- US President Trump said we will see tariff details maybe Tuesday night or on Wednesday which are going to be nice in comparison to other countries and in some cases, they may be substantially lower.
- US President Trump is said to be still deciding which plan he will take for reciprocal tariffs and has been presented with "multiple" tariff plans, according to administration sources cited by FBN's Lawrence
- US Treasury Secretary Bessent said President Trump will announce reciprocal tariffs at 15:00EDT/20:00BST on Wednesday.
- APAC stocks traded mostly higher as markets recovered from the recent sell-off and with sentiment helped by data releases although gains were capped as tariff uncertainty persists heading into April 2nd 'Liberation Day' reciprocal tariffs.
- RBA maintained the Cash Rate at 4.10% as unanimously forecast and provided little clues for future policy.
- European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.4% after the cash market closed with losses of 1.6% on Monday.
- Looking ahead, highlights include EZ HICP (Flash), Unemployment, US ISM Manufacturing PMI & JOLTS, US Completion of the Trade Policy Review, Speakers including Fed’s Barkin, BoE's Greene, ECB’s Lagarde Lane & Cipollone, Supply from Germany.
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US TRADE
EQUITIES
- US stocks were mixed with risk sentiment choppy to start the week in which US equity futures were initially hit and T-notes supported following reports over the weekend that President Trump is pushing senior advisors to go big on tariffs, while a turnaround was seen after the Chicago PMI data topped all analysts' forecasts and with month/quarter-end also at play.
- As such, T-notes then retreated from highs and equities rebounded from lows, while oil prices rallied as participants digested recent threats by US President Trump to bomb Iran if they do not make a nuclear deal and to impose secondary tariffs on Russian oil over the war in Ukraine.
- SPX +0.55% at at 5,612, NDX -0.02% at 19,278, DJI +1.00% at 42,002, RUT -0.56% at 2,012.
- Click here for a detailed summary.
TARIFFS/TRADE
- US President Trump said we will see tariff details maybe Tuesday night or on Wednesday which are going to be nice in comparison to other countries and in some cases, they may be substantially lower. Trump also stated that many countries have been looting the US and they will stop that on April 2nd, as well as noted there will be investments worth USD 5tln in the US. Furthermore, he stated that TikTok is not tied to a larger tariff deal but could be.
- US President Trump is said to be still deciding which plan he will take for reciprocal tariffs and has been presented with "multiple" tariff plans, according to administration sources cited by FBN's Lawrence, while sources said Trump will likely not make the decision on which plan until right before April 2nd or on that morning.
- US Treasury Secretary Bessent said President Trump will announce reciprocal tariffs at 15:00EDT/20:00BST on Wednesday.
- White House Press Secretary Leavitt said Trump's tariffs will end unfair trade practices and the rest of the world will feel what the US public has felt, while she added that Trump tariffs will ensure reciprocity and that Trump is also focused on continuing tax cuts, according to Fox News. Furthermore, she stated there will be a Rose Garden event on Wednesday for the Trump tariff plan and that Trump is committed to sectoral tariffs, while the White House spokesperson said no exemptions at this time when asked about tariff exemptions for farmers and any country that has treated the US unfairly should expect to receive a tariff.
- US automakers seek to exclude low-value car parts from tariffs, according to Bloomberg.
- US State Department said Secretary of State Rubio spoke to his Mexican counterpart regarding the US automobile industry, while Rubio thanked Mexico for efforts to reduce illegal immigration and continuing to accept deportation flights.
- China's Foreign Minister Wang Yi said higher US tariffs on Chinese goods are unreasonable and harm global markets.
NOTABLE HEADLINES
- Fed’s Williams (voter) said it is early days in figuring out the impact of tariffs and there is still a lot of uncertainty about tariffs, while he added the details matter and will need to watch the data to measure the impact of tariffs. Williams also stated the full impact of tariffs can play out over a long horizon and that tariffs will impact prices.
- Fed's Barkin (2027 voter) said it's going to take a while before we get clarity on the tariff impact, while he added to cut rates you need confidence in inflation and the higher the inflation numbers, the less likely you'll see that, according to a CNBC interview. Barkin stated that suppliers are emboldened and they will have to pass on higher prices, while consumers noted they are tired of paying higher prices. Furthermore, Barkin said he is not convinced higher prices won't be passed on, or that there won't be inflation and stated data right now is okay but there is a risk on the employment side.
- US President Trump signed an executive order establishing the United States Investment Accelerator which establishes an office within the Department of Commerce meant to facilitate and accelerate investments above USD 1bln in the US, while the White House said the Investment Accelerator is to administer the CHIPS program office.
