- US stocks were choppy and most indices closed in the red albeit off their earlier lows in what was a headline-intensive day with the attention on President Trump's tariff threats in which he initially instructed the Commerce Secretary to impose an additional 25% tariff, to 50%, on all steel and aluminium coming into the US from Canada from March 12th although he later backed down from this threat after Ontario's Premier announced they are suspending the 25% surcharge on exports of electricity. Furthermore, there was a slight improvement in risk sentiment during the US afternoon following the joint US/Ukraine statement on a ceasefire proposal with Ukraine willing to accept a 30-day US-brokered ceasefire.
- USD was pressured as EUR strength, growing trade tensions, and fears over the economy weighed. US drivers included President Trump's tariff rhetoric in which he threatened to add a 25% tariff to impending tariffs (for a total 50% tariff) on all steel and aluminium coming into the US from Canada starting on Wednesday citing Canada's 25% tariff on electricity as the reason behind his decision and warned he "will substantially increase" the tariffs on cars coming into the US on April 2nd, "If other egregious, long time Tariffs are not likewise dropped by Canada". However, the Ontario Premier later announced they will suspend the 25% surcharge on exports of electricity which resulted in Trump effectively backing down on 50% tariffs on Canadian steel and aluminium, while the attention turns to the incoming US CPI data on Wednesday.
- Looking ahead, highlights include South Korean Unemployment Rate, Japanese PPI & BSI Large Manufacturing Index, US 25% Tariffs on Steel and Aluminium Take Effect, Supply from Australia & Japan.
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LOOKING AHEAD
- Highlights include South Korean Unemployment Rate, Japanese PPI & BSI Large Manufacturing Index, US 25% Tariffs on Steel and Aluminium Take Effect, Supply from Australia & Japan.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks were choppy and most indices closed in the red albeit off their earlier lows in what was a headline-intensive day with the attention on President Trump's tariff threats in which he initially instructed the Commerce Secretary to impose an additional 25% tariff, to 50%, on all steel and aluminium coming into the US from Canada from March 12th although he later backed down from this threat after Ontario's Premier announced they are suspending the 25% surcharge on exports of electricity. Furthermore, there was a slight improvement in risk sentiment during the US afternoon following the joint US/Ukraine statement on a ceasefire proposal with Ukraine willing to accept a 30-day US-brokered ceasefire.
- SPX -0.76% at 5,572, NDX -0.28% at 19,377, DJI -1.14% at 41,433, RUT +0.22%.
- Click here for a detailed summary.
TARIFFS/TRADE
- US President Trump posted on Truth Social regarding Canada in which he stated "Why would our Country allow another Country to supply us with electricity...They will pay a financial price for this so big that it will be read about in History Books for many years to come!".
- US President Trump posted on Truth Social that with Canada placing a 25% tariff on electricity coming into the US, he has instructed the Secretary of Commerce to add an additional 25% tariff, to 50%, on all steel and aluminium coming into the US from Canada from March 12th. Trump added that if other egregious, long-time tariffs are not likewise dropped by Canada, he will substantially increase the tariffs on cars coming into the US on April 2nd which will essentially shut down the automobile manufacturing business in Canada. However, Trump later said he respects Ontario's decision to suspend the 25% energy surcharge, while he was looking at backing down on the 50% duties on Canada and may back off doubling steel and aluminium Canada tariffs. Trump also commented that he will probably make a different tariff decision and said 'I'll let you know' if 50% tariffs on Canada are going into effect.
- US White House trade advisor Navarro said no 50% steel and aluminium tariffs on Canada tomorrow and that cooler heads prevailed with the Ontario Premier, according to CNBC. White House also confirmed that the 25% steel and aluminium tariff begins at midnight.
- Paperwork raising tariffs on Canada has not been signed, according to a CNBC citing a senior administration official, while it was noted that this remains a threat, rather than an action until that paperwork is prepared and signed.
