Argentina’s currency and bond market reacted sharply as the country announced a major new financing deal with the International Monetary Fund (IMF) valued at $20 billion.

According to Reuters, the agreement, which involved the removal of significant currency and capital controls, reignited optimism from investors and led to a jump in the bond market.

This backdrop has partially accelerated Argentina’s economic stabilisation efforts, driven by President Javier Milei.

Bond market reaction

Argentina’s international bonds rallied sharply after the announcement of the IMF deal, with some maturities rising by as much as 4 cents on the dollar, MarketAxess reported.

This increase reflects a strong sense of confidence among investors about the country’s economic rebound. Meanwhile, the Global X MSCI Argentina ETF (ARGT) gained 5.3% premarket.

Analysts say that support from the IMF is not only indicative of international belief in the economic reform process in Argentina but also acts as a catalyst for investment opportunities in Argentina.

Currency controls and market prediction

The Argentine peso tumbled roughly 17% on Monday morning after the central bank scrapped its controlled “crawling peg” regime and moved to a much wider trading band of 1,000-1,400 pesos per dollar.

The currency, which ended Friday at 1,074 per dollar, was already trading at significantly weaker levels in unofficial parallel markets, where rates hovered around 1,350 per dollar amid tight capital controls imposed since 2019.

The sharp depreciation was widely anticipated by traders following the policy shift, as authorities attempt to unify Argentina’s fractured currency market and manage dwindling reserves.

According to JP Morgan analysts, this possible peso fall could be mitigated by higher demand from grain exporters looking to liquidate their foreign currency profits at the new, more favorable exchange rate.

“In our view, the official FX will likely stabilize below the parallel FX level as of Friday, with agriculture-related FX supply catching up. The FX gap will likely shrink to around 5%,” the investment bank said.

Goldman Sachs forecasts a good market reaction to recent policy measures, adding that the transition to a floating exchange rate exceeded their estimates and is expected to boost the macroeconomic adjustment program presently underway.

The emphasis on reaching a “zero deficit” budget will also be critical to preserving stability and increasing Argentina’s foreign currency reserves.

Impact on foreign currency reserves

The IMF arrangement allows for the immediate release of $12 billion, with a further $3 billion expected later this year.

This cash infusion comes at a critical time for Argentina, which is experiencing a severe economic crisis aggravated by rising inflation rates and declining currency values.

When President Milei took office in late 2023, the government’s dedication to austerity and fiscal discipline shifted into high gear, setting the stage for significant structural reforms.

Addressing long-term economic difficulties will necessitate coordinated efforts across major sectors, including energy and agriculture.

Argentina is a leading producer of agricultural commodities; therefore, luring new investments in grain exports will be vital to the country’s financial health.

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Gold prices can remain overbought or oversold for extended periods of time as investors continue to increase their exposure to the yellow metal, according to experts. 

Gold prices on COMEX had hit a record high of $3,263 per ounce on Friday, and traded near that level on Monday as well. 

At the time of writing, the June COMEX contract was up 0.6% at $3,245.7 per ounce. 

David Morrison, senior market analyst at Trade Nation said:

As things stand, investors continue to increase their exposure to gold on hopes that it will hold its value, acting as a safe haven amid the tariff-induced market uncertainty.

According to Morrison, the daily moving average convergence and divergence indicated that the yellow metal was back at overbought levels. This warrants cautiousness, he said. 

Gold at the mercy of Trump tariffs

Federal Register filings on Monday revealed that the US is initiating investigations into pharmaceutical and semiconductor imports. 

The goal is to potentially impose tariffs on these sectors, citing that heavy dependence on foreign production of medicine and chips poses a national security risk.

Market participants are on edge as US President Donald Trump announced plans to reveal the tariff rate on imported semiconductors within the coming week.

Additionally, Trump stated on Monday that he was open to adjusting the 25% tariffs on imported auto and auto parts from Mexico, Canada, and other countries. 

He acknowledged that car companies “need a little bit of time” as they transition to manufacturing in the US.

“However, markets continue to remain wary amid uncertainty over Trump’s trade policies, and his constant backpedalling on tariffs raises worries over the global economic outlook, keeping the sentiment around the traditional Gold price underpinned,” Dhwani Mehta, analyst at FXstreet, said in a report. 

Interest rates

The uncertainty surrounding tariffs and other policies has caused the economy to enter a “big pause,” according to Atlanta Federal Reserve Bank President Raphael Bostic. 

He suggested that the US central bank should maintain its current position until there is more clarity.

“Meanwhile, markets ignored comments from Atlanta Fed Bank President Raphael Bostic, who suggested that the US central bank should stay on hold until there is more clarity,” Mehta said. 

Markets held an 80% probability that the Fed will maintain rates at its May 7 policy meeting. Additionally, they factored in approximately 85 basis points worth of rate cuts by December in 2025.