- US President Trump signed an executive order aimed at protecting fans from 'exploitative ticket scalping' and reforming the US live entertainment ticketing industry, according to Reuters.
- White House considers executive order to fast-track permitting for deep-sea mining in international waters, according to Reuters sources.
- US chip grants are reportedly in limbo as Commerce Secretary Lutnick pushes for more investment and signalled he could scrap past awards, according to Bloomberg.
APAC TRADE
EQUITIES
- APAC stocks traded mostly higher as markets recovered from the recent sell-off and with sentiment helped by data releases although gains were capped as tariff uncertainty persists heading into April 2nd 'Liberation Day' reciprocal tariffs.
- ASX 200 advanced with broad gains seen across sectors, while there was a muted reaction to the RBA rate decision in which the central bank maintained the Cash Rate at 4.10% as unanimously forecast and provided little clues for future policy.
- Nikkei 225 rallied at the open after data showed a decline in the Unemployment Rate and a mostly better-than-expected Tankan survey although the index then pulled back and gradually reversed the gains after failing to sustain a brief reclaim of the 36,000 level.
- Hang Seng and Shanghai Comp were underpinned after stronger-than-expected Chinese Caixin Manufacturing PMI data.
- US equity futures pulled back overnight following yesterday's intraday resurgence and as participants await incoming US tariffs.
- European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.4% after the cash market closed with losses of 1.6% on Monday.
FX
- DXY traded rangebound as participants braced for the ‘Liberation Day’ tariff announcement mid-week with President Trump noting that we could get tariff details maybe on Tuesday night or on Wednesday. Participants also look ahead to ISM and JOLTS data.
- EUR/USD just about remained afloat after recovering from a brief dip beneath the 1.0800 level but with upside capped as the bloc faces incoming US reciprocal tariffs and with several ECB speakers scheduled later today.
- GBP/USD clawed back some of the prior day's losses after rebounding from a brief dip beneath the 1.2900 handle, while there was little fresh catalyst for the UK to spur price action.
- USD/JPY steadily pulled back after failing to sustain the 150.00 level and as participants digested mostly better-than-expected data.
- Antipodeans were rangebound for most of the session although AUD/USD was mildly supported following RBA Governor Bullock's post-meeting press conference where she noted the board did not discuss a rate cut.
- PBoC set USD/CNY mid-point at 7.1775 vs exp. 7.2606 (Prev. 7.1782).
FIXED INCOME
- 10yr UST futures rebounded from the prior day's trough after sliding in the aftermath of strong Chicago PMI data and as Wall St sentiment improved, while there are few fresh drivers overnight ahead of upcoming data releases and 'Liberation Day' reciprocal tariffs.
- Bund futures remained contained after the recent slip beneath the 129.00 level with demand not helped by looming supply including the Schatz and Bund issuances scheduled for today and tomorrow, respectively.
- 10yr JGB futures were lacklustre following the prior day's selling pressure in global counterparts and after the latest data releases from Japan including a lower Unemployment Rate and the mostly better-than-expected BoJ Tankan survey.
COMMODITIES
- Crude futures took a breather after rallying yesterday owing to recent threats by President Trump aimed at Russian oil and Iran, while there were also reports of an Israeli airstrike on a Hezbollah in the southern suburbs of Beirut.
- Spot gold extended on record highs with demand for the precious metal facilitated by tariff uncertainty.
- Copper futures nursed some of yesterday's losses with prices helped by encouraging Chinese PMI data and as stock markets regained composure following the recent sell-off.
CRYPTO
- Bitcoin gained overnight amid the mostly positive risk sentiment and briefly returned to above the USD 83,000 level.
NOTABLE ASIA-PAC HEADLINES
- RBA kept the Cash Rate unchanged at 4.10%, as expected, while it stated the outlook remains uncertain, underlying inflation is moderating and sustainably returning inflation to target is the priority. RBA noted that monetary policy is well placed to respond to international developments if they were to have material implications for Australian activity and inflation, and noted that the board’s assessment is that monetary policy remains restrictive. Furthermore, it stated the continued decline in underlying inflation is welcome, but there are nevertheless risks on both sides and the board is cautious about the outlook, while the board needs to be confident that this progress will continue so that inflation returns to the midpoint of the target band on a sustainable basis.