- US administration is reportedly sticking to the line that there will not be any exceptions or exemptions to the 25% tariffs on aluminium and steel, according to WSJ citing sources.
- Canadian PM-designate Carney said US President Trump's escalation is an attack on the country's workers and he will ensure its response has maximum impact in the US, while he reiterated that he would maintain tariffs on the US until Americans show them respect.
- Canadian Finance Minister spokesperson said if the US moves ahead with imposition of tariffs on March 12th, they will be ready to respond firmly and proportionately.
- Ontario Premier Ford said Ontario and Canada will not back down until US President Trump's tariffs are gone for good, while Ontario’s Premier said he will not hesitate to cut off power supplies to the US if need be and the only successful outcome is if tariffs are off completely. However, it was later reported that the Ontario Premier said they are suspending the 25% surcharge on exports of electricity and that Commerce Secretary Lutnick agreed to meet with Ford on Thursday and will discuss a renewed USMCA ahead of the April 2nd deadline.
- Alberta’s Energy Minister wants to de-escalate the trade dispute with the US and respects what Ontario has done but said it is not the approach for Alberta.
- Brazil asked the US to postpone the deadline for the 25% tariff on Brazilian steel and aluminium imports, which is scheduled to take effect this Wednesday, according to O Globo sources.
- UK official said the UK government will not respond to US steel tariffs and is continuing to engage with the US to get an exemption on steel tariffs.
NOTABLE HEADLINES
- Fed's Bowman is said to be the front-runner for Vice Chair of Bank Supervision, according to WSJ.
- US President Trump said the US economy is going to 'blow it away' and said the US 'had to do this' referring to tariffs and have to get workers back and factories open, while he added markets are going to go up and down but have to rebuild the country. Trump also said he does not see a recession at all and the country is going to boom, while the market sell-off doesn't concern him. Furthermore, he thinks “some people are going to make great deals by buying stocks and bonds and all the things they're buying.”
DATA RECAP
- US JOLTS Job Openings (Jan) 7.74M vs. Exp. 7.63M (Prev. 7.6M, Rev. 7.508M)
FX
- USD was pressured as EUR strength, growing trade tensions, and fears over the economy weighed. US drivers included President Trump's tariff rhetoric in which he threatened to add a 25% tariff to impending tariffs (for a total 50% tariff) on all steel and aluminium coming into the US from Canada starting on Wednesday citing Canada's 25% tariff on electricity as the reason behind his decision and warned he "will substantially increase" the tariffs on cars coming into the US on April 2nd, "If other egregious, long time Tariffs are not likewise dropped by Canada". However, the Ontario Premier later announced they will suspend the 25% surcharge on exports of electricity which resulted in Trump effectively backing down on 50% tariffs on Canadian steel and aluminium, while the attention turns to the incoming US CPI data on Wednesday.
- EUR outperformed and reclaimed the 1.0900 status after Germany's Green party co-leader stated they are hopeful of a defence deal this week, while reports that Portugal's government collapsed following a no-confidence vote did little to derail the single currency.
- GBP benefitted from the dollar weakness and reclaimed the 1.2900 status amid light UK-specific catalysts.
- JPY was choppy but ultimately underperformed against the dollar owing to higher US yields.
FIXED INCOME
- T-notes were sold as risk sentiment briefly improved halfway through the Wall St trading session on mixed tariff messaging and Russia-Ukraine ceasefire hopes.
COMMODITIES
- Oil prices were choppy and settled with marginal gains but with the upside amid the flimsy risk appetite, while the latest EIA STEO maintained its world oil demand forecast for 2025 but slightly raised the view for 2026.
- EIA STEO stated EIA sees 2025 world oil demand of 104.1mln BPD (prev. 104.1mln BPD) and sees 2026 demand of 105.3mln BPD (prev. 105.2mln).
GEOPOLITICAL
MIDDLE EAST
- Israel and Lebanon agreed to open negotiations to resolve the disputes on the land border between the two countries, according to a senior US official cited by Axios's Ravid.
