13th March 2025

MACRO:

• US Senate Minority Leader Chuck Schumer has signaled that Democrats will block the Republican-led funding bill to avert a government shutdown set for midnight on Saturday. (WSJ)
• Senate Republicans outlined a tax-cut plan exceeding $5 trillion over a decade, including measures that go beyond an extension of Trump's expiring tax cuts ($3.8 trillion). (WSJ)
• US junk bond spread has jumped by 0.56 percentage points since mid-February to a six-month high of 3.22 percentage points, underscoring worries on cooling US growth or even a recession, with analysts forecasting a larger rise ahead. (FT)
• WSJ have profiled the weakening state of the US consumer, noting economic uncertainty—tariffs, inflation, and recession fears—is curbing spending across all income groups, citing a slew of negative reads from public companies. (WSJ)
• CEOs are privately critical of Trump’s economic policies, especially tariffs, but remain publicly silent. A poll showed 44% would speak out only if the stock market dropped 20%. (WSJ)
• JPMorgan's strats say the worst of the US equity correction may be over, with credit markets indicating a lower risk of recession. (BBG)
• Sen. Jeanne Shaheen (D-N.H.) announced she won’t seek re-election in 2026, joining Sens. Gary Peters (D-Mich.) and Tina Smith (D-Minn.) in exiting, further weakening Democrats’ Senate prospects. (WSJ)
• The amount of fentanyl seized at the US-Mexico border fell dramatically since January to its lowest level since December 2021. (BBG)
• Manhattan apartment rents soared to a record high in February amid intense competition, including bidding wars in a more than a quarter of all deals. (BBG)
• BoJ Governor Ueda on Thursday painted an optimistic view on consumption and reaffirmed the bank's resolve to shrink its "too big" balance sheet. (RTRS)
• Japan's Finance Minster Kato told parliament that Japan is transiting away from an economy where price gains are driven by rising import costs from a weak yen, to one driven by higher wages, but cannot yet say Japan won't revert to deflation again. (RTRS)
• Japan Bankers Association Chair said long-term interest rates have scope to rise further due to BOJ rate hikes and bond-buying taper. Added that the market's views on BOJ's terminal rate have risen more than expected. (RTRS)
• Japan's UA Zensen union group announced its members had received an average 5.37% increase in monthly wages (prev. 5.91% Y/Y) for full-time workers and a 6.53% hike (prev. 6.45% Y/Y) for part-timers. The group had set a target of achieving a 6% increase for full-time workers and 7% for part-timers this year. (RTRS)
• Mizuho's analysts say the BoJ's rate hikes are expected to yield net benefits for households as the increased interest from their deposits would offset the burden of higher mortgage rates. (RTRS)
• Delegates at China's recent Two Sessions meeting, interviewed by the FT, enthusiastically embraced the governments emphasis on tech. One said, “China will definitely invest more funds, talent, and teams into developing its own high-end computing chips... Sooner or later we will break through the computing power bottleneck.” (FT)
• China’s bond selloff is creating pockets of opportunity for foreign investors, who can swap dollars for more attractive yuan-denominated short-term bank debt — and inadvertently bolster Beijing’s support of its currency. (BBG)
• Hong Kong’s stock exchange is considering lowering the minimum trading unit for some of its most expensive stocks to boost trading. (BBG)
• Goldman Sachs has said hedge funds moved to unwind bullish and bearish wagers in Asia on Monday, after dumping bets in the US and Europe on Friday. (BBG)
• France's industry minister Ferracci said the EU’s safeguards for steel need to be strengthened and extended as soon as possible, urging Brussels to allow more state aid to flow to industries that face heavily subsidised competition, such as steel, batteries and EVs. (FT)
• Germany's lower house of parliament will on Thursday hold the first reading of the proposal by the conservatives and SPD as well as rival plans from the Greens and FDP for boosting defence funds. Second and third readings are expected next Tuesday, resulting in a vote. (RTRS)
• Deutsche Bank's analysts say their base case remains for Germany's spending reforms to pass with a two-thirds majority over the course of next week, but it is unlikely to be a smooth passage. (RTRS)
• ECB's Nagel said U.S. trade tariffs on the EU could push Germany into a recession this year. (BBC)
• Start-up funding in Germany hit €7 billion in 2024, up €1 billion from 2023, but with 12% fewer deals, signaling larger average investments, especially vs the 2021 peak of €17 billion. (FT)
• The UK's housing market had its slowest month in more than a year in February as a rush by buyers to close deals ahead of the expiry of a tax break ran out of steam, with further weakness seen ahead, according to the latest RICS survey. (RTRS)
• BoC's Macklem said the Bank considered leaving rates unchanged at 3%, given the uncertainty about the course of US trade and tariff policy, before concluding it needed to cut for the seventh consecutive. (RTRS)
• Some of the world’s largest investment funds, infrastructure funds and construction and engineering companies are in New Zealand this week as it tries to open up its economy to foreign investment. (FT)
• South Korea’s acting president, Choi Sang-mok, worries the Trumps attention will soon turn to South Korea, which runs one of the world’s biggest trade surpluses with the U.S. Trump's interest in a phone call is reportedly low given Choi's lame-duck status. (WSJ)
• Vietnam’s top trade official is heading to the US in a bid to persuade President Trump’s team that Hanoi is serious about resetting trade ties. (BBG)
• Turkey’s central bank will keep a tight stance after “powerful” economic growth and with the outlook for demand murky, Governor Fatih Karahan said to state media, following three consecutive interest-rate cuts. (BBG)
• India’s inflation eases to a seven-month low in February, aligning with the central bank’s target and raising hopes of further interest rate cuts. (BBG)
• Chinese buyers are back in the market for Russia’s ESPO crude, thanks to prices that have cooled as shippers and middlemen find workarounds to help blunt the impact of US sanctions. (BBG)
• UBS sees gold hitting $3,100/oz by year-end, maintaining its view that the fundamental narrative for gold remains intact, with heightened upside risks driven by stagflationary concerns, persistent geopolitical tensions, and inflation pressures. (Newswires)
• Macquarie Group analysts say gold’s burgeoning safe-haven allure may see it surge to a record high of $3,500 an ounce during the third quarter. (BBG)
• Citigroup see hitting $10,000 a ton in the coming three months, saying the global market will remain tight until the timeline for US import tariffs becomes clearer. (BBG)

