Optimism Rises as U.S. Trade Talks Show Early Progress:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.68% on 17 April 2025.

Macro Update:  U.S. monetary policy remains under scrutiny, following Fed Chair Jerome Powell’s reaffirmation that interest rate cuts are not imminent. Powell emphasized the need to contain inflation expectations, arguing that recent price hikes from tariffs should not trigger reactionary policy moves. His cautious stance drew sharp criticism from former President Trump, who renewed his calls for Powell’s removal, asserting that rate cuts should have already occurred. Despite Trump’s vocal opposition, Powell’s term as Fed Chair is secure until 2026, highlighting the independence of the central bank even amid mounting political pressure. Meanwhile, stronger-than-expected U.S. retail sales, up 1.4% in March, added a layer of complexity to the economic outlook, as consumers accelerated purchases ahead of anticipated tariff increases.

Top Market Movers: Among top gainers on FTSE 100 index, Rentokil Initial PLC (LSE: RTO) witnessed a rise of 3.91% followed by Prudential PLC (LSE: PRU) which gained around 1.86%.

Commodity Update: The dollar steadied after hitting a seven-month low against the yen, as Fed Chair Powell emphasized inflation concerns amid escalating trade tensions. Gold slipped 0.08% to $3,344.77, silver dropped 2.08% to $32.29, and copper eased 0.23% to $9,185.53. Brent crude rose 0.70% to $66.33, with oil prices extending gains in Asian trade on renewed supply concerns following U.S. sanctions on Iran, despite a rise in U.S. crude inventories.

Our Stance: Investor sentiment showed signs of recovery on Thursday ahead of the Good Friday holiday, buoyed by growing optimism around potential diplomatic resolutions to ongoing trade disputes. Markets responded positively to news that the U.S. and Japan had made headway in trade discussions, with President Trump characterizing the talks as making “big progress.” Japan’s early engagement with the U.S. may serve as a bellwether for how other nations, including China and the European Union, will approach future negotiations. European Commission President Ursula von der Leyen’s openness to dialogue and reports of China’s willingness to engage—provided tensions are de-escalated—suggest that there may be a path forward that avoids a full-scale trade war.

FTSE 100

The FTSE 100 is down 0.39% on Wednesday, currently trading at 8,243.06, and forming a bearish candlestick pattern, signalling renewed downside pressure. Despite recent gains, the index remains below a key horizontal resistance level, suggesting that bearish momentum persists. Technically, the index continues to trade beneath its 50-period Simple Moving Average (SMA), which serves as dynamic resistance and reinforces the prevailing negative sentiment. The continued failure to break above this moving average reflects ongoing selling pressure and a lack of meaningful bullish follow-through. From a structural standpoint, the 8,100.20 level remains a critical horizontal support zone. Holding above this area could help stabilize the index in the near term and potentially trigger a technical rebound. However, a decisive break below 8,100.20 would likely intensify the downward trend, exposing the index to deeper support levels in upcoming sessions.