- Trump’s recession remarks rattled markets, however warning indicators had been already in place.
- USD/JPY holds trendline assist, however draw back dangers stay.
- AUD/USD weakens, testing key shifting common as momentum stays bearish.
- Nasdaq 100 cracks long-term uptrend—AI mania unwind or only a correction?
US recession fears rattled markets on Monday, with US President Donald Trump’s remarks cited because the spark behind a pointy unwind in riskier belongings.
Talking on Fox Information, Trump prevented ruling out a recession, as an alternative suggesting the economic system is in a “interval of transition” as his administration pushes main coverage modifications. “I hate to foretell issues like that. There’s a interval of transition as a result of what we’re doing could be very huge. We’re bringing wealth again to America.”
The feedback counsel he’s extra tolerant of near-term financial weak spot than many had assumed, very like his early strategy to the inventory market in his second time period. Gone are the every day social media posts cheering Dow information, and there’s little signal he intends to shift course to stabilise more and more unstable markets.
Recession Indicators Flashing Amber
Whereas many pointed to Trump’s remarks because the set off for the chance rout, the warning indicators had been flashing properly earlier than. Citigroup’s U.S. financial shock index has been adverse since mid-February, signalling a gradual stream of weaker-than-expected information even with lowered expectations. The Atlanta Fed GDPNowcast mannequin factors to an annualised first-quarter progress of -2.4%, reflecting not simply tariff uncertainty however broader cracks forming within the labour market. Hardly the form of backdrop that instils confidence.
The charts reinforce the rising unease, with Fed funds futures now pricing in additional than three full 25bp fee cuts in 2025. The / Treasury curve slipped into adverse territory earlier this month, suggesting bond merchants are bracing for a slowdown. The MOVE index—primarily the bond market’s model of the —has surged to its highest stage because the final presidential election, highlighting rising uncertainty.
Supply: TradingView
So sure, Trump’s feedback could have been the spark, however the gas had been sitting there for weeks. Encouragingly for merchants, the response throughout some markets seemed extra technical than purely basic, suggesting positioning performed a job.
FX: Watching USD/JPY and AUD/USD as Danger Sentiment Wobbles
is value watching at the moment in Asia, given its hyperlinks to danger urge for food by way of yen carry trades, particularly because it bottomed properly earlier than U.S. fairness futures through the North American session. If it begins to slip once more, it could be an indication that pressured liquidations in riskier asset lessons could also be on the way in which.
Supply: TradingView
For now, USD/JPY stays locked in a descending channel, bouncing off trendline assist on Monday, mirroring Friday’s value motion. That and close by horizontal assist are the instant draw back ranges to observe, with a break beneath opening the door for a transfer in the direction of 146 and even 144.23. On the topside, 148 has capped countertrend strikes just lately, with 148.65 the subsequent layer of resistance after that. RSI (14) and MACD stay firmly bearish, favouring promoting rallies and draw back breaks.
Supply: TradingView
No surprises seeing weaker to begin the week, with the three-candle night star sample accomplished Friday appropriately signalling additional promoting on Monday. AUD/USD has been monitoring the 50DMA carefully in current months, so the truth that Monday’s slide stalled there’s noteworthy. Under, 0.6238 and 0.6188 have been in play over the previous month. On the topside, 0.6300 could provide some resistance, however the extra fascinating stage is the swing excessive of 0.6364 from March 6. Momentum indicators stay firmly bearish, reinforcing the near-term draw back bias.
Nasdaq 100: AI Unwind or Only a Correction?
dominated the headlines after the bodily index posted its largest one-day drop since 2022, slicing by way of uptrend assist relationship again to early 2023—when the AI mania actually took off. Given final week’s break beneath the 200DMA, it raises the query: Are we witnessing the unwind of AI euphoria? With current value motion and rising competitors from China, the items are falling into place for some form of reset.
Supply: TradingView
The early 2023 uptrend sits round 19,900 at the moment, making it and former horizontal assist at 19,850 key near-term ranges on the topside. Under, the value bounced off minor assist at 19,300 in a single day, with one other minor stage at 19,140 sitting just under. A break of the latter might see bears push for a retest of 18,387. Each RSI (14) and MACD are flashing bearish indicators, though the latter is now in oversold territory on the every day timeframe—suggesting that whereas the bias stays tilted to the draw back, the chance of a countertrend squeeze is rising after current heavy falls.
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