- APAC stocks began the week on the front foot following last Friday's resurgence on Wall St and amid encouraging Chinese activity data.
- US Senate voted 54-46 to pass the stopgap funding bill to keep the government funded through September 30th.
- DXY is steady, EUR/USD remains on a 1.08 handle, JPY marginally lags, the rest of G10 FX is contained.
- Crude futures advanced at the open after the US conducted strikes against Houthi militant sites in Yemen.
- US President Trump said he will speak with Russia's President Putin on Tuesday and may have something to announce on Ukraine-Russia talks by Tuesday.
- European equity futures indicate a slightly positive cash market open with Euro Stoxx 50 futures up 0.1% after the cash market closed with gains of 1.4% on Friday.
- Looking ahead, highlights include US Retail Sales, ECB’s Lagarde and earnings from Hargreaves Lansdown.
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US TRADE
EQUITIES
- US stocks caught a bid on Friday to atone for the recent rout that saw the S&P 500 enter correction territory the day before, while all major indices posted strong gains and all sectors were in green with outperformance in Tech, Energy and Financials. Furthermore, risk appetite was initially buoyed amid strength in China following hopes of a PBoC RRR cut and the strong sentiment persisted throughout the US session with no fresh trade/tariff updates on Friday to derail the recovery.
- SPX +2.13% at 5,639, NDX +2.49% at 19,705, DJI +1.65% at 41,488, RUT +2.53% at 2,044.
- Click here for a detailed summary.
TARIFFS/TRADE
- US President Trump said he has no intention of creating exemptions on steel and aluminium tariffs, while he added that he will impose reciprocal and sectoral tariffs on April 2nd.
- US Secretary of State Rubio said they will potentially engage in bilateral negotiations with countries on new trade arrangements once tariffs are imposed.
- Canada’s Defence Minister said they are reconsidering F-35 purchases amid tensions with Washington and are having conversations with other fighter jet makers.
- Companies urged in a joint letter to EU Commission President von der Leyen for "Buy European" policies in public procurement.
NOTABLE HEADLINES
- US Senate voted 54-46 to pass the stopgap funding bill to keep the government funded through September 30th, while President Trump signed the budget appropriations bill into law.
- US President Trump’s administration was reportedly considering a new travel ban that would impact 43 countries, with a draft plan developed by the State Department several weeks ago.
- US Treasury Secretary Bessent said he’s not worried about the recent downturn that’s wiped trillions of dollars from the equities market, while he stated that markets will do great over the long term if they put good tax policy in place, deregulation and energy security, according to NBC’s Meet The Press.
- US President Trump invoked the Alien Enemies Act against Tren De Aragua which he declared is attempting and threatening invasion against the US, while he said any Venezuelans aged 14 or older who are TDA members and not US citizens or lawful permanent residents are liable to be “apprehended, secured and removed as alien enemies”.
APAC TRADE
EQUITIES
- APAC stocks began the week on the front foot following last Friday's resurgence on Wall St and amid encouraging Chinese activity data but with gains capped owing to geopolitical tensions after the US conducted strikes on Yemen's Houthis and with participants awaiting this week's central bank decisions.
- ASX 200 gained with the advances led by notable strength in the commodity-related sectors and following encouraging data from Australia's largest trading partner.
- Nikkei 225 climbed at the open despite the lack of obvious catalysts, while Japan's largest labour union anticipates an average 5.46% wage increase this year which would surpass 5% for the second consecutive year and would be the highest in 34 years but is still below the union's 6.09% pay increase demand.
- Hang Seng and Shanghai Comp were positive with sentiment underpinned following recent support pledges and after encouraging Chinese activity data in which Industrial Production topped forecasts and Retail Sales matched estimates. However, gains in the mainland were limited as data also showed an increase in Urban Unemployment and House Prices remained in deep contraction territory.
- US equity futures (ES -0.5%, NQ -0.6%) were mildly pressured at the reopen amid geopolitical concerns after the US conducted air strikes against Houthis in Yemen and told Iran to end support for Houthis immediately.
- European equity futures indicate a slightly positive cash market open with Euro Stoxx 50 futures up 0.1% after the cash market closed with gains of 1.4% on Friday.
FX
- DXY traded rangebound following the lack of any major tariff-related developments from over the weekend and after the US averted a government shutdown, while participants also lacked commitment ahead of this week's busy central bank schedule including the FOMC on Wednesday.
