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Time of India
26-05-2025
- Business
- Time of India
USDINR volatility to impact domestic gold prices amid Trump's EU tariff shifts
After posting the worst weekly decline this year in the week ending May 16, spot gold prices rallied sharply this week on renewed safe haven demand as the US lost its last top-notch credit rating and easing tariff tensions flared once again with Trump threatening EU, Samsung and Apple with tariffs. Spot gold traded between $3204 (May 20) and $3365 (May 23) during the week before closing with a huge weekly gain of 4.84% at $3357. It was up by 1.89% on Friday. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like '엄마, 천국 가면 다시 만날 수 있어?' 월드비전 더 알아보기 Undo Tariff developments Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. On Friday, President Trump threatened to a sweeping 50% tariffs on the European Union from June 1 as he feels discussions with them are not going anywhere. He added that the bloc is very difficult to deal with. He increased pressure on Apple to manufacture its iPhones in the US, threatening a tariff of at least 25% in case of non-compliance. Treasury Secretary Scott Bessent said that he anticipates several large deals in the next couple of weeks as many Asian countries have approached with very good deals. He expects in-person negotiations with Chinese counterparts also. Live Events Data roundup Leading Index (April) fell 1% (forecast 1%), the most since March 2023. S&P Global US manufacturing PMI (May prel.) at 52.30 beat the forecast of 49.90 and grew at the fastest pace since February, as even services PMI at 52.3 (forecast 51) clocked the quickest pace since March, which helped the composite PMI expand the most since March. The UK's core CPI at 3.8% was hotter-than-expected as it rose the most since April 2024, while headline annual inflation rate surged from 2.6% in March to 3.5% (forecast 3.3%) in April, the hottest since the beginning of 2024. The CPI data may force the Bank of England to ease the pace of rate cuts. Japan's inflation continues to be high, as national headline CPI and core CPI at 3.6% and 3.5% in April beat their respective forecasts of 3.5% and 3.4%. The headline CPI reading is the hottest since February 2023. China's data were mostly disappointing as although industrial production in April at 6.1% beat the forecast of 5.7%, retail sales and property data lagged their respective forecasts. On May 19, China's Central Bank cut both one-year and 5-year Loan Prime Rates by 0.1% each. Fedspeak Austan Goolsbee, President of the Chicago Federal Reserve, warned that tariff shock may delay rate cuts as recent tariff developments have complicated the Fed's job. Fed Governor Waller floated a possibility of a rate cut in the second half of the year if the Trump Administration's tariffs on US trading partners settle around 10%. Yields and Dollar Index Bond yields surged globally on worries over fiscal situations. Japan's 30-year and 40-year yields rose to a record high. US bond yields surged sharply higher before backing off amid the intensifying trade war. A weak 20-year bond auction worsened the sell-off in treasuries. Ten-year yields at 4.62% hit the highest level since February 2025, while 30-year yields surged 5.15%, the highest since 2007. US ten-year and 30-year yields closed 1.84% and 2.65% higher, respectively, on the week. The US Dollar Index tumbled nearly 2% on the week as it closed at 99.10. It is close to testing the post-reciprocal tariff low of 97.92. ETF Total known global gold EETF holdings stood at 87.90 MOz as of May 22, as holdings were on a track of a fifth consecutive decline on profit booking by investors on easing trade worries. However, ETF holdings are still up over 6% YTD. Upcoming data and events Traders will closely monitor US GDP (1Q secondary reading), Conference Board consumer confidence (May), FOMC minutes (May 7 meeting), real personal spending (April), PCE Price Index (April)- Fed's preferred inflation gauge, advance goods trade balance (April), University of Michigan sentiment and inflation expectations (May final). The Fed Chair Powell will give Baccalaureate remarks at Princeton University on May 26. He may not discuss the economic outlook, though. Outlook Lingering worries over US fiscal deficits, globally surging bonds, Dollar weakness and intensifying trade war make a strong case for gold extending its rally further, though it is to be noted that markets are still somewhat sceptical of Trump's threat to the EU. The US Dollar Index has weakened 7% this year and is likely to fall further on US exceptionalism being put into question. USDINR volatility will significantly affect domestic gold prices . Gold bulls need to be cautious about the possibility of Trump shifting his stance on EU tariffs and progress in trade deals with other trading partners. A decisive breach of the resistance zone of $3365-$3371 may take the yellow metal to $3435 and will bring the all-time high of $3500 in focus. Support is at $3250/$3292. Overall, we continue to maintain a bullish stance on gold. (The author is Associate Vice President, Fundamental Currencies and Commodities at Mirae Asset Sharekhan ) ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
BusinessToday
23-05-2025
- Business
- BusinessToday
Malaysia's LI Rose 0.6% In March, Signaling Continued Growth
Malaysia's Leading Index (LI), a key predictor of the country's economic trajectory, rose by 0.6% year-on-year to 112.5 points in March 2025, up from 111.9 a year earlier, according to the Department of Statistics Malaysia (DOSM). The improvement was driven mainly by strong performances in two indicators: the Number of Housing Units Approved, which surged 27.8%, and Real Imports of Semiconductors, which climbed 22.3%. These gains reflect sustained activity in the construction and electronics sectors — both critical to Malaysia's domestic and export-oriented economy. However, on a month-on-month basis, the LI posted a marginal decline of 0.04%, influenced by a 0.2% drop in both the Bursa Malaysia Industrial Index and Real Imports of Semiconductors. This suggests near-term volatility in industrial and external trade indicators. Despite this minor dip, DOSM noted that Malaysia's economy is expected to continue expanding, albeit at a moderate pace, underpinned by sound economic fundamentals and proactive fiscal management. The