U.S. Stock Markets Surge on Tariff Optimism, Led by Nasdaq
Major U.S. stock indices surged on Monday, closing at multi-week highs as investor optimism grew over President Trump’s mixed tariff signals.
Key Index Performance:
Dow Jones:+1.42% (+597.97 points) to 42,583.32(highest since March 7)
S&P 500:+1.76% (+100.01 points) to 5,767.57(highest since March 7)
Nasdaq:+2.27% (+404.54 points) to 18,188.59(highest since March 7)
Russell 2000:+2.55% (+52.39 points) to 2,109.37(highest since March 3)
Market Drivers:
Tariff Uncertainty Creates Buying Opportunity: President Trump hinted at possible tariff exemptions for certain countries, boosting market sentiment.
Tech Sector Leads Gains: Growth stocks surged, extending the Nasdaq’s outperformance as investors rotated into risk assets.
Rebound After Four Weeks of Losses: Last week, the S&P 500 and Nasdaq snapped a four-week losing streak, fueled by Friday’s rally.
Top Performers:
Tesla (TSLA):+11.93%
MicroStrategy (MSTR):+10.43%
AppLovin (APP):+8.18%
United Airlines (UAL):+7.16%
Advanced Micro Devices (AMD):+6.96%
Palantir (PLTR):+5.34%
Magnificent 7 Performance:
Meta (META):+3.79%
Amazon (AMZN):+3.59%
Nvidia (NVDA):+3.15%
Alphabet (GOOGL):+2.25%
Apple (AAPL):+1.13%
Microsoft (MSFT):+0.47%
The strong gains suggest renewed bullish sentiment, particularly in tech stocks, as investors look beyond tariff uncertainty. The S&P 500 and Nasdaq could extend their uptrend if optimism holds.
U.S. March Flash Services PMI Jumps, Manufacturing Slips Below 50
The S&P Global flash PMI for March indicates a strong recovery in the U.S. services sector, while manufacturing dipped into contraction.
Services PMI:54.3, exceeding the forecast of 50.8. (Prior: 51.0)
Manufacturing PMI:49.8, missing expectations of 51.7 and falling below the growth threshold. (Prior: 52.7)
Composite PMI:53.5, up from 51.6 in February.
Services optimism declined for a second consecutive month, while manufacturing confidence remains strong. Input costs rose at the fastest rate in 23 months, signaling persistent inflationary pressures.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence”
“A welcome upturn in service sector activity in March has helped propel stronger economic growth at the end of the first quarter. However, the survey data are indicative of the economy growing at an annualized 1.9% rate in March and just 1.5% over the quarter as a whole, pointing to a slowing of GDP growth compared to the end of 2024.
“Near-term risks also seem tilted to the downside. Growth is concentrated in the service sector as manufacturing fell back into decline after the front- running of tariffs had temporarily boosted factory output in the first two months of the year. Similarly, some of the March upturn in services was reportedly due to business picking up after adverse weather conditions had dampened activity across many states in January and February, which could prove a temporary bounce.
“Business confidence in the outlook has also darkened, souring further from the buoyant mood seen at the start of the year to one of the gloomiest readings seen over the past three years, largely caused by growing worries over negative impacts from recent policy initiatives from the new administration. Most widely cited were concerns about the impact of Federal spending cuts and tariffs.
“A key concern over tariffs is the impact on inflation, with the March survey indicating a further sharp rise in costs as suppliers pass tariff-related price hikes on to US companies. Firms’ costs are now rising at the steepest rate for nearly two years, with factories increasingly passing these higher costs onto customers. Thankfully, from the Federal Reserve’s perspective, services inflation remains relatively subdued, but this reflects the need to keep prices low amid weak demand, which will harm profits.”
U.S. February National Activity Index Rises to +0.18
The Chicago Fed’s National Activity Index for February improved to +0.18 from a revised -0.08 in January.
The index, a composite of 85 economic indicators, suggests a modest rebound in overall economic activity. While individual components have already been released, the composite figure provides a clearer view of economic trends.
