FOMC Meeting Minutes, Crude Oil Inventories

EUR/USD experienced a modest bullish recovery on Tuesday, breaking a two-day losing streak and posting last-minute gains ahead of the Trump administration’s broad “reciprocal” tariffs set to take effect on April 9. Key Federal Reserve (Fed) officials have started to push back against rising market expectations of rate cuts throughout 2025, creating a potential clash with the negative economic impact of the looming tariffs.

The European economic data calendar is relatively light this week, with Tuesday offering a brief respite from the usual waves of geopolitical and trade headlines often associated with the Trump administration. However, several notable Federal Reserve officials took the opportunity to highlight that the uncertainty and inflationary pressures caused by U.S. tariffs will make the Fed’s rate-cutting process more challenging, rather than easing it.

Despite these concerns, market participants are growing increasingly confident that the Fed will be forced to initiate a rate-cutting cycle before the year ends, as the economic fallout from these tariffs could push the U.S. toward a recession.

Key economic reports are scheduled for release this week, with Consumer Price Index data set to arrive on Thursday, followed by Producer Price Index  figures and the University of Michigan (UoM) Consumer Sentiment Index on Friday.

​ Gold prices ended the session on Tuesday just below the $3,000 mark as rising U.S. Treasury yields diminished the appeal of the non-yielding metal. Despite hopes of potential trade agreements, ongoing tensions in the "trade war" between the U.S. and China are keeping investors on edge.

Meanwhile, gold prices came under pressure as U.S. Treasury yields surged across the yield curve. Speculation that China may be dumping U.S. Treasuries in retaliation to the sweeping U.S. tariffs continues to push bond yields higher, making it less attractive for traders to place fresh bullish bets on gold.

Traders are now focusing on the release of the Fed’s meeting minutes, though these will be overshadowed by the upcoming inflation data for both consumers and producers, set to impact market sentiment.

Oil prices experienced a sharp decline on Tuesday marking a four-year low. This drop came as investors increasingly factored in the growing risk of a global recession, driven by the escalating trade conflict between the U.S. and China—the world’s largest economies.

Starting Wednesday at 04:01 GMT, the U.S. will enforce a 104% tariff on Chinese goods, as a White House official confirmed. This move comes after China failed to meet a noon deadline set by Trump to reduce its retaliatory tariffs. The U.S. decision to impose an additional 50% tariff on Chinese imports has intensified tensions. China’s response has been firm. The country’s Ministry of Commerce vowed to "fight to the end," pushing back against what it called U.S. economic coercion, heightening fears of a global economic slowdown. Both oil benchmarks continued to slide in after-hours trading.

Meanwhile, U.S. crude oil and distillate inventories decreased, while gasoline stocks rose last week, according to figures from the American Petroleum Institute (API). Official weekly inventory data from the Energy Information Administration is scheduled for release on Wednesday.

U.S. stock index futures took a sharp dive on Tuesday following a significant sell-off on Wall Street. The decline was triggered by the announcement that President Donald Trump's newly imposed tariffs were set to take effect at midnight.

The US 500 ended the session with substantial losses, down 3.71% on the iForex platform, while the US 30 and US Tech 100 dropped 3.06% and 4.32%, respectively. These declines were mainly driven by rising trade tensions as the Trump administration prepared to implement heavy tariffs on Chinese imports.

The technology sector was hit particularly hard, with Apple Inc.’s share dropping 4.66% to an 11-month low. Tesla Inc. saw a 5.4% slump, while NVIDIA closed 1.28% lower.

Looking ahead, investors are closely watching the upcoming consumer price index (CPI) report, due for release on Thursday, as it could offer further insight into the country’s inflation outlook.