Weekly Market Outlook (April 14th – April 18th)

U.S. President Trump’s 90-day tariff pause for most countries sparked a strong market rebound last week, with global stock markets rallying sharply. The three major U.S. indices posted historic single-day gains of over 10%. However, underlying risks persist as the U.S. simultaneously raised tariffs on Chinese imports to 125%, escalating trade tensions.

Equities later gave up some of their gains after the U.S. CPI came in at a four-year low, signaling softer inflation. Meanwhile, the U.S. Dollar continued to weaken, and gold surged to a new all-time high.

Week Ahead: Central Bank Decisions in Focus

This week, market attention turns to several key central bank decisions, with the Bank of Canada set to announce its latest policy move on Wednesday, followed by the European Central Bank on Thursday.

The Bank of Canada’s decision will be particularly closely watched, as the Canadian economy faces mounting challenges from rising global trade tensions and escalating tariffs.

1. Bank of Canada Rate Decision – April 16th

The Bank of Canada has voiced increasing concern over a potential recession in the year ahead, citing ongoing global economic uncertainty. In March 2025, Canada’s unemployment rate rose to 6.7%, with a net loss of 33,000 jobs—the first monthly employment decline in over three years.

This weak labor market data puts the BoC in a difficult position regarding its policy path. The upcoming decision will be a key driver for the Canadian Dollar’s direction in the near term.

2. European Central Bank Policy Decision – April 17th

he European Central Bank is widely expected to cut its deposit rate by 25 basis points to 2.25% at its upcoming meeting on April 17—marking the seventh consecutive rate cut since June 2024.

However, the impact on the euro may be limited, as recent euro strength has been largely driven by broad U.S. Dollar weakness. Still, some volatility in EUR could emerge in the week ahead, especially if the ECB make a significant change in policy path.

3. China Q1 GDP & Key Data – April 14^th & 16^th

China will release its Q1 GDP and March activity data (industrial production, retail sales, and fixed asset investment) on April 16th—crucial indicators for assessing the health of the world’s second-largest economy.

Markets will closely monitor this data set as global investors assess the broader fallout from the recent U.S.-China tariff escalation. A weaker-than-expected GDP print could trigger risk-off sentiment, pressuring commodity currencies (AUD, NZD), emerging market FX, and equities, while boosting safe-haven assets like the Japanese Yen and Gold.