- US stocks were choppy but ultimately finished with a positive bias in which the SPX and NDX gained and the DJIA and RUT closed flat after risk sentiment was boosted by CNBC's Megan Casella who reported that there are three main tariff options that President Trump is looking at with a blanket 20% tariff the less likely of the options compared with a tiered system of three different rates and a country-by-country approach on rates. As such, the hopes for less aggressive tariffs spurred risk appetite and helped stocks recover from the initial pressure seen from soft data releases including a dismal ISM Manufacturing report and the miss on JOLTS data.
- USD was ultimately little changed after a choppy session with soft data releases and as participants continued to await 'Liberation Day' tariffs on Wednesday with President Trump reportedly looking at three main options which are blanket 20% tariffs, a tiered system of three different rates and country-by-country rates although an official noted blanket 20% tariffs was the less likely option, while the report added that Canada and Mexico fentanyl tariffs are expected to be lifted.
- Looking ahead, highlights include New Zealand Building Permits, Australian AIG Indexes & Building Approvals, South Korean CPI, Comments from RBA's Kent, Supply from Australia.
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LOOKING AHEAD
- Highlights include New Zealand Building Permits, Australian AIG Indexes & Building Approvals, South Korean CPI, Comments from RBA's Kent, Supply from Australia.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks were choppy but ultimately finished with a positive bias in which the SPX and NDX gained and the DJIA and RUT closed flat after risk sentiment was boosted by CNBC's Megan Casella who reported that there are three main tariff options that President Trump is looking at with a blanket 20% tariff the less likely of the options compared with a tiered system of three different rates and a country-by-country approach on rates. As such, the hopes for less aggressive tariffs spurred risk appetite and helped stocks recover from the initial pressure seen from soft data releases including a dismal ISM Manufacturing report and the miss on JOLTS data.
- SPX +0.38% at 5,633, NDX +0.82% at 19,436, DJI -0.03% at 41,990, RUT +0.02% at 2,012.
- Click here for a detailed summary.
TARIFFS/TRADE
- US President Trump is reportedly looking at three main options which are blanket 20% tariffs, a tiered system of three different rates and country-by-country rates, according to CNBC's Megan Casella, while an official said the first option was "less likely than the other two" and the 'goal' is country-based tariffs. Furthermore, it was reported that pharma, semiconductor and other tariffs would be announced later, while Canada and Mexico fentanyl tariffs are expected to be lifted and secondary tariffs on Venezuela are to go into effect.
- US President Trump commented they are making progress to end the fentanyl crisis and that Senate Republicans must vote to keep the fentanyl national emergency in place.
- White House Press Secretary Leavitt said US President Trump was with the trade and tariff team, while she added car tariffs go into effect on April 3rd and that Trump has made up his mind on tariffs. Leavitt said reciprocal tariffs will take effect immediately after the announcement and that a few countries have called to discuss tariffs.
- White House said US President Trump is to deliver remarks in the Rose Garden at 21:00BST/16:00EDT on Wednesday.
- Drugmakers are pressing the Trump Administration for phased tariffs to mitigate the impact of a 25% charge, according to Reuters citing sources although drugmakers do not expect industry-specific tariffs on pharmaceuticals to be announced on Wednesday.
- Canadian PM Carney and Mexican President Sheinbaum held a phone call on trade and discussed the importance of building an investment and trading relationship between the two countries, while Carney highlighted a plan to fight "unjustified" trade actions in the call.
- EU Commission President von der Leyen said the bloc has the power to push back against US tariffs and all instruments are on the table for countermeasures, while the EU is open to negotiations on trade.
- EU is mulling targeting big US tech firms in response to Trump tariffs, according to The Washington Post citing sources/officials, while an official suggested that the bloc could unite on "some partial measures against American services".
- Israel eliminated tariffs on American goods, according to the Israeli PM’s office.
NOTABLE HEADLINES
- Fed's Barkin (2027 voter) said the bond market is pricing in more recession risk and Fed's 2019 framework does not feel contemporary, while he added that tariffs are to present challenges to inflation and employment.
- US President Trump said they are making progress to end the fentanyl crisis and Senate Republicans must vote to keep the fentanyl national emergency in place.
- US President Trump is planning an executive order that would ease rules that limit weapons exports which could be announced as soon as Tuesday or Wednesday, according to Reuters citing sources.
- OpenAI's Altman said can expect new releases from OpenAI to be delayed.
DATA RECAP
- US ISM Manufacturing PMI (Mar) 49.0 vs. Exp. 49.5 (Prev. 50.3)
- US ISM Manufacturing New Orders Index (Mar) 45.2 (Prev. 48.6)
- US ISM Manufacturing Employment Index (Mar) 44.7 (Prev. 47.6)
- US ISM Manufacturing Prices Paid (Mar) 69.4 vs. Exp. 65.0 (Prev. 62.4)
- US Construction Spending MM (Feb) 0.7% vs. Exp. 0.3% (Prev. -0.2%, Rev. -0.5%)
- US JOLTS Job Openings (Feb) 7.568M vs. Exp. 7.616M (Prev. 7.74M, Rev. 7.762M)
- Atlanta Fed GDPNow (Q1 25): -3.7% (Prev. -2.8% on March 28th)
FX
- USD was ultimately little changed after a choppy session with soft data releases and as participants continued to await 'Liberation Day' tariffs on Wednesday with President Trump reportedly looking at three main options which are blanket 20% tariffs, a tiered system of three different rates and country-by-country rates although an official noted blanket 20% tariffs was the less likely option, while the report added that Canada and Mexico fentanyl tariffs are expected to be lifted.