- EUR/USD flatlined beneath the 1.0900 handle amid light pertinent newsflow outside of geopolitics.
- GBP/USD lacked direction in a quiet start to the week ahead of Thursday's jobs data and BoE meeting.
- USD/JPY was initially choppy amid the absence of Japanese data and with the BoJ policy decision due mid-week but eventually gained in tandem with advances in stocks.
- Antipodeans held on to Friday's spoils and benefitted from the mostly positive risk environment.
- PBoC set USD/CNY mid-point at 7.1688 vs exp. 7.2199 (Prev. 7.1738)
FIXED INCOME
- 10yr UST futures lacked demand in the absence of fresh pertinent catalysts and with participants awaiting this week's central bank policy decisions including from the Fed, BoJ and BoE.
- Bund futures traded sideways after a weekend of very little EU-specific macro newsflow.
- 10yr JGB futures advanced despite the mostly positive risk environment and Japan's largest labour union Rengo anticipating the highest base pay increase in more than three decades.
COMMODITIES
- Crude futures advanced at the open amid heightened geopolitical and shipping risks in the Red Sea after the US conducted strikes against Houthi militant sites in Yemen, while the Houthis said naval operations would continue until the Gaza blockade is lifted and aid is let in.
- Iraq agreed to double electricity imports from Turkey.
- Spot gold was rangebound after pulling back from a brief but historic climb above the USD 3,000 level.
- Copper futures lacked demand and failed to benefit from the mostly positive risk environment and stronger-than-expected Chinese Industrial Production data.
CRYPTO
- Bitcoin gained overnight following the choppy performance over the weekend and gradually extended above USD 83,000.
NOTABLE ASIA-PAC HEADLINES
- PBoC detailed measures to improve the quality and efficiency of financial services and will grow the financial ecosystem that supports tech innovation, while state media reported that China should choose the right timing and strength for monetary easing.
- China’s State Council released a special action plan to boost domestic consumption which includes measures to increase residents’ income, pensions and wages, as well as establishing a childcare subsidy scheme and increasing revenue from land reform including rural areas.
- China’s NDRC said it is to encourage foreign investment in technology and manufacturing with the state planner to release an expanded list of industries it seeks to attract foreign investment in.
- China's stats bureau spokesperson said China's economy remains resilient but achieving the 2025 growth target will not be easy and the external environment is becoming more complex and severe. The spokesperson added that China's property market faces some pressures, despite signs of stabilising but they expect China's consumer prices to improve further and expect Q1 economic operations to be steady. Furthermore, it was stated that macroeconomic policies will provide more support for the economy and the employment situation remains largely stable with the rise in the February jobless rate still within normal ranges.
DATA RECAP
- Chinese Industrial Production YY (Feb) 5.9% vs. Exp. 5.3% (Prev. 6.2%)
- Chinese Retail Sales YY (Feb) 4.0% vs. Exp. 4.0% (Prev. 3.7%)
- Chinese Unemployment Rate Urban Area (Feb) 5.4% (Prev. 5.1%)
- Chinese China House Prices MM (Feb) -0.1% (Prev. 0.0%)
- Chinese China House Prices YY (Feb) -4.8% (Prev. -5.0%)
GEOPOLITICS
MIDDLE EAST
- US President Trump ordered the US military to launch ‘decisive and powerful’ military action against Houthis in Yemen and told Iran to end support for Houthis immediately, while the Pentagon said US strikes against Houthis will last days or weeks., Furthermore, it was later reported that the death toll from the US attacks on Yemen reached 53.
- US Defence Secretary Hegseth said the US campaign will be unrelenting, while he added that Iran has been enabling the Houthis far too long and they better back off.
- US Secretary of State Rubio commented that the US military campaign in Yemen will go on until the Houthis no longer have the capability to strike ships and said there is no way Houthis would have the ability to attack shipping unless they had support from Iran.
- US Secretary of State Rubio spoke with Russian Foreign Minister Lavrov on Saturday and told him about US operations against Houthis, while Lavrov stressed the need for an immediate cessation of the use of force against Yemen Houthis and said it is important for all parties to engage in political dialogue in order to find a solution that avoids further bloodshed, according to Reuters.
- Yemen’s Houthis said naval operations will continue until the Gaza blockade is lifted and aid is let in, while the group said it targeted a US aircraft carrier with ballistic missiles and drones in the Red Sea but showed no proof, according to Reuters.
