- US stocks resumed their selling with all major indices closing well in the red and the losses led by the Nasdaq amid pressure across the tech megacaps, while risk appetite failed to benefit from a slew of better-than-expected data releases and positive talks between US President Trump and Russian President Putin where they agreed on an immediate ceasefire on all energy and infrastructure, as well as to begin talks immediately regarding a complete ceasefire.
- USD weakened and failed to benefit from the slew of firmer-than-expected data releases from the US which prompted an upward revision in the Atlanta Fed GDPNow forecast for Q1. There were recent comments from Treasury Secretary Bessent that reciprocal tariffs won't be an automatic 25% plus 25% and that the tariff number on April 2nd may be low for some countries, while the attention in the US turns to Wednesday's FOMC announcement.
- Looking ahead, highlights include New Zealand Current Account, Japanese Trade Data & Machinery Orders, Australian MI Leading Index, BoJ Policy Decision & Governor Ueda's Post-Meeting Press Conference, Supply from Australia.
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LOOKING AHEAD
- Highlights include New Zealand Current Account, Japanese Trade Data & Machinery Orders, Australian MI Leading Index, BoJ Policy Decision & Governor Ueda's Post-Meeting Press Conference, Supply from Australia.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks resumed their selling with all major indices closing well in the red and the losses led by the Nasdaq amid pressure across the tech megacaps, while risk appetite failed to benefit from a slew of better-than-expected data releases and positive talks between US President Trump and Russian President Putin where they agreed on an immediate ceasefire on all energy and infrastructure, as well as to begin talks immediately regarding a complete ceasefire.
- SPX -1.07% at 5,614, NDX -1.66% at 19,483, DJI -0.62% at 41,581, RUT -0.89% at 2,050.
- Click here for a detailed summary.
TARIFFS/TRADE
- US Treasury Secretary Bessent said all options are available on China investments and if necessary, they will block an outbound investment. Bessent said that reciprocal tariffs won't be automatic 25% plus 25% and President Trump asked him to rethink the US sanctions regime, while he added that each country will get a tariff number on April 2nd which may be low for some countries and 15% of countries will make up the bulk of tariffs, according to Fox Business News.
- US mission told China and Canada it is ready to confer after those countries brought trade disputes, according to WTO documents.
- US Commerce Secretary Lutnick said it is "nonsense" that DeepSeek was built without US chips and the US is to try to attach export controls to trade deals.
- Italian PM Meloni said they must continue to work pragmatically to find common ground on tariffs with the US and avert a trade war, while she is not sure if it is good to respond to US tariffs with EU tariffs.
- China said resolving the trade dispute with the EU via talks is important.
- India recommended a 12% safeguard duty or temporary tax for 200 days on some steel products, according to a government notice.
NOTABLE HEADLINES
- US Senate Budget Committee Republicans are reportedly planning to begin a series of meetings over the next few weeks with the Senate parliamentarian’s office on budget reconciliation, according to sources familiar with the plans cited by Punchbowl.
- Fitch cut its US 2025 growth forecast to 1.7% (prev. 2.1%), while it stated the US administration started a global trade war that will reduce US and world growth, push up US inflation, and delay Fed cuts.
- NVIDIA (NVDA) announced the Blackwell Ultra Chip will be released in H2 25 and NVDA Blackwell Ultra AI factory platform paves the way for the age of AI reasoning, while the Vera Rubin Chip will be announced in H2 26 and it announced a co-packaged optics networking chip. Furthermore, it announced DGX Spark and DGX Station personal AI computers, introduced a new personal workstation computer and announced a family of open reasoning AI models for developers and enterprises to build agentic AI platforms.
DATA RECAP
- US Industrial Production MM (Feb) 0.7% vs. Exp. 0.2% (Prev. 0.5%, Rev. 0.3%)
- US Manuf Output MM (Feb) 0.9% vs. Exp. 0.3% (Prev. -0.1%, Rev. 0.1%)
- US Capacity Utilization SA (Feb) 78.2% vs. Exp. 77.8% (Prev. 77.8%, Rev. 77.7%)
- US Housing Starts Number (Feb) 1.501M vs. Exp. 1.38M (Prev. 1.366M, Rev. 1.350M)
- US Building Permits Number (Feb) 1.456M vs. Exp. 1.453M (Prev. 1.473M)
- US Export Prices MM (Feb) 0.1% vs. Exp. -0.2% (Prev. 1.3%)
- US Import Prices MM (Feb) 0.4% vs. Exp. -0.1% (Prev. 0.3%, Rev. 0.4%)
FX
- USD weakened and failed to benefit from the slew of firmer-than-expected data releases from the US which prompted an upward revision in the Atlanta Fed GDPNow forecast for Q1. There were recent comments from Treasury Secretary Bessent that reciprocal tariffs won't be an automatic 25% plus 25% and that the tariff number on April 2nd may be low for some countries, while the attention in the US turns to Wednesday's FOMC announcement.
- EUR mildly strengthened on what was a choppy day and after Germany's Bundestag passed the fiscal reform package.
- GBP eked marginal gains against the dollar and just about reclaimed the 1.3000 status.
- JPY was ultimately weaker but well off today's worst levels after USD/JPY retreated from near the 150.00 level heading into today's BoJ policy announcement.
- Canadian CPI Inflation YY (Feb) 2.6% vs. Exp. 2.2% (Prev. 1.9%)
FIXED INCOME
- T-notes caught a bid in risk-off trade and were also supported by a strong 20yr auction.
COMMODITIES
- Oil prices were choppy but settled lower after the benchmarks sold off through the duration of the US session as risk sentiment waned and geopolitics remained in focus.
