5th March 2025

MACRO:

• US President Trump gave a one-hour, 40-minute address to Congress, the longest of its kind in history, where he highlighted the work his administration has done so far and reaffirmed key initiatives for the future. “There may be a little disturbance, but we’re OK with that,”, Trump said in reference to tariffs. (WSJ)
• Trump has signalled privately that he is going to stick with tariffs, Reuters reported citing The New York Times, although note the original touted NYT source could not be found by this author. (RTRS)
• Trump Still Considering Tariffs on Taiwanese Chips, Despite $100 Billion TSMC Deal. (WIRED)
• The Trump administration is considering selling the Washington headquarters of the FBI and the Department of Justice as it presses ahead with its aggressive government cost-cutting agenda. (FT)
• The smallest U.S. businesses shed jobs in February and average revenue fell, according to Intuit data, a sign of pressure in one vulnerable sector of the economy that preceded the implementation of tariffs. (RTRS)
• Treasury Options Traders Target Bigger Bond Rally Ahead. (BBG)
• China and Hong Kong shares gained on Wednesday after Beijing set an ambitious, yet consensus, economic growth target and vowed more support for domestic consumption and the tech industry. (RTRS)
• China announced a consensus-fitting set of economic targets for 2025, with GDP at 5% (prev. 5% in 2024), raising its fiscal deficit target to 4.0% of GDP (prev. 3.0% in 2024), and setting the consumer inflation target at 2% (prev. 3% in 2024, the first drop in decades). (WSJ)
• Chinese local governments will be allowed to issue a total of CNY 4.4tln in special-purpose bonds, typically used to fund infrastructure and development projects. Additionally, Beijing plans to issue CNY 1.3tln yuan in ultralong treasury bonds (vs CNY 1tln in 2024) and CNY 500bln in special treasury bonds to help banks replenish their capital bases. (WSJ)
• Chinese Premier Li Qiang said AI would be key to boosting China’s digital economy, pledging boosted support for applications of large-scale AI models and AI hardware, such as smartphones, robots, and smart cars. China will develop open-sourced models whilst continuing to invest in computing power and data for AI. (WSJ)
• Beyond the 300 billion yuan allocated to a recently-expanded consumer subsidy scheme for electric vehicles, appliances and other goods, Li's speech contained little concrete support for households. (RTRS)
• China pledged to give city governments more say in how they buy unsold homes, as part of efforts to stem the unprecedented property decline. (BBG)
• China will expand a pilot programme for financial asset investment companies to invest in equities, the country's financial regulator announced on Wednesday. (RTRS)
• China plans to reduce the amount of energy it uses to grow its gross domestic product by around 3% in 2025. (BBG)
• China wants its refiners to produce less fuel and more petrochemical products as its electric-vehicle boom alters the country’s consumption of diesel and gasoline. (BBG)
• China's services activity slightly expanded in February, driven by a faster rebound in demand, including export orders, a Caixin survey showed on Wednesday. (RTRS)
• German Bunds have opened sharply lower after the debt plan that was announced late on Tuesday. (Newswires)
• Some global strategists are recommending going long the euro against greenback, citing an improved outlook for the common currency and the region amid efforts to boost spending. (BBG)
• BoJ Governor Ueda said geopolitical tensions could cause a sudden reversal of cross-border capital flows. (RTRS)
• BoJ Deputy Governor Uchida said the bank can proceed with rate hikes at a pace in line with market expectations, but didn't provide any details on how high rates would be hiked, expressing uncertainty over the neutral rate. Said the bank has no immediate plan to sell ETF holdings. (RTRS)
• Japan's UA Zensen, a labour union group representing retail, restaurant and other industry unions, said on Wednesday that its member unions are seeking an average wage hike of 6.11% for their full-time employees in the 2025 wage negotiations, above the baseline 6% target set in January. (RTRS)
• Japan's service activity marked the fastest growth in six months in February, backed by strong sales and new export businesses, according to S&P's PMIs. (RTRS)
• JGB yields march higher with focus on Thursday's 30-yr bond auction. (RTRS)
• Australia's economy expanded at the fastest pace in two years in the December quarter as lavish tax cuts helped spur consumer spending after a long fallow period, though annual growth was still pedestrian compared with the historic trend. (RTRS)
• RBA's Hauser said the board does not currently share market confidence that a sequence of further rate cuts will be required. However, he warned Australia stands to lose if U.S. tariffs on China trigger a global trade war, saying it was one factor that led to a cut last month. (RTRS)
• A tropical cyclone off Australia’s northeast coast that’s menacing the city of Brisbane could derail the government’s plans to call an election, speculated to be on April 12. (BBG)
• RBNZ Governor Orr has resigned and will finish in the role on March 31, New Zealand's central bank said on Wednesday. (RTRS)
• Norway’s oil fund to allocate billions to long-short equity hedge funds. (FT)
• South Korea will actively engage in discussions over a gas pipeline project in Alaska as it is a matter of mutual interest of the two countries, it said, after Trump said in Congress that South Korea, Japan and other countries want to partner with the US in a "gigantic" natural gas pipeline in Alaska. (RTRS)