Fed’s Bostic: Inflation to Remain “Sideways” Through 2025
In recent comments, Atlanta Fed President Raphael Bostic shared his outlook on inflation, suggesting that price levels may remain “pretty much sideways” throughout this year.
Inflation Target: Bostic does not expect inflation to return to the Fed’s 2% target until sometime in 2027.
Interest Rate Outlook: He adjusted his “dot plot” projection to include just one rate cut this year, down from the previous forecast of two.
Economic Uncertainty: Bostic noted increasing uncertainty about the economic outlook, despite current data not yet fully reflecting those concerns.
Labor Market Insight: Businesses report that employment is not a major issue, and hiring remains steady. However, there are growing worries about potential medium- to long-term inflationary pressures.
Bostic’s cautious stance aligns with the broader uncertainty surrounding the U.S. economy as businesses navigate shifting economic conditions and inflationary risks.
President Trump to Announce New Tariffs on Autos, Aluminum, and Pharmaceuticals
President Donald Trump announced plans to impose tariffs on automobiles, aluminum, and pharmaceuticals, with further details expected soon.
Tariff Impact: Trump emphasized that tariffs will help keep U.S. taxes low while protecting domestic industries. However, he hinted that not all tariffs will take effect on the anticipated April 2 “Liberation Day”, when the new trade measures are set to be unveiled.
Greenland Discussions: Trump disclosed that talks with Greenland regarding national security interests are ongoing, though specifics remain limited.
Additional Tariffs: The president mentioned that tariffs on lumber and semiconductor chips may also be announced.
Venezuela Trade Restrictions: Any tariffs imposed on trade with Venezuela will be layered on top of existing restrictions.
Trump’s tariff strategy appears to balance protectionist measures with potential exemptions for key allies, suggesting a more selective approach to trade policy.
White House Adjusts Tariff Strategy Ahead of April 2 Announcement
According to a Wall Street Journal report, the White House is refining its approach to the upcoming April 2 tariff rollout. Initially expected to include broad, sector-specific tariffs on industries like automobiles, pharmaceuticals, and semiconductors, the administration now appears to favor targeted, reciprocal tariffs aimed at nations with significant trade ties to the U.S.
President Trump has referred to April 2 as “Liberation Day”, a symbolic launch date for these tariffs. However, a White House official noted that industry-specific tariffs are unlikely to be announced on that day, with details still evolving. Tariffs previously linked to Canada and Mexico over fentanyl concerns remain uncertain, and the administration has not confirmed if or when they will proceed.
Trump to Revoke Temporary Legal Status for Over Half a Million Migrants
The Trump administration has announced it will revoke the temporary legal status of more than 500,000 migrants from Cuba, Haiti, Nicaragua, and Venezuela, effective April 24.
Labor Market Implications:
Many of these migrants have been working legally in the U.S. under the humanitarian parole program.
Sectors like agriculture, construction, hospitality, and healthcare—which heavily rely on immigrant labor—could face immediate labor shortages.
The loss of this workforce could push wage costs and inflation higher as businesses compete to fill vacancies.
Canada PM Carney: Says he is available for a call with US Pres. Trump
New PM Mark Carney speaking on relation with Pres. Trump
He is available for a call with US Pres. Trump
Canada will talk on “our terms as a sovereign country”
Assumes Trump is waiting to see who wins general election before calling the winner
Mark Carney Calls April 28 Election in Canada
Canadian Prime Minister Mark Carney has officially called a federal election for April 28, a move that was widely anticipated.
Carney immediately began campaigning, proposing a reduction in the lowest income tax bracket by one percentage point as a central piece of his economic platform. This announcement marks the beginning of a brief but intense campaign period, with economic issues and trade policy expected to dominate the agenda.
Gold prices fell 0.67% to $3,002 on Monday, marking a third consecutive day of declines amid easing trade fears and rising U.S. Treasury yields.
Tariff Update: The Trump administration’s decision to focus reciprocal tariffs on the “Dirty 15” trade partners, rather than broadly targeting most countries, has improved market sentiment.