- Iranian Revolutionary Guards top commander Salami said Tehran will respond decisively and destructively to any enemy taking threats into action and noted that Yemen’s Houthis take strategic and operational decisions on their own, according to state media.
- Israeli air strike killed nine in Gaza amid ceasefire disputes. It was separately reported that the Israeli PM’s office said Israel will continue Gaza ceasefire talks in accordance with the US proposal for the immediate release of 11 living hostages and half of the dead. Furthermore, an Israeli delegation was in Egypt discussing hostages with senior Egyptian officials and PM Netanyahu moved to dismiss the head of the Shin Bet security service, according to the PM’s office cited by Reuters.
- Syria’s military fired rockets and shells at Lebanon on Sunday after accusing Iran-backed Hezbollah of executing three Syrian army personnel, according to Bloomberg.
RUSSIA-UKRAINE
- Ukrainian President Zelensky said Ukraine’s partners must define a clear position on security guarantees and the path to peace must begin unconditionally, while he added there must be a foreign troop contingent based on Ukraine soil as part of a peacekeeping arrangement and the question of territory is complex and should be discussed later.
- Russian Defence Ministry said Russia will demand Kyiv's neutral status and NATO's refusal to accept Ukraine in a peace treaty on Ukraine, while Russia opposes any troops in Ukraine as part of post-conflict guarantees, not just NATO troops. Furthermore, it was stated that the issue of unarmed observers as part of post-conflict international support for Ukraine may be discussed only once a peace treaty is worked out.
- US President Trump said he will be speaking with Russia's President Putin on Tuesday and may have something to announce on Ukraine-Russia talks by Tuesday. Trump added that land and power plants are the focus of talks toward a Russia-Ukraine deal and they are already talking about "dividing up certain assets" between the two sides.
- US President Trump said it feels like Russia is going to make a deal with them and stated that they had pretty good news coming out of Russia. Trump also announced that General Kellogg was appointed as Special Envoy to Ukraine and will no longer be an envoy to Russia.
- US envoy Witkoff said differences between Ukraine and Russia have narrowed and they had positive discussions with Russian President Putin, while Witkoff said he expects Trump and Putin to speak this week and that US negotiating teams will meet with Ukrainians this week and will also meet with Russians.
- UK PM Starmer said following a meeting with world leaders that they reaffirmed commitment to Ukraine’s long-term security and agreed that Ukraine must be able to defend itself and deter future Russian aggression, while they agreed military planners would convene again in the UK this week to progress practical plans for how militaries can support Ukraine’s future security. Furthermore, Starmer said they will accelerate military support, tighten sanctions on Russia’s revenues and will continue to explore all lawful routes to ensure that Russia pays for the damage it has done to Ukraine, as well as commented that Putin’s response to the ceasefire proposal is not good enough.
- Russia launched an air attack on Ukraine's capital of Kyiv and the Russian Defence Ministry said its forces retook control of two settlements in Russia’s Kursk region.
- Ukrainian drone attack targeted energy facilities in Russia's Astrakhan region and sparked a fire, according to the regional governor.
OTHER
- Azerbaijan’s Defence Ministry said Armenian forces opened fire on Azeri positions on Sunday, while Armenia’s Defence Ministry said the statement by Azerbaijan does not correspond to reality.
- North Korea said its nuclear forces will 'exist forever' and criticised G7 states for nuclear hegemony, while it will steadily update and strengthen its nuclear armed forces and said demand by G7 for North Korea to abandon nuclear weapons is a provocation. It was also reported that North Korea condemned the US deployment of additional stealth fighter jets to Japan, according to KCNA.
EU/UK
NOTABLE HEADLINES
- UK Chancellor Reeves is to pledge to change the law to restrict merger investigations by the Competition and Markets Authority, according to FT.
- Britain’s largest regulators will be given performance reviews by ministers and set targets for cutting red tape and growing the economy, according to The Times.
- Moody’s raised Greece’s sovereign rating from Ba1 to Baa3; Outlook revised to Stable from Positive and affirmed Spain at A; Outlook Stable. It was also reported that Fitch affirmed France at AA-; Outlook Negative, affirmed Portugal at A-; Outlook Positive, and affirmed Poland at A-; Outlook Stable.
DATA RECAP
- UK Rightmove House Prices MM (Mar) 1.1% (Prev. 0.5%)
- UK Rightmove House Prices YY (Mar) 1.0% (Prev. 1.4%)