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GEOPOLITICAL:

• US President Trump said on Tuesday he appreciated Ukrainian President Zelenskiy's willingness to sign a minerals deal with the United States and come to the negotiating table under his leadership to bring a lasting peace closer in Kyiv's war with Russia. (RTRS)
• A consortium of investors led by BlackRock agreed to buy majority stakes in ports on either end of the Panama Canal, putting U.S. firms in control of two ports that President Trump raised as a security concern because of their connection to China. (WSJ)
• China’s defense spending is poised to climb by 7.2% this year, underscoring President Xi Jinping’s ambition to build a military that can challenge the US. (BBG)
• China will work to firmly advance 'reunification' with Taiwan, premier says. (RTRS)
• Japanese PM Ishiba said that other nations do not decide its defence budget after U.S. President Donald Trump's nominee for a top Pentagon policy role called for Tokyo to spend more to counter China. (RTRS)
• Taiwan is learning from companies in Ukraine which continue to operate during the country's fight against Russia, a senior Taiwan official told Reuters on Wednesday, as the island speeds up contingency planning amid heightened Chinese threats. (RTRS)
• Denmark can temporarily afford boosting defense spending more than currently planned without jeopardizing fiscal stability, the Nordic nation’s largest bank said. (BBG)

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EQUITIES:

• Disney is planning to reduce headcount by roughly 6% of the total workforce of ABC News Group and Disney Entertainment Networks, as the entertainment giant grapples with declining TV audience. (RTRS)
• Tesla announced that it would offer an 8,000 yuan ($1,101.90) insurance subsidy for purchases of Model 3 vehicles in China until March 17. (RTRS)
• KKR and Walmart have agreed to sell Japanese supermarket chain Seiyu for about $2.5 billion to Japanese retailer Trial Holdings. (WSJ)
• CrowdStrike falls on dour Q1 revenue forecast. (RTRS)
• Arm has agreed to provide chip designs and technology to Malaysia over the next decade, aimed at catapulting the Southeast Asian country beyond chip assembly and into more valuable semiconductor production. (BBG)
• ASML said in its annual report published that uncertainty over export controls had been one factor weakening customer demand in 2024. Said that a growing number of entities in China are now subject to restrictions and the company faces ongoing risk from increasingly complex restrictions and possible countermeasures. (RTRS)
• Bayer said it expects to report lower earnings this year as it continues to work through a turnaround plan, but performance should improve from 2026. (WSJ)
• Adidas expects to continue to grow this year after it reported higher sales across all markets for the final quarter of 2024 amid continuing weakness of its main rival Nike. (WSJ)
• Dassault Aviation posted a 30% increase in sales, beating market expectations for several key metrics, amid strong performance of its defense business. (WSJ)
• ByteDance plans to buy back employee stock at a valuation of about $312 billion, a significant markup from previous levels. (BBG)
• Country Garden has missed a self-imposed target date to reach a deal on its debt restructuring plan, as the defaulted builder struggles to gain support from creditors. (BBG)