Fed Commentary: Fed’s Raphael Bostic expressed support for just one rate cut in 2025, delaying expectations for inflation to return to target until 2027.
Market Indicators: The U.S. Dollar Index (DXY) rose 0.20% to 104.35, reflecting dollar strength. Meanwhile, the March S&P Global Manufacturing PMI dropped below the expansion threshold to 49.8, indicating contraction, while the services PMI rose to 54.3, suggesting solid growth.
Despite easing trade fears, the strength of the U.S. dollar and rising bond yields continue to weigh on gold’s appeal as a safe-haven asset.
Silver: Break Above $34-$35 Could Attract Significant Capital Inflows – TDS
Silver prices are gaining attention from macro funds, as a potential breakout above the $34-$35 level could spark significant capital inflows, according to TDS Senior Commodity Strategist Daniel Ghali.
Market Positioning: Advanced analytics show that macro funds have increased their net positions to the highest level since 2018, signaling a potential silver squeeze.
Liquidity Constraints: London’s liquidity remains tight, adding further pressure on supply. Elevated lease rates suggest speculative inflows are beginning to materialize.
CTA Impact: As Commodity Trading Advisors (CTAs) increase their positions, further inflows from discretionary traders could drive silver prices higher.
While physical demand for silver remains limited, speculative buying and constrained liquidity suggest the potential for a significant price surge.
Oil Prices Face Resistance at $72.75, Downside Risks Loom – Société Générale
Brent crude oil briefly rebounded to $68.70, but Société Générale analysts caution that an inability to break through the $72.75 resistance could lead to a deeper decline.
Technical Analysis: A sustained move above $72.75 is crucial to confirming a recovery. However, a drop below last week’s low of $70.00 could open the door to further downside.
Market Context: OPEC+ plans to restore 2.2 mbpd of output through 2025, while global economic uncertainty weighs on demand prospects.
Bearish Outlook: Failure to reclaim $72.75 may extend the current downtrend, potentially revisiting September’s low of $68.70.
As concerns over global growth persist, Brent’s struggle to break resistance suggests a challenging path ahead for the oil market.
OPEC+ Plans to Continue Gradual Oil Output Increases in May
OPEC+ is expected to continue its strategy of gradually restoring 2.2 million barrels per day (mbpd) of oil output over the next year, according to sources cited by Reuters.
WTI crude was trading at $68.86, up 59 cents, ahead of the announcement.
OPEC+ aims to balance oil market stability while accommodating demand growth.
With uncertainties over global growth and tariff-related risks, OPEC+ is cautious in its approach to avoid oversupplying the market.
Copper Prices Supported by Expectations of Global Supply Shortages
According to Westpac, copper prices are benefiting from expectations of a tighter global supply.
Key Factors:
U.S. copper premiums have surged 14% above London Metal Exchange (LME) prices, driven by the possibility of 25% tariffs on the metal later this year.
The tariff threat has spurred a rush of copper shipments to the U.S., raising concerns about potential supply shortages elsewhere in the global market.
As global demand stabilizes, the market anticipates a prolonged supply deficit, potentially sustaining elevated prices.
Eurozone March Flash PMI Shows Divergence Between Manufacturing and Services
The Eurozone’s HCOB flash PMI for March depicts a contrasting scenario: manufacturing growth reaches a multi-year high while services weaken.
Services PMI:50.4, below the expected 51.0, marking a 4-month low. (Prior: 50.6)
Manufacturing PMI:48.7, beating expectations of 48.2 and marking a 26-month high. (Prior: 47.6)
Composite PMI:50.4, slightly under the forecasted 50.8 but higher than February’s 50.2.
While manufacturing shows some resilience, services face challenges due to weak new business inflows. Employment conditions show signs of stabilizing, but economic uncertainty continues to weigh on sentiment.