- Iran’s President said he won’t negotiate with US President Trump under threats and stated 'do whatever the hell you want', according to state media.
RUSSIA-UKRAINE
- US State Department said regarding the Jeddah meeting that the US and Ukraine took important steps toward restoring durable peace for Ukraine and Ukraine expressed readiness to accept the US proposal to enact an immediate and interim 30-day ceasefire. Furthermore, the US will immediately lift the pause on intelligence sharing and resume security assistance to Ukraine.
- US President Trump said regarding Ukraine that they now have to talk to Russia and hopefully Russian President Putin will agree on the plan, while he said they are going to meet with Russia later on today or tomorrow and would invite Zelensky back to the White House. Furthermore, Trump said he will talk to Russian President Putin, but added it takes "two to tango" and thinks he will talk with him this week, while he hopes to have a total ceasefire in the coming days.
- US Secretary of State Rubio said the ball is now in Russia's court on Ukraine peace, while he added that Ukraine has taken a positive step and hopes Russians will reciprocate.
- US National Security Adviser Waltz said Ukraine has made concrete proposals and talks got into substantive details on how the Ukraine war will end, while he will speak to his Russian counterpart in the coming days.
- Ukrainian President Zelensky thanked the US team for constructive talks in Saudi Arabia and said the ceasefire proposal covers the frontline, not just air and sea exclusively.
- Ukrainian President Zelensky's top aide said a ceasefire proposal will show if Russia wants peace or not and different options for security guarantees were discussed with the US. It was earlier reported that Ukraine was ready to sign a minerals deal, partial ceasefire (air & sea) and willing to have progress, according to Fox News citing a member of the delegation in Saudi.
- Ukrainian army announced targeting Russian oil facilities in Moscow and Oryol, according to Sky News Arabia.
- Russian President Putin has no intention to compromise on demands on land, peacekeepers and Ukraine’s neutrality in any peace talks, according to Bloomberg citing Western security officials. Furthermore, an official added that Putin is prepared to continue fighting if he doesn’t get his goals.
- Russia's Foreign Ministry does not rule out contacts with US representatives over the next few days, according to RIA. It was earlier reported that the Russian Foreign Ministry said Ukraine's drone attack on Russia was preplanned and was timed to coincide with US-Ukraine talks in Saudi Arabia, while it added that all countries that continue to pump Ukraine with weapons are to blame for this attack.
OTHER
- Polish Defence Minister said Poland is open to the French offer of extending the nuclear umbrella but needs details.
ASIA-PAC
NOTABLE HEADLINES
- UK Chinese Embassy spokesperson said regarding UK Foreign Minister Lammy’s South China Sea comments, that they urge the UK to stop heightening antagonism and sowing discord.
- China’s securities regulator said they will consolidate the momentum of market stabilisation and will support the listing of high-quality tech companies yet to turn a profit.
- BoJ said financial institutions have sufficient capacity to absorb losses and smooth functioning of financial intermediation has been maintained even amid global changes in financial and economic conditions.
- Japan's Government Pension Investment Fund decided not to raise the stock ratio in its USD 1.75tln portfolio and will maintain the principle of investing 50% of its portfolio in stocks in and after fiscal 2025, according to Nikkei.
EU/UK
NOTABLE HEADLINES
- UK minister is in ‘active discussions’ with pension funds to invest more in private markets, according to FT.
- Portugal's Parliament rejected the motion of confidence in the centre-right government, causing its collapse.
- ECB's Rehn said Europe needs common solutions to boost defence, while he added the Eurosystem's forecast and indicators of core inflation suggest that it will align with the 2% target. Rehn also said if the data so indicates, they would hold interest rates in April, while he added the US economy slowing would slowly pose a risk to Euro area growth and inflation.
- EU leaders want to double down on cutting back red tape, lowering energy prices and unlocking private savings to jumpstart the bloc’s economy, according to a draft joint statement dated March 10th and seen by POLITICO.
