Market navigator: week of 28 April 2025

Written by

Fabien Yip

Market Analyst

Summary

• What Happened Last Week: US-China trade tensions eased with Trump reducing tariff threats, Fed independence questioned, China strengthened global ties, IMF cut global growth forecasts to 2.8%, and Q1 earnings showed mixed corporate performance.
• Markets in Focus: Nasdaq 100 gained 6.4% and S&P 500 rose 4.6%, while Bitcoin surged 12% above $90,000, and USD/JPY recovered on dollar strength.
• The Week Ahead: US GDP, China's PMIs, BoJ's interest rate decision, and Non-Farm Payrolls will shape sentiment alongside major tech earnings.

What happened last week

• Trade tension eases: President Trump signalled willingness to reduce proposed 145% Chinese tariffs after meeting major retailers. Reports indicate officials are considering a tiered approach reducing Chinese tariffs to 50-65%, but Treasury Secretary Bessent cautioned a full deal could take years. Parallel discussions with India, Japan and South Korea continue.
• Fed's independence questioned: Trump clarified he won't fire Federal Reserve chair Powell despite criticising him for delayed interest rates cuts, following negative market reactions to his earlier comments.
• China's globalisation efforts: Following President Xi's visit to Southeast Asia, Foreign Minister Wang Yi attends China-Central Asia and BRICS meetings to strengthen diplomatic ties amid US tensions, while the central bank unveiled yuan internationalisation initiatives.
• Global economy slow down: The International Monetary Fund (IMF) downgraded global growth forecast to 2.8% from 3.3% amid trade uncertainties, marking the weakest expansion since COVID, and elevated US recession probability to 40%.
• Q1 earnings: Tesla's 71% drop in Q1 profit contrasted with BYD's 100% growth as the US EV maker's reputation has been tied up with political agenda lately. Boeing reported a smaller-than-expected loss by delivering more jets, but is now pressured to deal with the US-China trade situation. Google gained 1.5% on strong advertising performance, while Intel fell 7% after disappointing guidance.

Markets in Focus

Tech leads US market rebound

US equity indices rallied last week amid improving trade tension narratives, with technology sectors leading the advance. The Nasdaq 100 gained 6.4%, while the S&P 500 appreciated 4.6% and the Dow Jones added 2.5%. Despite disappointing quarterly results, Tesla shares surged 18% after CEO Elon Musk announced reduced commitments to the Department of Government Efficiency (DOGE) from May onwards. Conversely, T-Mobile US plummeted 11% following subscriber acquisition figures that fell below analyst expectations.

Tariff implications are increasingly manifesting in macroeconomic indicators. The US composite purchasing managers' index (PMI) contracted to 51.2 in April, a 16-month low, signalling decelerating business activity. Concurrently, price indices surged to 13-month highs. Manufacturing sectors experienced particularly severe impacts, attributable to tariff implementation, supply chain disruptions, and currency depreciation. The University of Michigan's latest survey indicated persistently subdued consumer sentiment and deteriorating labour market expectations.

The US Tech 100 Index breached its 20-day and 50-day simple moving average (SMA) during the recent recovery phase. Price action exhibits characteristics consistent with Elliott Wave structures, with the current advance potentially representing corrective Wave B formation. The 0.618 Fibonacci retracement projection suggests potential upside to approximately 19,980 before bearish momentum resumes. For the current downward trend to truly reverse, the index needs to consistently stay above its 200-day SMA at 20,425. Key resistance sits at around 20,400, which will likely limit further gains unless there's meaningful improvement in global trade relations.

Figure 1: IG US Tech 100 index (daily) price chart

Is Bitcoin back?

The cryptocurrency surged 12% last week and traded above $90,000 for the first time since March. In addition to an improved risk sentiment on hopes of an improving US-China trade relationship, de-dollarisation concerns, a $3.6 billion venture between Cantor Fitzgerald, SoftBank and Tether and significant ETF inflows also helped drive Bitcoin prices up. It was also reported that the cryptocurrency has finally reverted above the average acquisition cost of short-term traders, which further boosts trader confidence. After the strong recovery, Bitcoin is trading at 13% below its historic high.

Technical indicators suggest elevated valuation, evidenced by the relative strength index (RSI) exceeding the 70 threshold, traditionally signalling overbought conditions. Price action in the immediate trading sessions will prove decisive for establishing medium-term directional bias. Sustained trading above the 200-day SMA would substantiate completion of the corrective phase, potentially initiating momentum toward the $99,000 target zone. Conversely, failure to maintain price action above the SMA with subsequent retesting of support at approximately $83,000 could signal resumption of bearish market structure.