HCOB notes that:
“Just in time with the beginning of spring we may see the first green shoots in manufacturing. While we should not be carried away by a single data point, it is noteworthy that manufacturers expanded their output for the first time since March 2023. It’s also encouraging, that the index output has risen for three months straight. This is complemented by a much softer fall in new orders and employment. One could pour some cold water on this development arguing that it’s the temporary tariff related import boom from the US which has driven the improvement in manufacturing. However, given the will of Europe, to invest heavily in defense and infrastructure – in Germany a corresponding historical fiscal package has been approved only last week – hope for a more sustained recovery seems well founded.
“The price development in the services sector, which is very much under scrutiny of the ECB, will be well received by the doves of the monetary authority. Both input costs and selling prices are rising at a slower pace compared to recent months. Lower input cost inflation points to less pressure from wages which are a key ingredient of input costs in the labour intensive services sector. Meanwhile, in manufacturing, price increases for both selling and purchasing remain moderate, helped along by declining energy costs. However, there are still plenty of risks on the ECB’s radar, like potential retaliation tariffs from the US, measures to curb goods coming from China, and higher food prices spurred by extreme weather. These factors, coupled with overall uncertainty, make some ECB members hesitant to cut rates too aggressively.
“Interestingly, Germany outperformed its key European trading partner France in March in both manufacturing output and services activity. Still, if we zoom out and look over the past two years, France’s industry has only contracted by about 1% since early 2023, while Germany’s has dropped by roughly 8%. In this respect, Germany has a lot of catching up potential.
“Business expectations are well below average in the services sector and at average in manufacturing, which is of small wonder given the challenges companies are faced with amid the challenges around tariffs, geopolitical tensions and uncertainties surrounding monetary policy. There is some likelihood, that Europe seizes the opportunity and shows more unity with respect to reforms, defense spending, and completing the capital market union, to name a few things. This could send a clear message that Europe’s position as a key business hub is set to strengthen in the years ahead.”
Germany’s March Flash Manufacturing PMI Surpasses Expectations, Services Weaken
Germany’s HCOB flash PMI for March reveals a mixed picture as manufacturing shows resilience while the services sector experiences a slowdown.
Manufacturing PMI:48.3 vs. 47.0 expected, reaching a 31-month high. (Prior: 46.5)
Services PMI:50.2, falling short of the 51.6 forecast and reaching a 4-month low. (Prior: 51.1)
Composite PMI:50.9, slightly below the expected 51.0, yet up from 50.4 previously.
The data indicates that Germany’s manufacturing sector is recovering, driven by a rebound in production. However, the services sector’s decline hints at persistent challenges, particularly in consumer-facing industries impacted by inflation and weak demand.
Commenting on the flash PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“What a pleasant surprise – manufacturers have ramped up production for the first time in nearly two years. This didn’t just come out of nowhere, though. The output index has risen in five of the past six months. It might be linked to the import boom from the US, where companies are snapping up goods from abroad to get ahead of looming tariffs. If that’s the case, we could see a bit of a setback once those tariffs kick in. On the bright side, Germany’s massive infrastructure and defence package, recently greenlit by both parliamentary houses, could give manufacturing a moderate boost in the near future. It’s likely to instil some much-needed confidence in Germany as a business hub.
“Economic growth in the first quarter looks promising, with the composite PMI staying above the expansionary threshold every month. Thanks to the fiscal package, this could mark the beginning of a more sustained recovery. Of course, there are risks – US tariffs and a sluggish services sector, which barely grew in March, are worth keeping an eye on. But with a new government likely to form in the coming weeks, confidence might rebound quickly. In fact, the PMI survey shows that firms in both manufacturing and services are feeling more optimistic about future output.
“While manufacturers seem to be finding their footing, service providers are hitting the brakes. Service activity nearly stagnated in March, and new business took a sharp dive. To make matters worse, service companies couldn’t raise selling prices as much as they had in recent months. That said, the expansionary fiscal policy should start making waves in the second half of the year, boosting the service sector as infrastructure and defence projects drive up demand. Most of the real impact, though, will likely be felt in 2026.
“Employment is somewhat less under pressure in manufacturing and growing at a continued moderate pace in services. This may be an indication that the German economy is bottoming out. It means there is a chance of a cyclical upturn and the fiscal package more than compensating for the damage that will most likely be done by the tariff policy of the US.”