Trump administration’s tariff policies could force the Fed to cut rates to avoid a recession, even with high inflation, said Fed Governor Christopher Waller on Monday.

US treasuries and gold

Gold, a non-yielding asset, traditionally acts as a hedge against global uncertainty and inflation. It also tends to flourish in a low-interest-rate environment.

This has been exacerbated by some eccentric moves across the US Treasury market, according to Morrison. 

US Treasuries, backed by the balance sheet of the world’s largest economy and the might of the world’s reserve currency, have always been considered the ultimate safe haven. 

Investors are not only paid interest, but they also have the assurance of the US economy’s backing. 

“But Treasuries have proved to be extremely volatile of late, and have lost some of their appeal,” Morrison said.

Mehta added:

Looking ahead, the further upside in Gold price will likely remain at the mercy of Trump’s tariff headlines and the upcoming Fedspeak as the US calendar remains devoid of top-tier economic data publication. 

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The British government announced on Tuesday that it had secured a fuel delivery, allowing the country’s last steel blast furnaces to remain operational for at least a few more weeks, according to a Reuters report. 

This move is the latest in a series of desperate attempts by the government to preserve domestic virgin steel production.

The UK government has been working rapidly to acquire sufficient amounts of coking coal and iron ore. 

This is crucial to maintain the operation of the loss-making blast furnaces in northeastern England. 

Emergency laws

The urgency of the situation led the government to pass emergency laws on Saturday, granting them operational control of the site. 

This move effectively transferred control from the Chinese owners, Jingye Group, and highlights the government’s commitment to securing the necessary resources for the continued operation of this critical industrial asset.

The operation of the furnaces presented a significant financial challenge. 

The constant need for fuel, coupled with the difficulty of restarting them once shut down, meant that they were a continuous and substantial drain on resources. 

This was further compounded by the fact that they were operating at a loss, hemorrhaging 700,000 pounds (equivalent to $922,950) each day they remained active. 

This situation highlighted the urgent need to address the operational inefficiencies and financial losses associated with the furnaces.

Dependence on old furnaces

The absence of operational furnaces within Britain would have a cascading effect on multiple critical industries. 

The nation would find itself heavily reliant on imports to sustain its rail, construction, and automotive sectors. 

This dependence on external sources for essential materials would be particularly precarious given the prevailing global climate characterised by trade wars and geopolitical instability. 

Additionally, these factors could lead to disruptions in supply chains, price fluctuations, and potential shortages, all of which could have severe repercussions for the British economy and its industrial base.

Importance of domestic steel

Business minister Jonathan Reynolds emphasised the critical importance of domestic steel for the success of the government’s ambitious plans to modernise Britain’s aging infrastructure. 

He highlighted that key British industries, which are central to these revitalisation efforts, are heavily reliant on a consistent and reliable supply of domestically produced steel. 

This statement underscores the government’s commitment to supporting the domestic steel industry and recognizing its vital role in achieving broader national economic and infrastructure goals.

After receiving confirmation that the government has settled the payment for the fuel shipment, Reynolds will travel to the east coast port of Immingham. 

The shipment, which had originated from the United States, had been stored at the Immingham docks until the payment dispute was resolved. 

Reynolds’s visit to the port will coincide with the loading of the fuel for its onward transit, marking the final stage of this transaction.

In a positive turn of events, a separate vessel carrying crucial raw materials, namely coking coal and iron ore, has been released from Australia and is now en route to Britain. 

This development comes after the successful resolution of a legal dispute that had previously held up the shipment. 

The resolution involved a payment from the government, clearing the way for the much-needed resources to reach British shores.

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Shares in LVMH dropped 8% on Tuesday morning after the French luxury giant reported an unexpected fall in first-quarter sales, triggering a sharp reaction across the European luxury sector.

LVMH, which owns flagship brands including Louis Vuitton, Moët & Chandon and Hennessy, reported a 3% year-on-year decline in revenue for the first three months of the year, according to a trading update published after markets closed on Monday.

The results missed consensus analyst expectations, which had anticipated slight growth, and fell short even of the most conservative forecasts among institutional investors.

The downturn was led by a 9% plunge in the wines and spirits division, where sales of cognac—an iconic product in the group’s portfolio—declined amid softer demand from both the US and China.

The company attributed this partly to economic uncertainty but also to geopolitical tensions that have seen cognac caught in the crossfire of trade disputes.

Fashion and leather goods, traditionally LVMH’s most resilient segment, recorded a 5% revenue dip.

Watch sales were flat, offering no relief from the broader weakness in consumer appetite for luxury products.

Wider sector under pressure; Kering, Burberry, Richemont fall too

The disappointing figures from LVMH dragged down peers across the sector.

Shares in Kering, the parent company of Gucci, fell 2.5%, while British fashion house Burberry slipped 4.2%.

Richemont, known for Cartier and Montblanc, was down 2.26% in early trading. The broader European market, in contrast, traded higher, underscoring the specific pressure facing luxury firms.

