21st March 2025

MACRO:

• China will host US Senator Steve Daines, a Trump ally, for talks in China, aiming to advance stalled trade negotiations. Daines will meet a senior Chinese leader ahead of a global corporate summit in Beijing, becoming the first American politician to sit with a top Communist Party official since Trump’s return to office. (BBG)
• Trump invoked emergency powers to boost domestic production of critical minerals used widely across the economy as part of a broad effort to offset China's near-total control of the sector. (RTRS)
• Trump repeated his call on the Fed to cut rates, "Egg prices are WAY DOWN from the Biden inspired prices if just a few weeks ago. “Groceries” and Gasoline are down, also. Now, if the Fed would do the right thing and lower interest rates, that would be great!!!" (Truth)
• Trump orders federal agencies to share data across the government, specifically unemployment information at the Labor Department. (BBG)
• A federal judge on Thursday temporarily blocked members of Elon Musk’s DOGE from Social Security Administration systems containing personal information, saying their work was likely an illegal “fishing expedition.” (WSJ)
• European investors in US equities have been dealt a double blow as a slide in the dollar compounds losses on stocks, ending a “virtuous cycle” of share price and currency gains during Wall Street’s recent record run. (FT)
• T. Rowe Price sees Germany’s historic spending push as lending support to the money manager’s contrarian view that 10-year US Treasury yields will eventually reach 6% amid spillover from the ramped fiscal plans. (BBG)
• Japan's core inflation hit 3.0% in February (exp. +2.9%; prev. 3.2%) and an index stripping away the effect of fuel rose at the fastest pace in nearly a year. However, services inflation slowed to 1.3% in February from 1.4% in January, suggesting that companies were passing on rising labour costs at a gradual pace. (RTRS)
• JGB yields edged higher and Japan's Topix index climbed to an eight-month high, as financials gained following stronger-than-expected inflation data, however, the Yen saw no follow through demand and is weaker entering the European session.
• Demand for long term Japanese bonds surged to a two-year high in the week through March 15th, driven by safe-haven appeal due to growing concerns over the potential economic impact from changes in U.S. tariff policies and a broad selloff in equities. (RTRS)
• Japan’s households reduced their collective stash of cash at the fastest pace on record last quarter as they sought to cope with rising costs of living, according to BoJ data. (BBG)
• Japan's Rengo said its second round data showed an average wage hike of 5.40% for Fiscal 2025 vs 5.46% in the first-round data. (RTRS)
• A Reuters survey of Japanese companies showed 36% of respondents expect profit growth in the year ahead, 20% anticipate a Y/Y decline and 44% see their profits flat. Nearly two-thirds of those expecting earnings growth cited firmer domestic demand, while more than half of those foreseeing a slide in profit blamed higher costs for weaker performance. (RTRS)
• Chinese stocks slumped on Friday, extending this week’s losses, with investors citing a lack of fresh catalysts after a blistering rally. (BBG)
• China plans to add to its strategic reserves of key industrial metals this year, with cobalt, copper, nickel and lithium among the metals the government plans to purchase. (BBG)
• The PBoC-backed China Financial News had a story noting experts see no urgency for LPR cuts as economic momentum and policy measures stabilise. (MktNews)
• Reuters article " China's restaurants race to the bottom in deflation-hit economy" notes a record 3 million China restaurants went out of business in 2024, with restaurants in price war as consumers skimp on dining out. (RTRS)
• China’s Ministry of Finance has mandated banks for the sale of yuan-denominated three-year and five-year green bonds for an inaugural listing in London. (BBG)
• UK Chancellor Reeves is set to significantly overshoot her borrowing forecasts for the current fiscal year. The budget deficit in the first 11 months climbed to £132.2 billion— £20.4 billion more than the OBR predicted in October. Borrowing in February alone was £10.7 billion, above the expectation of the OBR and economists. (BBG)
• The UK’s official statistics agency on Friday paused the publication of its PPI and SPPI price indices used to help calculate GDP figures, the latest admission of flawed data at the beleaguered authority. (FT)
• London’s Heathrow Airport, a hub for international travel, was shut down for the day on Friday and expects significant disruption in the days to come because of a power outage. (WSJ)
• Germany’s new era of big spending is pulling up borrowing costs across Europe, reigniting jitters around fiscal stability on the continent’s periphery. (BBG)
• The mood among French manufacturers fell back again as tariff threats cloud the hobbled sector, and despite hopes that a new European commitment to raising defense spending could spur fresh activity. (WSJ)
• Strength in European gas prices during the London morning has been attributed to unverified video of attack on Russia gas transit point in Kursk region. (TradeTheNews)
• South Korea’s early trade data showed exports bouncing back this month, offering some relief for policymakers struggling to shield the economy from Trump’s tariffs. (BBG)
• The Bank of Thailand, which has long resisted interest-rate cuts despite immense political pressure, may embark on the region’s most aggressive easing cycle. (BBG)

