1st April 2025

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MACRO:

• US President Trump said he would be “very kind” to trading partners when he unveils further tariffs this week, "You’re going to see in two days, which is maybe tomorrow night or probably Wednesday... We’re going to be very nice, relatively speaking, we’re going to be very kind." (Guardian)
• US Treasury Secretary Bessent, on Fox News, said on April 2nd "we are going to disclose the reciprocal tariffs... everyone will have the opportunity to lower their tariffs and non tariff barriers, stop the currency manipulation, stop subsidising labour, stop providing cheap loans and and make the global trading system fair for American workers again." (Fox)
• The USTR released an encyclopedic list of foreign countries' policies and regulations it regards as trade barriers ahead of Trump's reciprocal tariffs. The report did not specify VATs as trade barriers in its discussion of EU policies (it did for some other nations), focusing instead on digital services taxes and the bloc's new carbon border adjustment mechanism. (RTRS)
• US President Trump hints that Elon Musk and DOGE may be reaching a turning point, stating “At some point Elon’s gonna want to go back to his company.” (Politico)
• US Commerce Secretary Lutnick has signaled he could withhold promised Chips Act grants as he pushes for more US projects from companies, according to Bloomberg sources. Lutnick’s goal is to generate tens of billions of dollars in additional semiconductor investment commitments without increasing the size of federal grants. (BBG)
• Two Michigan business groups urged President Donald Trump to halt plans to impose sweeping 25% tariffs on imported vehicles and parts, saying it would lead to dramatic price hikes, supply-chain disruptions and pain in the auto-heavy state. (RTRS)
• Two key and unexpectedly competitive U.S. House special elections are occurring today in Florida's 1st and 6th districts. The outcomes could impact the GOP’s House majority and Trump's ability to advance his tariff agenda. (Trade The News)
• China's factory activity expanded at its fastest pace in four months in March, with the Caixin Manufacturing PMI Final at 51.2 vs. expected 51.1 (Prev. 50.8). Stronger demand and robust export orders contributed to the growth, but concerns remain over the escalating U.S. trade war. (RTRS)
• Average resale home prices across 100 Chinese cities fell at a sharper month-on-month pace in March, a China Index Academy survey showed, signalling persistent challenges in the property sector despite modest gains in new home prices. (RTRS)
• Economists expect China to deliver its long-awaited monetary stimulus as soon as in April, with timing likely dictated by the double threat of US tariff hikes and a seasonal cash shortage. (BBG)
• The RBA kept rates unchanged, citing the need for further confirmation that inflation will continue to decline. The decision comes ahead of a general election on May 3rd. (WSJ)
• Australian retail sales rose modestly for a second straight month in February as a long-awaited cut in interest rates combined with slower inflation to boost consumer sentiment and spending power. (RTRS)
• Australian home prices climbed to a fresh high in March, buoyed by an interest-rate cut. (BBG)
• Large Japanese manufacturers became less upbeat about their business prospects in the first quarter of the year, the BoJ's Tankan survey showed, reflecting concerns about US President Trump’s threat of higher tariffs. (WSJ)
• Japanese companies expect consumer prices to rise an average 2.5% a year from now, higher than their 2.4% projection three months ago, the BoJ's Tankan survey showed. (RTRS)
• Japan's factory activity declines accelerated in March as demand weakened and the escalating U.S. trade war clouded the manufacturing outlook, the final au Jibun Bank PMI showed. (RTRS)
• Japan's jobless rate in February fell to 2.4% from 2.5% in January, government data showed. Economists' median forecast was for 2.5%. The jobs-to-applicants ratio also dipped to 1.24 in February from 1.26 in January. The median forecast was 1.26. (RTRS)
• Japan will keep up a strong push for the US to exempt it from auto tariffs, Prime Minister Shigeru Ishiba said on Tuesday, while vowing to take the necessary steps to cushion the blow to the economy and jobs. (RTRS)
• Prices in British shops fell less in March than in February and are likely to climb soon due to the impact of a new tax on employers and other costs for retailers, the BRC said. (RTRS)
• UK house prices unexpectedly stalled in March, according to the lender Nationwide, reflecting some weakness as the stamp duty tax break comes to an end. (FT)
• A senior UK Treasury minister has said he is confident private financing for the Sizewell C nuclear power station will be “teed up” in time for a final investment decision in June over whether to proceed with the delayed project. (FT)
• Goldman Sachs cut its 12-month forecast for Europe's benchmark STOXX 600 index, citing the potential impact of Trump's tariff plans. The Wall Street brokerage trimmed its forecast to 570 points from 580 earlier (vs last close of 534). (RTRS)
• EU’s Von der Leyen responded to US trade tariff threats by stating saying the EU has the power to push back against U.S. trade tariffs. Said tariffs will just fuel inflation, the opposite of what we want to achieve. Said the EU is open to negotiations on trade but all instruments are on the table for countermeasures. (RTRS)
• South Korea’s exports grew at a stronger-than-expected pace in March, showing signs of resilience as concerns about U.S. tariffs cast uncertainty over the outlook for trade. (WSJ)
• The RBNZ said its board is in the process of preparing a recommendation for the appointment of a governor for a six-month term and will be sending it to Finance Minister Nicola Willis soon. (RTRS)