France’s March Flash PMI Shows Modest Improvement, But Business Sentiment Remains Weak
The HCOB flash PMI data for March shows slight improvements in France’s business activity, but the country’s private sector remains in contraction.
Services PMI:46.6, above the 46.3 expected, but still below the 50.0 threshold indicating growth. (Prior: 45.3)
Manufacturing PMI:48.9, exceeding expectations of 46.4 and significantly higher than February’s 45.8.
Composite PMI:47.0, above the anticipated 46.5, improving from 45.1 last month.
While the uptick in the manufacturing sector offers some optimism, overall demand remains weak, and job losses continue. Business confidence is at a five-year low, suggesting further economic struggles ahead despite the marginal gains.
HCOB notes that:
“France’s economy is struggling to gain momentum. Although the HCOB French Flash PMI improved in March compared to the previous month, it remains in contraction territory. The French political landscape, which has significantly negatively impacted market sentiment in recent months, is now somewhat less unstable. France passed a delayed budget law for 2025 in February which helped it avoid a downgrading of its credit rating, but there is still a high degree of uncertainty regarding future economic policy.
“While the French industry is struggling, there are signs of improvement. The Flash Manufacturing PMI made a significant leap compared to the previous month, though it still signalled a deterioration in operating conditions. Uncertainty both domestically and internationally, competitive pressures, and subdued demand in key sectors such as automotive, construction, and agriculture were cited as reasons for the muted outlook, although hopes for improved activity did rise to their strongest level in nine months.
“Meanwhile, the HCOB flash PMI data for services offers no relief for this sector in March. Although there was a softer decrease in business activity compared to the previous month, the rate of decline remained solid. Economic uncertainty, geopolitical tensions, and reduced demand are weighing on service sector output. The only reassuring news is that input cost pressures have somewhat eased, and service providers’ pricing power has slightly increased.”
UK March Flash Services PMI Surges, But Manufacturing Slumps
The S&P Global flash PMI for the UK shows a strong recovery in the services sector, but manufacturing remains under significant pressure.
Services PMI:53.2, well above the expected 50.9 and marking a 7-month high. (Prior: 51.0)
Manufacturing PMI:44.6, sharply below the forecast of 46.4, at an 18-month low. (Prior: 46.9)
Composite PMI:52.0, exceeding expectations of 50.3 and reaching a 6-month high.
The rebound in services reflects improved consumer spending, while manufacturing faces headwinds from weaker exports, rising input costs, and labor shortages.
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:
“An upturn in business activity in March brings some good news for the government ahead of the Chancellor’s Spring Statement, offering a respite from the recent flow of predominantly downbeat economic data. However, just as one swallow does not a summer make, one good PMI doesn’t signal a recovery.
“The signal from the flash PMI is an economy eking out a modest expansion in March, consistent with quarterly GDP growth of just 0.1%, but with employment continuing to be cut thanks to concern over costs and the uncertain outlook. Confidence is still running close to January’s two-year low.
“The improvement is also being driven by only small pockets of growth, notably in financial services, with consumer-facing business and manufacturers continuing to struggle against headwinds both at home and abroad.
“These headwinds include the additional costs imposed on businesses in the Budget, low confidence among businesses and households, and sluggish demand at home and abroad, the latter linked to heightened geopolitical uncertainty resulting from US tariff policies.
“Worryingly, these headwinds are likely to grow in force as higher National Insurance contributions come into effect in April, coinciding with the anticipated review of US tariff policy on 2nd April, the latter having the potential to further subdue global economic growth and dampen UK trade.”
Swiss National Bank (SNB) Sight Deposits Show Minimal Change
The Swiss National Bank (SNB) reported total sight deposits at CHF 440.4 billion for the week ending March 21, down slightly from CHF 440.7 billion previously.
Domestic sight deposits:CHF 449.2 billion, up from CHF 448.5 billion.
The minimal change in sight deposits suggests stable liquidity conditions in the Swiss banking system, with no significant market interventions by the SNB.