smoothed long-term trend of the LI remained below the 100.0-point threshold, indicating that while growth is present, it may be slower in the near term. The Coincident Index (CI), which reflects current economic conditions, also posted a 1.4% year-on-year increase, reaching 126.8 points in March 2025, up from 125.1 a year earlier. This growth was broad-based, driven by gains in almost all CI components, with the exception of Real Contributions to the EPF, which showed a decline. On a monthly basis, however, the CI eased by 0.2%, attributed primarily to a 0.3% decline in Capacity Utilisation in Manufacturing, signaling a slight pullback in factory activity during the month. In a positive sign, the Diffusion Index, which measures the breadth of growth across indicators, remained above the 50-point benchmark — suggesting continued expansion momentum. The LI Diffusion Index climbed sharply to 71.4% in March from 28.6% in the prior month, while the CI Diffusion Index held steady at 66.7%. Overall, while short-term indicators show some volatility, Malaysia's economic outlook remains broadly positive, supported by steady domestic activity and a stable policy environment. Related
Fibre2Fashion
23-05-2025
- Business
- Fibre2Fashion
Australia's economic momentum slows as leading index falls to 0.2%
The Westpac Melbourne Institute Leading Index's six-month annualised growth rate eased in Australia to 0.2 per cent in April, down from 0.5 per cent in March, signalling a slower pace of economic activity in the coming months. The early-year signs of above-trend growth have now 'all but disappeared,' Westpac said, pointing to heightened global trade uncertainty and a less supportive commodity price environment as key drags. While external pressures dominate, domestic factors have offered only modest support—labour market momentum has slowed, and current interest rate settings are not sufficiently stimulative. Australia's economy is showing signs of slowing momentum. The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index eased to 0.2 per cent in April from 0.5 per cent in March, indicating a deceleration in economic activity. This shift reflects heightened global trade uncertainty and a less supportive commodity price environment. Westpac forecasts GDP growth to reach 1.9 per cent year-on-year by the end of 2025—a below-average result by historical standards, underlining continued challenges for the recovery. Over the past six months, the growth rate of the Leading Index has remained unchanged, with five of its eight components weakening. This mixed performance points to stalling momentum in what was already expected to be a gradual recovery for the Australian economy. The weakening signal has come from financial market and sentiment-based components. The biggest additional drags have come from: the Westpac–Melbourne Institute Consumer Expectations Index (taking 0.23ppts off the headline growth rate); the S&P/ASX200 (–0.12ppts) and the Westpac Melbourne Institute Consumer Unemployment Expectations Index (–0.1ppts). Dwelling approvals and total hours worked have also shaved a further 0.1ppts off the headline growth rate on a combined basis. Over the last six months, this additional drag has been offset by more positive contributions from commodity prices (adding 0.24ppts to the headline growth rate), US industrial production (+0.17ppts) and the yield spread (+0.15ppts). However, all of these components have become less supportive in the last few months. In the case of commodity prices, which are measured in AUD terms, strong gains late last year have given way to a partial retracement since January. US industrial production has also moderated from a mini-surge late last year. The yield spread component is also providing less positive impetus – reflecting, at short end of the interest rate curve, the RBA's gradual policy easing and, at the long end, downgraded global growth prospects. The Reserve Bank Monetary Policy Board next meets on July 7–8. As expected, the board lowered the cash rate target by 25bps to 3.85 per cent at its May meeting, citing increased confidence around inflation and an expectation that international developments would exert some drag on the economy. That drag is already starting to show through more clearly in Leading Index growth reads. That said, it does not look too threatening at this stage, with most of the effect coming via sentiment and financial markets rather than a hit to trade and export prices. Fibre2Fashion News Desk (RR)
BusinessToday
26-04-2025
- Business
- BusinessToday
Malaysia's February LI Declines Marginally From Big Drop In Approval For Housing Units
The annual performance of the Leading Index (LI) registered 112.4 points in February 2025, reflecting a marginal decline of 0.004 points, primarily attributable to a substantial contraction in the Number of Housing Units Approved (-34.5%) and followed by the Real Imports of Other Basic Precious & Other Non-ferrous Metals (-21.5%). According to the Department of Statistics, in terms of monthly performance, the LI recorded a decline of 0.2 per cent in February 2025, indicating a modest negative as compared to the previous month (January 2025: -1.1%). This was primarily bolstered by a 0.5 per cent increase in Real Imports of Semiconductors. Looking at the smoothed long-term trend in February 2025, the LI remained below 100.0 points. Nevertheless, DOSM believes Malaysia's economy to remain moderate, supported by strong economic fundamentals despite facing global uncertainties, leading to complex spillover effects. Meanwhile, the Coincident Index (CI) which measures the overall current economic performance rose by 2.0 per cent to 144.8 points in February 2025 as compared to 124.7 points in the corresponding month a year before. This improvement was contributed by widespread increases across all components of the CI. At the same time, the monthly performance of the CI increased by 1.9 per cent in February 2025, rebounding from a 1.4 per cent drop in the previous month. This notable recovery was driven by a 2.3 per cent rise in the Capacity Utilisation in Manufacturing, which represented the highest increase among the contributing components. The Diffusion Index for LI and CI showed an increase in February 2025, recording 28.6 per cent and 66.7 per cent respectively compared to 14.3 per cent and 50.0 per cent in the previous month. Related