- Russian Deputy PM Novak said Russian oil output is seen between 515mln-520mln metric tons in 2025 and it sees oil processing higher Y/Y, while it added the oil market is in balance and an OPEC+ output hike by 100k BPD will not impact the oil market.
- Kazrosgaz suspended liquefied petroleum gas production and supplies from Russia's Orenburg gas processing plant this year due to EU sanctions on imports of Russian propane and propane butane, according to Reuters citing sources.
- Fitch said tariffs on Canada could widen the Canadian-US oil price benchmark spreads and affect US refining margins, while it added that blanket US tariffs on China could weigh on global economic growth and oil demand, increasing oversupply and adding to pressure on oil prices.
- Nigerian oil firm Renaissance said it is aware of an explosion on a major oil pipeline and it is investigating the matter, while Nigeria’s President later declared a state of emergency in the oil-producing Rivers state.
GEOPOLITICAL
MIDDLE EAST
- Israeli PM Netanyahu said negotiations will continue "only under fire" and nothing will stop them from achieving all their war aims. Netanyahu stated military pressure is a critical condition for releasing hostages and Israel would act against Hamas using increasing pressure, while this is just the beginning and Israel will work until Hamas no longer poses a threat.
- Israeli military said it was continuing to strike targets belonging to Hamas and Islamic Jihad across the Gaza Strip.
- Israel’s Foreign Ministry said the Americans were informed before the attack and supported it, while it added that it is not a one-day attack and they will continue the military operation in the coming days. Furthermore, Israeli official Katz separately commented that they won't halt the fighting until all hostages are released.
- Hamas said communication with mediators is ongoing and they are looking to complete the implementation of the ceasefire deal.
- Qatar's PM demanded immediate and decisive international action to compel Israel to implement an immediate ceasefire and return to negotiations.
- Air raid sirens went off in southern Israel after a missile launch from Yemen was detected, according to the IDF cited by Axios.
- Houthi Minister Amen said they are at war with the US now and will retaliate against strikes, while they will not be "dialling down" Red Sea action in response to US pressure or appeals from allies such as Iran, according to Reuters.
- Yemen's Houthis said they will expand their targets in Israel in the next hours and days if aggression against Gaza does not end.
RUSSIA-UKRAINE
- The call between US President Trump and Russian President Putin reportedly lasted for 1.5 hours, according to MSNBC. Furthermore, an informed Russian source said the call between Russian President Putin and US President Trump went "very well", according to Sky News Arabia.
- US President Trump said his call with Russian President Putin was very good and productive, while they agreed to an immediate ceasefire on all energy and infrastructure with the understanding that they will be working quickly to have a complete ceasefire.
- White House readout of the Trump-Putin call noted that they spoke about the need for peace and a ceasefire in the Ukraine war, while leaders agreed the movement to peace will begin with an energy and infrastructure ceasefire, as well as technical negotiations on implementation of a maritime ceasefire in the Black Sea, and on a full ceasefire and permanent peace with the negotiations to begin immediately in the Middle East. Leaders spoke broadly about the Middle East as a region of potential cooperation to prevent future conflicts and discussed the need to stop the proliferation of strategic weapons and will engage with others to ensure the broadest possible application. It was also stated that a future with an improved bilateral relationship between the US and Russia has a huge upside which includes enormous economic deals. Furthermore, the leaders shared the view that Iran should never be in a position to destroy Israel.
- Kremlin said Russian President Putin and US President Trump discussed Ukraine and agreed to stay in contact, while Ukraine and Russia are to swap 175 for 175 POWs, according to TASS. It was also reported that Putin reaffirmed commitment to peace in Ukraine and that Russia and the US are to set up expert groups on Ukrainian settlement. Furthermore, there are reportedly still some sticking points on a ceasefire in Ukraine and Putin said there must be a stop to Ukrainian mobilisation and arming of Ukraine, while Putin supports the idea of not hitting energy facilities and agreed to halt strikes on energy infrastructure for 30 days.
- Russian President Putin's envoy Dmitriev said they see major prospects for joint Russia-US projects, such as in space. It was also reported that Russia's Sovereign Wealth Fund said it is looking into rare earth projects in Russia and is looking to partner with US firms.
ASIA-PAC
NOTABLE HEADLINES
- Chinese President Xi is angry about CK Hutchison's (1 HK) plan to sell Panama Canal ports to a US-led group, in part because the company didn’t seek Beijing’s approval in advance, according to WSJ citing sources.
- China’s Foreign Minister said in a phone call with the Foreign Affairs advisor to the French President that China is willing to strengthen high-level exchanges and strategic cooperation with France and jointly safeguard true multilateralism.
- Oracle (ORCL) reportedly considers a security role and small stake to land the TikTok deal, according to Bloomberg which noted that the plan emerged as the deadline nears for the deal to save TikTok in the US.
EU/UK
NOTABLE HEADLINES
- UK Chancellor Reeves confirmed the start of the procurement process for a digital Gilt instrument, while the process will test the demand for and use of DLT.
- ECB's Rehn said growth in the Euro area economy is picking up gradually and it noted that risks to the inflation outlook are two-sided.
- European Council called for an acceleration of work to decisively ramp up Europe's defence readiness within the next five years, according to Reuters citing draft conclusions.
- German Bundestag passes the fiscal reform package of CDU/CSU's Merz with 513 votes in favour vs 207 against (489 needed for constitutional reform).
- Fitch said pressure could arise on Germany's AAA rating in the long term if spending is not offset by consolidation or lasting improvement in growth.
- Dutch Parliament approved motions calling on the government to reduce dependence on US software firms and to launch a tender for a national cloud services platform.
DATA RECAP
- German ZEW Current Conditions (Mar) -87.6 vs. Exp. -80.5 (Prev. -88.5)
- EU ZEW Survey Expectations (Mar) 39.8 (Prev. 24.2)