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GEOPOLITICAL:

• China’s military launched large-scale drills around Taiwan, involving navy, air, ground, and rocket forces. The exercises are aimed at Taiwan’s President Lai Ching-te as a “severe warning and forceful containment against Taiwan independence.” (Politico)
• The de facto U.S. embassy in Taipei said there is no justification for China's "irresponsible threats" and military pressure operations near Taiwan, and the United States will continue to support the island
• US President Trump is planning to visit Saudi Arabia, Qatar and potentially the United Arab Emirates in the coming weeks, though he said that plans are still being finalized. (WSJ)
• Trump said that there is communication with North Korean leader Kim Jung Un and that his administration will probably do "something" with respect to engagement with that nation. (RTRS)
• Trump said he wants to see Russian President Putin follow through and make a deal to end the war in Ukraine; said he doesn't want to have to move forward with secondary tariffs that he's previously threatened to impose on buyers of Russian oil. (RTRS)
• Danish Foreign Minister Rasmussen is set to meet U.S. Secretary of State Rubio in the first in-person, high-level talks between the two countries since Trump's re-election. (FT)
• Greenland will strengthen its ties with Denmark until it can become a sovereign nation, the Arctic island's incoming PM told Reuters, noting that the semi-autonomous Danish territory ultimately wants to become independent. (RTRS)

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EQUITIES:

• Meta executives are urging U.S. trade officials to challenge an expected EU fine and cease-and-desist order as Mark Zuckerberg looks to cash in on a favour from the Trump admin. (WSJ)
• Demand for NVIDIA’s H20 has grown significantly this year. By March, inventories had become critically low with computing power buyers paying a premium to lease H20. Over the next two months, there is even a possibility that wafer production of H20 may cease, according to Asian press.
• SoftBank Group has agreed to lead a funding of up to $40 billion in a for-profit subsidiary of OpenAI, valuing the ChatGPT maker at $300 billion. (WSJ)
• In his first remarks as Intel's new CEO, Lip-Bu Tan outlined a leaner version of the chipmaker in which he would work directly with engineers to develop new products based on feedback from the company's customers. (RTRS)
• Tesla's sales in France fell Y/Y for a third consecutive month in March, contributing to the lowest first-quarterly sales figures in the country since 2021 for Elon Musk's electric car brand. (RTRS)
• PVH shares surged 16% afterhours following a Q4 EPS and revenue beat, and while its Q1 guidance was a little light, it topped FY earnings expectations. (Newsquawk)
• Berkshire Hathaway is planning to sell yen bonds in the global markets, after Warren Buffett revealed that the firm is looking to increase ownership in Japan’s five main trading houses. (BBG)
• A bankruptcy judge dismissed Johnson & Johnson’s third attempt to resolve its mass talc liabilities through chapter 11, rejecting the company’s latest bid to end one of the largest-ever mass torts. (WSJ)
• Chevron has agreed to sell 70% interest in its East Texas gas assets for $525 million, as part of the U.S. energy company’s strategy to optimize its portfolio. (WSJ)
• Boeing is slowing production of its 737 MAX to 31 airplanes per month from 38 to avoid disrupting the assembly line. (Reuters)
• Hooters, the casual bar and dining franchise known for its female waitstaff dressed in orange shorts, has filed for bankruptcy after changing consumer preferences left it unable to stay good on its debts. (WSJ)
• Canada’s First Quantum Minerals said it was stepping back from a multi-billion-dollar arbitration demand against Panama’s government over the closing of one of the world’s largest copper mines. The company suspended one case and dropped another, in a signal that there could soon be a resolution to one of the largest investor-state disputes in history. (FT)
• People close to TSMC suggested the additional $100bn investment in the US was merely an estimated price tag for plans that had been on the books for the long term anyway, adding that the White House announcement reflected an intention rather than a promise. (FT)
• China's SMIC plans to begin operating its 5nm foundry process next year. (Chosun)
• AstraZeneca's AZD0780, a novel oral PCSK9 inhibitor, demonstrated significant LDL cholesterol (LDL-C) reduction in PURSUIT Phase IIb trial. JPMorgan analyst writes that "we see multi blockbuster potential", via Bloomberg. (BBG)
• Mercedes-Benz is building up inventory levels in the U.S. at the wholesale level and at dealer lots to get ahead of tariffs due to be collected from April 3, executives told analysts on a call on Monday, according to notes by analysts. (RTRS)

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