- RBA Governor Bullock said in the post-meeting press conference there is a chance of more strength in the economy than seems and the board will continue to look at the data, while she said the board did not discuss a rate cut and holding rates was a consensus decision. Bullock also stated they have to be careful not to get ahead of themselves on policy and that the board has not made up its mind on a May move, while she said they are not endorsing the market path on future rate cuts. Furthermore, she said the board did not open the door to a May rate cut and there is more economic data to come, as well as updated forecasts for the May meeting.
- RBNZ said the Board is in the process of preparing a recommendation for the appointment of a Governor for six months and will be sending it to the minister soon, while it continues business as usual with Deputy Governor Christian Hawkesby as acting Governor and CEO until such time the minister makes an appointment.
DATA RECAP
- Chinese Caixin Manufacturing PMI Final (Mar) 51.2 vs. Exp. 51.1 (Prev. 50.8)
- Japanese Tankan Large Manufacturing Index (Q1) 12.0 vs. Exp. 12.0 (Prev. 14.0)
- Japanese Tankan Large Manufacturing Outlook (Q1) 12.0 vs. Exp. 9.0 (Prev. 13.0)
- Japanese Tankan Large Non-Manufacturing Index (Q1) 35.0 vs. Exp. 33.0 (Prev. 33.0)
- Japanese Tankan Large Non-Manufacturing Outlook (Q1) 28.0 vs. Exp. 29.0 (Prev. 28.0)
- Japanese Tankan Large All Industry Capex Estimate (Q1) 3.1% vs. Exp. 2.9% (Prev. 11.3%)
- Japanese Unemployment Rate (Feb) 2.4% vs. Exp. 2.5% (Prev. 2.5%)
GEOPOLITICS
MIDDLE EAST
- Israel is to reoccupy 25% of Gaza to press Hamas to release hostages, according to Axios.
- Israeli military said it attacked a Hezbollah target in Beirut's southern suburbs.
- Israeli security source said Egypt's military build-up in the Sinai Peninsula is a potential violation of the peace agreement and stated that "Egypt has deployed forces beyond the permitted quota, expanded port facilities, and extended runways at the airport”.
- IRGC seized two foreign tankers carrying over three million litres of smuggled diesel fuel, according to state media.
- Iran complained to the UN about reckless and belligerent remarks by US President Trump and said the remarks are a flagrant violation of international law and core principles of the UN Charter, according to a letter seen by Reuters. Iran said it is deeply regrettable and concerning that the US wields military power as its primary tool of coercion to advance political and geopolitical objectives, while it warned it will respond swiftly and decisively to any act of aggression or attack by the US or Israel against its sovereignty, territorial integrity or national interests.
- US President Trump said the Iran-backed Houthi terrorists have been decimated by the relentless strikes over the past two weeks and attacks will continue until they are no longer a threat to freedom of navigation. Trump added that "The choice for the Houthis is clear: Stop shooting at U.S. ships, and we will stop shooting at you. Otherwise, we have only just begun, and the real pain is yet to come, for both the Houthis and their sponsors in Iran".
- Houthi media reported US aggression on Kamaran Island in Hodeidah, Yemen with two raids, according to a translated Al Jazeera post on X.
RUSSIA-UKRAINE
- US President Trump said he wants to see Russian President Putin make a deal and wants to make sure Putin follows through, while Trump added he doesn't want to do secondary tariffs but noted secondary tariffs are something that he would do if Putin doesn't do the job.
CHINA-TAIWAN
- Chinese military conducted joint army, navy and rocket force exercises around Taiwan, while it stated that sinister moves of Taiwan separatists will cause disaster for themselves and called Taiwan President Lai a parasite in a video related to the drill.
- Taiwan senior officials noted that more than 10 Chinese military ships approached close to Taiwan's 24 nautical mile contiguous zone on Tuesday morning and Taiwan dispatched its own warships to respond, while Taiwan's presidential official strongly condemned China's military drills and said China is widely recognised by the international community as a troublemaker.
- De facto US embassy in Taiwan said it is closely monitoring China's military activity near Taiwan and that China has shown that it is not a responsible actor and has no problem putting the region’s security and prosperity at risk. It also stated the US will continue to support Taiwan in the face of China’s military, economic, informational, and diplomatic pressure campaign.
OTHER
- US President Trump responded that there is communication when asked about North Korea and commented that he will probably do something on North Korea.
- US Secretary of State Rubio said the US is taking steps to impose visa restrictions on Chinese officials substantially involved in policies related to access for foreigners to Tibetan areas.
- US sanctioned six Chinese and Hong Kong officials over actions to erode Hong Kong's autonomy.
LATAM
- Brazil's Finance Minister Haddad said the EU-Mercosur agreement offers little advantage for Mercosur and its value is mostly political.
