Morning Note: TSMC Booms Amid Trade Concerns; ECB Set to Ease; Aussie Jobs Recover

TSMC Set for 57% Profit Surge Amid U.S. Trade Pressure

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading producer of advanced chips for artificial intelligence, is expected to post a 57% year-on-year surge in first-quarter profit on Thursday. Analysts forecast net income to reach T$354.6 billion ($10.92 billion) for the quarter ended March 31. Despite the strong financial performance, the company will likely highlight potential risks stemming from trade-related policies under former U.S. President Donald Trump.

TSMC has aggressively invested in global expansion, committing billions of dollars to overseas production facilities. While reaffirming that most of the manufacturing will remain in Taiwan, the company recently announced a $100 billion investment in the U.S., unveiled alongside Trump at the White House. This comes in addition to the previously pledged $65 billion for three semiconductor plants in Arizona. However, tensions remain, as Trump recently warned that TSMC could face up to 100% tariffs if it does not localise more production in the United States.

(TSM Share Price, Source: Trading View)

From a technical analysis perspective, TSM's share price has been in a bearish trend since the end of January 2025, as indicated by a series of lower highs and lower lows. Recently, the price rebounded from the support zone of 130 – 135 and moved higher to retest the swap zone of 156 – 160 but was rejected. This confirmed bearish structure may lead the price to continue moving downward, potentially retesting the 130 – 135 support zone again.

Markets Brace for ECB's 25bp Easing Move

The European Central Bank (ECB) currently maintains its benchmark interest rate at 2.65%, but markets are bracing for a 25-basis point reduction to 2.40% in today’s decision, due at 12:15 GMT. This anticipated move comes amid persistent disinflationary pressures and softer macroeconomic indicators across the eurozone. Investors believe the ECB may now be compelled to shift towards a more accommodative stance to revive growth momentum and prevent stagnation.

(EUR/USD Daily Chart, Source: Trading View)

From a technical analysis perspective, the EUR/USD currency pair has been in a bullish trend since mid-January 2025, characterised by a series of higher lows and higher highs. Recently, the pair broke above the key swap zone between 1.1180 and 1.1210, signalling that bullish momentum remains strong. This confirmed bullish structure could potentially drive the pair higher, with a retest of the resistance zone at 1.1530 – 1.1560 likely.

Australia Jobs Rebound, RBA Still Seen Easing

Australian employment showed signs of resilience in March, bouncing back from February’s sharp decline. According to data from the Australian Bureau of Statistics, net employment increased by 32,200 jobs, recovering from a revised drop of 57,400 the month prior. Although the unemployment rate edged slightly higher from 4.0% to 4.1%, it remains broadly stable, hovering near its 12-month average.

The Reserve Bank of Australia (RBA) had not anticipated further weakening in the labour market and had forecast the jobless rate to peak at 4.2% during this cycle. While the latest figures suggest ongoing labour market strength, they are unlikely to obstruct the RBA’s broader policy trajectory, especially if broader economic conditions warrant further easing.

(AUD/USD Daily Chart, Source: Trading View)

From a technical analysis perspective, the AUD/USD currency pair is currently retesting the resistance zone of 0.6370 – 0.6400. This is a strong resistance area that has repeatedly prevented the pair from moving higher in the past. Therefore, a decisive break above this zone might be signalling the formation of a bullish structure. Conversely, if the pair fails to break above it, bearish momentum may resume, potentially pushing the pair lower.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.