BOE’s Bailey: We are seeing businesses delay investment due to uncertainty
Comments from Bailey
Businesses are currently keeping all options open on how to respond to national insurance rise
There are strong headwinds against boosting potential growth
We must facilitate AI as the most likely general-purpose tech that can move the needed on growth in the economy
We must also invest in new skills in the labour force
We have been forcefully reminded that trade policy has to include a national security dimension
ECB’s Makhlouf says not going to comment on April rate cut
Remarks by ECB policymaker, Gabriel Makhlouf
Things are moving in the right direction
Disinflation is working
But not going to comment on rate cut for April
HSBC now sees BOE shifting to cut bank rate once every quarter from September
The projection here will follow from their forecast for rate cuts in May and August
The terminal rate that the firm sees the BOE cutting to is still 3%, in which they view as “neutral”. But “with the near-term cost headwinds”, they are revising their forecast timeline in seeing the central bank now cutting once every quarter starting from September. That will mean reaching the 3% estimate in Q3 2026. HSBC adds that “there are risks in both directions” now.
HSBC still sees the BOE cutting the bank rate in May and August but previously anticipated a rate cut “at every meeting from September 2025 to February 2026” to a 3% terminal rate.
ECB’s Cipollone: Inflation target may be reached sooner than last projections indicated
Remarks by ECB executive board member, Piero Cipollone
Key elements strengthens the case for further rate cuts
Current conditions make further policy easing conceivable
EU Officials Question Reliability of U.S. Fed for Dollar Funding During Market Stress
A Reuters report reveals that European central bankers and regulators are questioning the reliability of the U.S. Federal Reserve to provide dollar liquidity in times of severe market stress.
Despite the Fed’s historical commitment to backstopping dollar funding, concerns have emerged due to the Trump administration’s departure from traditional U.S. policy frameworks. Although sources within the discussions believe it is unlikely that the Fed would suspend its support, the uncertainty reflects broader anxieties about potential U.S. political pressure on the central bank.
China reaffirms to implement more proactive fiscal policy in 2025
China’s Ministry of Finance issues a report on fiscal policy implementation
To prioritise boosting domestic consumption
To support all-round expansion of domestic demand
Will foster new quality productive forces to sustain economic growth
Malaysia to Tighten Oversight of Semiconductor Exports to China
Malaysia is preparing to strengthen its oversight of semiconductor exports to China, focusing on high-end Nvidia AI chips, following pressure from the U.S. to prevent unauthorized transfers.
Trade Minister Zafrul Aziz confirmed that the U.S. has requested Malaysia ensure these chips reach only approved data centers as part of broader efforts to restrict China’s access to advanced technology.
Context:
The move follows a $390 million fraud case in Singapore involving Nvidia chips suspected of being rerouted through Malaysia.
Malaysia has become a major data center hub, attracting over $25 billion in investments from global tech firms.
A special task force led by Digital Minister Gobind Singh Deo has been established to tighten regulation and enhance compliance.
Ant Group Develops AI Models Using Chinese-Made Chips, Cuts Training Costs
Ant Group has successfully developed AI models using Chinese-made chips from Alibaba and Huawei, reducing training costs by approximately 20%.
Using a Mixture of Experts (MoE) model approach, Ant has reportedly achieved performance levels comparable to Nvidia’s restricted H800 chips.
While Ant still uses Nvidia and AMD hardware, it increasingly relies on domestic alternatives.
The shift aligns with China’s strategy to build a self-sufficient AI ecosystem amid U.S. export controls.
Ant claims its models have outperformed Meta’s on specific benchmarks, although these results remain unverified.
Morgan Stanley Raises China’s 2025 GDP Growth Forecast to 4.5%
Morgan Stanley has increased its 2025 GDP growth projection for China from 4.0% to 4.5%, citing:
Stronger-than-expected consumer spending following the easing of COVID-19 restrictions.
Increased infrastructure investment and targeted fiscal stimulus.
A more favorable export environment amid a potential stabilization of U.S.-China trade relations.