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GEOPOLITICAL:

• F7 foreign ministers meet in Canada on Thursday after seven weeks of rising tensions between U.S. allies and President Donald Trump. (RTRS)
• Russia's Kremlin said President Putin may comment Thursday on the proposal for a ceasefire in Ukraine. (Newsquawk)
• Poland’s president urges US to move nuclear warheads to Polish territory. (FT)
• Nato chief Rutte goes to the White House today for a consequential meeting with President Trump. Nato diplomats insist that nothing has been decided, but similarly, nothing can be ruled out. (FT)
• Taiwan President Lai Ching-te said the government will work to let military tribunals operate in peacetime and announced a tightening of rules governing exchanges with China. (BBG)

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EQUITIES:

• Intel shares surged after hours after announcing it had appointed Lip-Bu Tan as its new CEO. Tan was previously the CEO of Cadence Design Systems. (CNBC)
• OpenAI’s head of international strategy has said the artificial intelligence giant is seeing “tremendous demand in the market across all segments.”. (CNBC)
• American Eagle said shoppers are pulling back on spending as it issued mixed holiday quarter results. (CNBC)
• Sunnova Energy, a major U.S. rooftop solar firm, is negotiating with creditors over its $8.5 billion debt, potentially facing bankruptcy. (WSJ)
• TSMC will still build four semiconductor fabs in Taichung, central Taiwan despite the additional US$100 billion investment in the US, said Taichung Mayor S.Y. Lu, who said the fabs will go ahead as planned. (CNA via @dnystedt)
• Alibaba unveiled a new version of its AI assistant mobile app that incorporates its latest in-house model, another in a series of product rollouts intended to help the company keep pace with Chinese AI rivals. (BBG)
• Huawei is to release its new Pura phones next Thursday, the first model with pre-installed HarmonyOS Next system, a significant step away from its previous reliance on Android. (MktNews)
• HSBC is placing some of its investment bankers on short-term retention agreements as it winds down various businesses in a broad overhaul. (BBG)
• Deutsche Bank forecast increased revenue in 2025 at its investment bank and three other main business units, reaffirming its financial targets to be achieved by 2025 amid some analyst skepticism over the targets being met. The bank warned of growing risks from its auto portfolio. (RTRS)
• Hugo Boss said subdued consumer sentiment and muted store traffic have hurt its performance in the year so far, warning that it expects market uncertainty to persist. (WSJ)
• Generali said its operating profit rose on the performance of all its units over 2024 gross written premiums that increased more than expected. (WSJ)
• Couche-Tard will continue its friendly pursuit of Seven & i, executives said, sounding confident that they can overcome antitrust issues that could block the prospective acquisition in the U.S. (WSJ)