year rise in the benchmark consumer-price index, following a 2.1% gain in March. The index is tipped to have remained flat on month in April after edging up 0.2% in the previous month. The Bank of Korea paused its easing cycle in April after cutting rates in February this year and in October and November of 2024. Most economists expect rate cuts to resume in May. The inflation data are due on Friday. ([email protected])0732 GMT - U.S. real estate stocks and bank stocks have been among the top performers in the U.S. as equities have recovered due to hopes that trade tariffs won't be as severe as initially feared, Danske Bank analysts say in a note. These sectors should benefit from a pause in recession fears and they are also less likely to be impacted by currency swings, trade disruptions, or if tariff disputes resurface, the analysts say. "This is a combination [real estate and banks] few investors would buy into a few months ago but which makes full sense now." ([email protected])0720 GMT - The dollar could benefit if upcoming U.S. economic data are weak as it would potentially put pressure on President Trump to withdraw tariffs, Commerzbank's Thu Lan Nguyen says in a note. Trump has already shown he reacts to such pressure with a 90-day pause in reciprocal tariffs and the withdrawal of tariffs for various sectors following a slump in stocks and Treasurys, she says. "The faster and more severely the U.S. economy threatens to collapse, the more likely it seems to me that Trump will reverse much of his trade policy." U.S. ADP private payrolls and U.S. GDP data are due at 1215 GMT and 1230 GMT respectively. The DXY dollar index trades flat at 99.2670. ([email protected])