- EUR lagged and retreated beneath the 1.0800 handle against the dollar following weak PMI figures and as tariffs loom with the EU said to be mulling targeting big US tech firms in response to Trump tariffs, while EU Commission President von der Leyen said the bloc has the power to push back against US tariffs and all instruments are on the table for countermeasures.
- GBP returned to flat territory after GBP/USD recovering from a brief retreat beneath the 1.2900 handle and with comments from BoE's Greene doing little to spur price action in which she noted that slack is opening up in the UK labour market and is happy with the central forecast for inflation.
- JPY mildly gained against the dollar with USD/JPY choppy after slipping beneath the 150.00 level amid softer US yields.
FIXED INCOME
- T-notes settled higher and treasuries bull flattened although were off post-data peaks as risk sentiment improved on less aggressive tariff hopes.
COMMODITIES
- Oil prices settled marginally with trade kept within tight ranges as participants await 'Liberation Day' on Wednesday, while sources noted the eight members of OPEC+ that have been making voluntary oil output cuts will meet on Thursday and OPEC+ is not expected to change its plan to gradually raise its oil output from April.
- US Private Energy Inventory Data (bbls): Crude +6.0mln (exp. -2.1mln), Distillate -0.0mln (exp. -1.0mln), Gasoline -1.6mln (exp. -1.7mln), Cushing +2.2mln.
- OPEC+ is not expected to change its plan to gradually raise its oil output from April, according to Reuters sources. It was also reported that the OPEC+ eight-member meeting on Thursday is to review plans for some members to make additional output cuts to compensate for pumping above their quotas, while OPEC reduced oil output last month by 110k BPD to 27.43mln BPD.
- Kazakhstan will have to start reducing oil production within days as the CPC pipeline reduces intake and CPC repairs will take more than a month, according to Reuters sources.
- Venezuela's exports of crude and fuel fell 11.5% in March as tariffs and sanctions led to delays and cargo suspensions, according to Reuters citing vessel tracking data.
GEOPOLITICAL
MIDDLE EAST
- Israel’s army issued evacuation warnings for the third time to residents of areas in Rafah, according to Sky News Arabia.
- US President Trump said his phone call with Egyptian President El-Sisi went very well and they discussed numerous topics including the progress made against the Houthis, while they also discussed Gaza, and possible solutions and military preparedness, etc.
- US issued fresh Iran-related sanctions which target six entities and two individuals based in Iran, UAE and China.
- Iranian Supreme Leader's adviser said Iran will develop a nuclear bomb if US President Trump attacks, according to The Telegraph.
RUSSIA-UKRAINE
- US President Trump believes Russian President Putin is stalling and the administration is eyeing aggressive sanctions enforcement including on the Russian ‘shadow fleet', according to a post on X by Fox News's Jacqui Heinrich. Furthermore, a source familiar with the discussions said President Trump is frustrated with Putin and believes Russia is “slow-rolling comprehensive ceasefire talks”.
- White House Press Secretary said that US President Trump is frustrated with leaders on both sides of the Ukraine war.
- Ukrainian President Zelensky said Ukraine is ready for an unconditional ceasefire and has already demonstrated this, while he will meet on Friday with a small circle of countries ready to contribute to foreign troop contingent in Ukraine and he urged the US to boost sanctions on Russia.
- Russia cannot accept US ideas as they are right now as they do not take account of Moscow's need for the root causes of the crisis to be addressed and the issues need to be overcome, according to RIA.
- Russia’s Kremlin said Russia is continuing contacts with the US side when asked about the risk of secondary sanctions on Russian oil, while it also stated that work involving a potential Ukrainian peace settlement is "very complex".
- Russian Foreign Minister Lavrov said Russian and US officials plan new meeting, according to Bloomberg.
ASIA-PAC
NOTABLE HEADLINES
- China's financial regulator released an action plan for the banking and insurance industry to support the development of science and tech, while it encourages eligible banking institutions to establish a dedicated credit approval mechanism for tech loans and encourages banks to increase credit loans and medium-long term loans to technology-based enterprises.
- Some Chinese banks have reportedly started raising interest rates amid growing bad consumer loans, weeks after cutting rates, while the move is expected to weigh on Beijing's efforts to stimulate the economy, according to Reuters sources.
- US President Trump will consider a final proposal for TikTok on Wednesday and his administration is finalising plans for potential investors that could include Blackstone (BX) and Oracle (ORCL), according to CBS News.
- Chinese Foreign Minister Wang Yi said Chinese President Xi and Russian President Putin are to have an important exchange this year.
EU/UK
NOTABLE HEADLINES
- BoE's Greene said slack is opening up in the UK labour market and she is happy with the central forecast for inflation and noted disinflation continues to be underway. Furthermore, she stated there is a risk that productivity growth recovery does not happen as the BoE assumes.
- ECB's Rehn said if the data verifies the baseline, the right reaction in monetary policy should be to cut in April, according to Politico.
DATA RECAP
- UK S&P Global Manufacturing PMI (Mar) 44.9 vs. Exp. 44.6 (Prev. 44.6)
- French HCOB Manufacturing PMI (Mar) 48.5 vs. Exp. 48.9 (Prev. 48.9)
- German HCOB Manufacturing PMI (Mar) 48.3 vs. Exp. 48.3 (Prev. 48.3)
- EU HCOB Manufacturing Final PMI (Mar) 48.6 vs. Exp. 48.7 (Prev. 48.7)
- EU HICP Flash YY (Mar) 2.2% vs. Exp. 2.2% (Prev. 2.3%)
- EU HICP-X F&E Flash YY (Mar) 2.4% vs. Exp. 2.5% (Prev. 2.6%)
- EU Unemployment Rate (Feb) 6.1% vs. Exp. 6.2% (Prev. 6.2%)