Analysts at Citi said there was “not much to cheer” in LVMH’s earnings, noting that the results were “overall below the most conservative buyside expectations.”

They suggested it was hard to see a rebound in the second or third quarters given elevated uncertainty in the global economy.

Jefferies cut its target price on LVMH from 670 euros to 510 euros, pointing to ongoing demand softness and an unpredictable macro backdrop.

Trade instability clouds outlook despite pricing power

LVMH’s Chief Financial Officer Cecile Cabanis told analysts during a call that trade tensions were making it increasingly difficult to plan, with key variables “changing every hour.”

The comment came amid fresh uncertainty over US tariffs, following mixed signals from President Donald Trump on trade policy.

Luxury brands are generally seen as more insulated than mass-market retailers due to their pricing power and loyal customer base.

However, analysts have warned that the risk of a broader economic downturn—especially one sparked by tariffs—could dent even high-end demand, particularly in major markets like the US and China.

Bernstein analyst Luca Solca recenly sharply revised his forecast for global luxury sales, projecting a 2% decline this year compared to an earlier estimate of 5% growth.

He said the shift reflected a self-fulfilling cycle of market turmoil and weakening consumer sentiment.

Solca also downgraded his earnings forecast for the sector, now expecting average EBIT to fall between 4% and 6% compared to 2024.

Despite the gloom, he said luxury firms were still better placed than most to navigate a period of disruption.

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Singapore has officially entered election season as President Tharman Shanmugaratnam dissolved parliament on Tuesday, acting on the advice of Prime Minister Lawrence Wong.

The move sets the stage for the city-state’s 14th general election since gaining independence in 1965. Nomination Day has been scheduled for 23 April, after which candidates will kick off nine days of campaigning.

A cooling-off day will precede the polling date, which is expected to be announced shortly by the returning officer.

This election marks a pivotal moment for Singapore’s political landscape. It will be the first general election led by Prime Minister Wong, who succeeded Lee Hsien Loong in May 2024.

It also comes as the global economy faces mounting headwinds, including inflation, trade tensions, and domestic concerns about jobs and the cost of living.

Wong’s debut election as prime minister

Lawrence Wong took over as Singapore’s fourth prime minister in May after Lee Hsien Loong stepped down following two decades at the helm.

Wong’s People’s Action Party (PAP) has governed Singapore continuously since independence, and is expected to contest all 97 parliamentary seats.

Wong’s leadership will now face its first electoral test. The outcome could determine whether the PAP maintains its supermajority or contends with a stronger opposition presence in parliament.

His administration has so far focused on managing inflation, boosting social protections, and diversifying trade partnerships in response to global shifts.

In a ministerial statement delivered on 8 April, Wong expressed concern over new US tariffs. “We are very disappointed by the US move, especially considering the deep and longstanding friendship between our two countries,” he said.

The remarks reflect growing unease in the region as Donald Trump’s administration intensifies its protectionist trade agenda.

Economic backdrop

The general election also arrives amid a weakening economic backdrop. On Monday, Singapore’s central bank moved to ease monetary policy for the second consecutive time, signalling concern over stalling growth.

Authorities cited the increasing likelihood of zero GDP growth in 2025 after a weaker-than-expected expansion of 3.8% in the first quarter.

The Monetary Authority of Singapore (MAS) cited external uncertainties and weak global demand as key reasons for the policy shift. Core inflation remains elevated, but is expected to moderate in the second half of the year.

Singapore’s export-reliant economy is especially sensitive to global disruptions, including tariff shocks and supply chain reconfigurations.

Wong’s administration has responded by reinforcing social safety nets and extending wage support for select sectors. However, these measures may not be enough to ease voter anxiety about the rising cost of living and job security.

Key voter concerns in a shifting landscape

A January survey reported by CNA indicated that Singaporeans are increasingly concerned about day-to-day economic issues. Cost of living, job availability, and income security were cited as top voter priorities.

At the same time, there is growing political awareness among younger voters. Opposition parties, including the Workers’ Party and Progress Singapore Party, are expected to field candidates across most constituencies.

This could test the PAP’s traditional dominance, especially in urban districts where swing votes carry greater weight.

The campaign period will be closely watched both domestically and internationally. Investors and regional partners will be assessing how Singapore’s new leadership handles policy continuity, foreign relations, and economic recovery.

Global context

The geopolitical backdrop adds further complexity to the upcoming election. Donald Trump’s ongoing tariff offensive is rattling trade-dependent economies across Asia.

While Singapore has long enjoyed close ties with the US, friction has increased under Trump’s administration.

New tariffs targeting both allies and adversaries threaten to disrupt established trade routes. Singapore, as a hub for re-exports and global finance, is especially vulnerable to such shocks.

The country’s reliance on external demand means that maintaining stable international relations is crucial. Prime Minister Wong’s approach to diplomacy, as well as his economic policy mix, will be scrutinised during the campaign and beyond.

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