The clouds of recession dissipate? The recovery of the US economy triggers a carnival of US dollar assets, and the US index is about to break through!

Asian Market Review

On Monday, the US dollar index returned to the 104 mark as data showed that US corporate activity rebounded in March. As of now, the US dollar price is 104.27.

U.S. President Trump: From April 2, a 25% tariff will be imposed on all countries that purchase Venezuelan oil and gas. New tariffs will be announced in the near future for multiple industries such as automobiles, pharmaceuticals, wood, and chips. It may impose tariff exemptions on many countries, but they must be equal.

US Secretary of aihuaforex.commerce: The tariff announcement on April 2 will launch the "External Revenue Agency".

A senior Ukrainian government source said that U.S. and Ukrainian officials will discuss further consultations after the Russian-US meeting in Saudi Arabia are over.

The Russian-US-Saudi talks lasted for 12 hours, and the joint statement was released on the 25th. White House sources said that the US-Russia talks went smoothly and positive news will be announced.

Egypt security sources said Egypt has made an emergency proposal to Israel and Hamas to restore a ceasefire in Gaza.

Trump said he expected to sign the U.S.-U.S. mineral agreement soon.

The US S&P Global Manufacturing PMI initial value in March was 49.8, the lowest in three months. The US S&P Global Services PMI initial value in March was 54.3, the highest in three months.

Federal Bostic believes that this year will only dropThe rate is once, as inflation progress will slow.

Trump urged the Federal Reserve to cut interest rates and talk about annexation of Greenland again.

Summary of institutional views

Morgan Stanley: The Federal Reserve is expected to resume positive cash flow

Morgan Stanley analysts said in a report on Monday that the Federal Reserve appears to be about to end historic continuous losses and may return to the track of returning cash to the Treasury Department. This involves the relationship between how the Fed makes money to fund its operations and the cash the Fed pays to maintain control of short-term interest rates. The aggressive rate hike that began three years ago caused severe losses to the Federal Reserve's accounts, and now with the decline in short-term interest rates, Morgan Stanley believes the Federal Reserve is approaching the critical point of returning to profits. Morgan Stanley believes that the Fed's balanced profit and loss rate is about 4.8%, "a shrinking balance sheet coupled with lower policy rates has lifted the Fed out of losses. Analysts say the Fed continues to reduce its bond holdings and the prospect of further rate cuts "meaning the Fed will start to make profits again." The Fed's financial situation last Friday, with the report showing that the Fed's aihuaforex.combined net loss in 2024 totaled $77.5 billion in 2024, aihuaforex.compared with $114.6 billion in 2023. The Fed's last profit was aihuaforex.com is in 2022.

Bank: The Fed has no room for mistakes in inflation. The US core PCE will not reach its peak until...it will reach its peak

We lowered the US economic growth forecast for the fourth quarter of this year from 2.3% to 1.8%, and also raised the inflation forecast. We expect the US overall and core PCE monthly rate to grow by 0.3% in February, but the core PCE risk rising to 0.4%. In addition, it is also expected that the US core PCE will peak at 3% in the third quarter of this year and remain at this level in the fourth quarter. We believe that the tariffs on April 2 will ultimately increase the effective tariff rate by 1.5%-2%, but some announced measures will be passed

Faced with a moderate stagflation scenario, we believe the Fed will keep interest rates unchanged. Risks tend to slow growth and inflation rise. If the core PCE annual rate exceeds the 3% threshold, it will be difficult for the Fed to cut interest rates. On the other hand, the rise in unemployment to 4.5% may trigger interest rate cuts, especially if the number of new jobs is below 100,000. In this case, the risk of recession increases and the Fed is likely to be quick Turning to an easing stance, cut interest rates by 200 basis points or more. In other words, the distribution of Fed policy results looks two-way, and returning to neutral policy interest rates feels like a "edge" result.

Fanong Credit: The euro can only resume upward momentum when the PMI breaks through...

Europe's uptrend has stagnated since the euro broke through 1.0950 against the dollar and hit a five-month high at the beginning of last week, the euro's rise has stalled and then been largeReduced a little. It is worth noting that the interest rate spreads in Europe and the United States also showed a similar trend. With the German parliament finally approving a large-scale fiscal spending plan, the 10-year German government bond yield has fallen back to 2.75%. The key to the EU's broader fiscal stimulus is how long it will take for fiscal plans to support the eurozone economy, and such an ambitious outlook in the early days may still help boost confidence. However, today's Eurozone PMI data cannot rise significantly to the expansion range. We believe that only if the euro zone aihuaforex.comprehensive PMI breaks through the summer high of 51 and rebounds to its May peak of 52.2, it is possible to restore the upward momentum of the euro. The euro is expected to remain stable near current levels until mid-year.

Goldman Sachs: The pound will continue to ride the wave of European growth and raise its forecast to...

The pound has been at the midstream level in the G10 currency so far this month and is largely following the general trend of the European foreign exchange market. While we expect the euro price movement to continue to be the main driver of the pound, we don’t think the reason for the further rise of the European pound is sufficient, judging from the positive news of the European growth that has been released alone. Meanwhile, the focus of the pound will turn to the UK fiscal incident this Wednesday. We expect UK fiscal pressure to last long, but the Chancellor's focus this week may be on cutting spending and consolidating fiscal stance rather than adding more expansionary measures. We believe this suggests that the pound’s left-tail risk is relatively small this week. Looking ahead, we continue to see that pound has reason to separate from other European currencies. We believe that the pound should benefit from the relative flexibility of US tariffs.

While the broader cyclical outlook and high thresholds for risk pricing make the pound less attractive in the short term, the ultimate easing of U.S. economic growth concerns should also put downward pressure on the pound. Finally, while UK data continues to be mixed, the Bank of England responded to the uncertain domestic and global environment. Overall, we have a constructive view of the pound overall, but growth pricing in Europe and the U.S. should continue to dominate the European and US pounds and US pounds respectively in the aihuaforex.coming weeks. Taking into account the changes in the European foreign exchange aihuaforex.comprehensive level after fiscal and growth reassessment, we raised the 3, 6 and 12-month pound US forecast to 1.29, 1.26 and 1.24 (previously 1.26, 1.26, 1.22), and raised the 0.83, 0.82 and 0.82 respectively.

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