27th March 2025

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MACRO:

• U.S. President Trump unveiled a 25% tariff on imported cars and light trucks starting on April 3rd in a move auto industry experts expect will drive up prices and stymie production. However, there is a temporary exemption for auto parts. (RTRS)
• Trump said on Truth Social that far larger tariffs than currently planned could be placed on the European Union and Canada if they both work together "to do economic harm to the USA." (Truth)
• Trump said to reporters he would be willing to reduce tariffs on China to get a deal done with TikTok's owner ByteDance to sell the short video app. However, AFP reported later that China had rebuffed Trump's offer. (RTRS/AFP)
• A court order blocking Trump's freeze on trillions of dollars in government financial assistance will remain in place for now, a federal appeals court said on Wednesday. (RTRS)
• The Trump administration’s deep cuts to the federal workforce and research funding threaten to erode the quality and credibility of “gold standard” US statistics, economists have warned. (FT)
• Republican political operatives have grown concerned about a special election in Florida, with the race for a solidly red House seat emerging as more competitive than expected, creating a potential headache for the GOP. (WSJ)
• The Federal Reserve should consider setting up an emergency program that would close out highly leveraged hedge-fund trades in the event of a crisis in the $29 trillion US Treasuries market, according to a panel of financial experts. (BBG)
• Barclays says foreign exchange markets haven’t fully priced in the impact of the upcoming US tariffs, including the yuan and the Mexican peso. Said the yuan is under-priced by around 10% against the dollar, based on the current tariff schedule. (BBG)
• Canada will soon respond to new tariffs on imported vehicles announced by the US and could impose retaliatory measures against the United States, Prime Minister Mark Carney said on Wednesday. (RTRS)
• China's industrial profits slipped in the first two months of 2025 (-0.3% in Jan-Feb vs same period last year) where officials say some firms face production and operation difficulties amid US tariffs adding to domestic demand and deflationary woes. (RTRS)
• China's ambassador to the U.S. said the US is using fentanyl as "an excuse" to raise tariffs which will only turn another point of cooperation into a point of friction. (RTRS)
• Chinese Vice Premier Ding Xuexiang pledged stronger policy support for China, which he said had started 2025 well and was on track to hit this year's growth target, buoyed by advancements in AI and other technologies. (RTRS)
• Chinese financial authorities have told some companies and advisers that they can begin the process of launching mainland IPO once more, in an early sign of a rebound in listings in the world’s second-largest economy. (FT)
• China’s big banks are accelerating a drive to write off soured property loans to clean up their balance sheets as they heed calls by policymakers. Some banks have this year doubled the annual quota at their local branches to write off such debt. (BBG)
• Japanese PM Ishiba said Tokyo will put "all options on the table" in dealing with Washington's tariff announcement. Analysts say the move could deal a heavy blow on Japan's economy given its reliance on auto exports to the US. (RTRS)
• Japanese stocks saw a significant outflow of foreign funds in the week through March 22 as investors became more cautious ahead of next week's anticipated U.S. tariff hikes. (RTRS)
• Nearly 50% of leaders at major Japanese companies plan to expand their U.S. operations, as Trump pushes for more foreign investment, but 73% said they are worried about policy uncertainty, including tariffs, a Nikkei survey shows. (Nikkei)
• A Japanese think tank said that while Japan’s biggest union group reported the biggest wage gains in more than three decades for two successive years, the broader picture for pay trends may not be quite as rosy. (BBG)
• ECB's Wunsch said the Bank should consider holding interest rates steady at its next meeting as US trade policy complicates its decision-making. (BBG)
• ECB's Kazaks said the Bank can probably lower borrowing costs further if the current economic trajectory is maintained. (BBG)
• France’s 2024 budget deficit was narrower than expected at 5.8% of GDP, giving the government some breathing room as it struggles to lower its debt load. (BBG)
• The Australian rates market is signaling (via the swap market) that the demand for the nation’s sovereign bonds has slumped to a record low relative to supply, underscoring investor concern over heavy debt issuance. (BBG)
• South Korean shares post biggest fall in a month as automakers slump on US tariffs. (RTRS)
• South Korea's auto sector is expected to face "considerable difficulties" when US tariffs on cars take effect and the government plans an emergency response by April, the industry minister said. (RTRS)
• Taiwan is considering a variety of responses to potential new tariffs from the US including increasing energy imports and reducing the island's own tariffs to balance bilateral trade, government officials said on Thursday. (RTRS)
• Brazil's President Lula said Trump vowed to lodge a complaint with the WTO over a trade levy on Brazilian steel. (RTRS)
• Goldman Sachs has ramped up its gold price forecast to $3,300 an ounce by year-end, citing stronger-than-expected central bank demand and solid inflows into bullion-backed exchange traded funds. (BBG)
• European oil traders are weighing when to re-enter Russia’s markets with some predicting Moscow will seek to maintain increased control of its oil exports even if western sanctions are lifted. (FT)

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GEOPOLITICAL:

• US Treasury Secretary Bessent, in a Fox News interview, did not rule out allowing Russian banks to rejoin the SWIFT international payment messaging system. But the White House would need backing from Europe to restart it. (Politico)
• Taiwan has held the first realistic and comprehensive civil defence drill in its democratic era as the country seeks to convince a sceptical US of its commitment to strengthening itself against what both see as a growing threat from China. (FT)

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EQUITIES:

• TSMC's pledge to spend an extra $100bn on advanced manufacturing plants in the US will do little to help the country restore its global lead in chipmaking, according to ex Intel CEO Pat Gelsinger. (FT)
• Elon Musk, on the auto tariffs, said, "Important to note that Tesla is not unscathed here. The tariff impact on Tesla is still significant... This will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial." Trump separately said the tariffs could be net neutral for Tesla. (RTRS)
• AMD has been downgraded at Jefferies to Hold, who suggest NVDA's H200 retains a significant performance advantage over the MI300x and they expect that gap expands even further with Blackwell and Rubin. (Newswires)
• Paychex CEO John Gibson told CNBC’s Jim Cramer on Wednesday he doesn’t think a recession is imminent. Small businesses are optimistic, he said, even though they are concerned about the macroeconomy and the political sphere. (CNBC)
• GameStop is seeking to sell $1.3 billion of convertible bonds with no coupon payment to fund Bitcoin purchases. (BBG)
• Blue-chip advertisers flock to Fox News following Trump return. (FT)
• Citigroup is expanding its investment banking team in Japan as the Wall Street firm bets that the country’s deal fee pool will finally rebound after a two-decade slump. (BBG)
• Alibaba launches new “Qwen2.5-Omni-7B” multimodal model that it says can process text, images, audio, and videos, while generating real-time text and natural speech responses. (CNBC)
• Foxconn is set to hold a seminar in Japan on April 9 to lay out its strategy on electric vehicles, as it courts more Japanese automakers after winning a deal from Mitsubishi Motors. (RTRS)
• SK Hynix said that some customers have brought forward orders in preparation for new U.S. tariffs on semiconductors, saying the "pull-in" effects, along with the reduction in customers’ inventory, led to favourable market conditions recently but warned it remains to be seen whether the trend will continue. (RTRS)
• Elliott Management held talks with private equity groups in recent months to gauge interest in buying Bayer’s consumer health business. (FT)
• H&M on Thursday posted weaker than expected first-quarter sales in a slow start to the year for the world’s second-largest clothing retailer. (CNBC)
• Next raises its profit guidance as the fashion and homewares retailer said it can withstand growing risks in the UK economy. (BBG)

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