Figure 2: Bitcoin (daily) price chart

Technical signal emerges on USD/JPY

USD/JPY rebounded from seven-month lows as the US dollar strengthened 1.1% against the yen amid moderating trade tensions. Nevertheless, concerns regarding US economic resilience continue to intensify. Simultaneously, Tokyo core inflation accelerated to 3.4%, reaching a two-year peak. Our fundamental analysis indicates continued yen appreciation potential, though the path will likely include periodic pullbacks. The Bank of Japan's (BoJ) monetary policy decision this week will be closely watched for its potential impact on currency movements.

From a technical analysis perspective, the currency pair maintains its trajectory within a descending channel below the 200-day simple moving average (SMA). However, the moving average convergence divergence (MACD) crossover potentially signals temporary USD strength, with upside potential toward 146 before the predominant downtrend reasserts itself. The recent 139.9 low provides immediate support, while significant resistance emerges at approximately 148.1.

Figure 3: USD/JPY (daily) price chart

The Week Ahead

This week brings several critical economic indicators that will shape market sentiment. Investors should closely monitor the US gross domestic product (GDP) growth rate on Wednesday, as this will provide insight into the world's largest economy's momentum before the full impact of tariffs. China's manufacturing sector performance will be evaluated through dual metrics: the official National Bureau of Statistics (NBS) Manufacturing PMI and the independent Caixin Manufacturing PMI, both released Wednesday morning. Thursday's BoJ interest rate decision is anticipated to maintain the current 0.5% benchmark rate, potentially influencing currency markets and global interest rate differentials. Finally, Friday's U.S. Non-Farm Payrolls report will be crucial for assessing labour market dynamics, potentially influencing Federal Reserve policy decisions in the coming months.

The quarterly earnings season continues with critical financial disclosures from four Magnificent Seven companies (Microsoft, Meta, Apple and Amazon) alongside other sector leaders including Visa, Pfizer and Berkshire Hathaway. Hong Kong listings feature prominent financial institutions, with HSBC and China's four major state banks scheduled to report.

Key macro events this week

Tuesday 29 April 2025

• 10.00pm (HK time) -- US JOLTs Job Openings (Mar): previous 7.568M, consensus 7.5M

Wednesday 30 April 2025

• 9.30am (HK time) -- Australia Inflation Rate (Apr): previous 2.4% year-on-year (YoY), consensus 2.2%
• 9.30am (HK time) -- China NBS Manufacturing PMI (Apr): previous 50.5, consensus 49.9
• 9.45am (HK time) -- China Caixin Manufacturing PMI (Apr): previous 51.2, consensus 49.9
• 5.00pm (HK time) -- Euro Area GDP Growth Rate Flash (Q1): previous 0.2% QoQ, consensus 0.2% QoQ
• 8.30pm (HK time) -- US Core PCE Price Index MoM (Mar): previous 0.4%, consensus 0.1%
• 8.30pm (HK time) -- US GDP Growth Rate Advance (Q1): previous 2.4%, consensus 0.4%
• 8.30pm (HK time) -- US Personal Income MoM (Mar): previous 0.8%, consensus 0.4%
• 8.30pm (HK time) -- US Personal Spending MoM (Mar): previous 0.4%, consensus 0.4%

Thursday 01 May 2025

• 9.30am (HK time) -- Australia Balance of Trade (Mar): previous A$2.968B, consensus A$3.13B
• 11.00am (HK time) -- Japan BoJ Interest Rate Decision: expects to keep policy rate unchanged at 0.5%
• 1.00pm (HK time) -- Japan Consumer Confidence (Apr): previous 34.1, consensus 34
• 10.00pm (HK time) -- US ISM Manufacturing PMI (Apr): previous 49, consensus 47.9

Friday 02 May 2025

• 5.00pm (HK time) -- Euro Area Inflation Rate YoY Flash (Apr): previous 2.2%, consensus 2%
• 8.30pm (HK time) -- US Non-Farm Payrolls (Apr): previous 228K, consensus 130K
• 8.30pm (HK time) -- US Unemployment Rate (Apr): previous 4.2%, consensus 4.2%

Key corporate earnings

Tuesday 29 April 2025

• Visa
• Coca-Cola
• Pfizer
• HSBC
• China Construction Bank
• PetroChina
• Industrial and Commercial Bank of China
• Bank of China
• Agricultural Bank of China

Wednesday 30 April 2025

• Microsoft
• Meta
• Qualcomm
• Caterpillar
• Hong Kong Exchange

Thursday 1 May 2025

• Apple
• Amazon.com
• Eli Lilly
• Mastercard
• McDonald's

Friday 2 May 2025

• Berkshire Hathaway
• Exxon Mobil

Source: Trading Economics, AASTOCKS, Reuters (as of 26 April 2025)