‍

GEOPOLITICAL:

• The Trump administration is seeking new terms for US access to critical minerals and energy assets in Ukraine, widening its economic demands on Kyiv as it pushes for a peace deal with Russia. (FT)
• Trump, in a Truth Social post, denied reports in the NYT that the Pentagon was going to brief Elon Musk on US plans for a potential war with China. (Truth)
• European officials say the Trump administration has pared back its engagement with efforts to enforce sanctions on Russia as the US pushes for an end to the war in Ukraine. (BBG)
• Europe’s biggest military powers are drawing up plans to take on greater responsibilities for the continent’s defence from the US, including a pitch to the Trump administration for a managed transfer over the next five to ten years in order to avoid the chaos of a rapid unilateral withdrawal from Nato. (FT)
• NATO plans to ask European allies and Canada to increase their stocks of weaponry and equipment by about 30% in the next few years, according to a senior alliance official. (BBG)
• Israeli PM Netanyahu fired his domestic intelligence chief, extending a purge of rivals in the security establishment while further overhauling the cabinet that presided during the Oct. 7, 2023, attacks. (WSJ)
• Iran Supreme Leader Khamenei said Americans should know that they cannot reach a result in confronting Iran by using the threat method. Said if the US do something evil to the Iranian nation, they will receive a strong slap. (Middle East press)

‍

EQUITIES:

• Micron Technology forecast third-quarter revenue above estimates, signaling strong demand for its HBM chips used in AI models. Co. expects DRAM and NAND demand growth in both data center and consumer-oriented markets. Shares faded initial 6%+ gains as desks cited disappointing margins and extended long positioning.
• Nike expects its sales decline to accelerate as it continues to push discounts to clear inventory in the hopes of stoking a turnaround. However, it did report a smaller decline than feared in its recent quarter. (WSJ)
• Apple’s A20 chip for the iPhone 18 series will be mass-produced on TSMC’s 2nm process, improving efficiency and performance over previous 3nm reports. (Wccftech)
• Elon Musk, in a Tesla presentation urged investors to hold onto their shares. Meanwhile, Tesla announced it has begun exporting its first Megapack battery from its Shanghai factory. (X/RTRS)
• FedEx cut its outlook for the year, citing soft demand for business-to-business shipments as a result of continued weakness and uncertainty in America’s industrial economy. (WSJ)
• Taiwan’s economics minister rejected the idea that TSMC could become United States Semiconductor Manufacturing Co. (USSMC) and said the government will not approve TSMC’s US investment if it affects national security or hurts national economic development. (CNA via @dnystedt)
• China's government is ramping up its support for Manus AI with Reuters reporting on the private Co.'s registration on Tuesday of its China-facing AI assistant, which was featured for the first time in a state media broadcast. (RTRS)
• CK Hutchison's shares fell Friday following a weak earnings report and dividend cut. Yet the business empire controlled by family of local tycoon Li Ka-shing says its business interests are more European than Chinese. (Nikkei)
• China’s slump in consumer spending is forcing nightclubs and karaoke bars out of business, so brewers are focusing on selling beer to drink at home. (BBG)
• Rio Tinto wants to increase its investment in the U.S., especially in copper, the head of the company’s copper business said, after President Trump signed an executive order to streamline permitting processes and boost government financing for minerals projects. (WSJ)
• ASOS said it expects a significant improvement in profitability in the first half of fiscal 2025, amid a competitive landscape in fashion, with players such as Shein, Temu and Vinted pushing the market. (WSJ)
• RBC upgrades L'Oréal to "outperform" from "sector perform", expecting it to ride the wave of improving beauty market outlook boosted by upcoming product launches. (RTRS)