PBOC sets USD/ CNY reference rate for today at 7.1780 (vs. estimate at 7.2496)
PBOC CNY reference rate setting for the trading session ahead.
PBOC injects 1353bn yuan via 7-day RR, sets rate at 1.5%
481bn yuan mature today
net drain is 346bn yuan
Barclays says further PBOC easing is becoming increasingly unavoidable
Analysts at the bank point to low inflation, muted domestic demand, and growing tariff tensions
According to Barclays economists, China’s persistently low inflation, muted domestic demand, and growing tariff tensions are likely to prompt the People’s Bank of China (PBOC) to implement further monetary easing in the coming months.
While the easing may not be immediate, Barclays says it’s becoming increasingly unavoidable. Factors such as expected U.S. Federal Reserve rate cuts, reduced pressure on the yuan, and a rebound in Chinese bond yields are giving the PBOC more flexibility to act.
Barclays maintains its forecast for a 20 basis point policy rate cut this year—split between two 10 bp cuts, one in Q2, and the other later in the year. It also expects 50 to 100 basis points of reserve requirement ratio (RRR) cuts to support liquidity and growth.
Japan and China met on Saturday for talks on their economies
It was the first meeting between Asia’s two largest economies in six years
Japan and China resumed economic talks in Tokyo on Saturday—their first in six years—in an effort to ease tensions between the two countries amid growing trade pressure from the United States.
When asked if U.S. tariffs were part of the discussions, Japanese Foreign Minister Takeshi Iwaya said they were not a central focus in any of Saturday’s meetings. He added that Japan and South Korea had agreed to maintain close cooperation and keep open communication with the U.S., following separate talks held with South Korea earlier that day.
He did not provide details on what was discussed with China’s Wang concerning U.S. tariffs.
Turkey turmoil – short selling banned on Istanbul Stock Exchange
Political chaos in Turkey translating to the same in markets there
Turkey’s Capital Markets Board bans short selling transactions on Istanbul Stock Exchange for 1 month
Decides to ease equity ratio requirement when making credit capital markets transactions
Removes maximum limit for total amount to be used for share buybacks of listed companies
Meanwhile, at the Turkish central bank, The Central Bank of the Republic of Turkey, the governor said the bank pays attention that measures are market friendly
Turkish cenbank told a meeting with bank executives it will do whatever necessary within market rules, meeting participants say
Turkish cenbank seems determined to take every measure whenever necessary, participant says
Via Reuters report:
The central bank declined to comment on the meeting, which tool place hours after Istanbul Mayor Ekrem Imamoglu was jailed pending a trial on corruption charges. Turkish assets sold off sharply last week when he was detained.
Australian Manufacturing PMI Rises Sharply to 52.6
Australia’s S&P Global Flash Manufacturing PMI for March jumped to 52.6 from 50.4, indicating an expansion in factory activity.
Services PMI increased to 51.2 from 50.8, and the Composite PMI rose to 51.3 from 50.6.
Improved output and new orders led to the strongest manufacturing expansion since mid-2023.
The data suggests that domestic demand remains resilient despite global economic uncertainties.
Japan’s March Manufacturing PMI Falls to 48.3, Fastest Decline in a Year
Japan’s Jibun Bank Flash Manufacturing PMI for March fell to 48.3, indicating the steepest decline in factory activity since last year.
Key Highlights:
Services PMI dropped to 49.5 from 53.7.
Composite PMI fell to 48.5 from 52.0, reflecting a contraction in private-sector business activity.
Firms reported rising input costs and weaker demand, leading to reduced production.
Export orders saw a slight increase, supported by strong demand from the services sector.
Business sentiment reached its lowest level since August 2020, reflecting persistent inflationary pressures and weakened domestic demand.
Toyota to postpone its plan to build lithium-ion battery factory in Fukuoka
Toyota cite slowing demand for EVs
Asahi (Japanese media outlet) with the report:
Toyota to postpone its plan to build lithium-ion battery factory in Fukuoka
Toyota cite slowing EV demand
BoJ Uchida – will continue raising rates if achieving economic, price outlook rises likely
Bank of Japan Dep Gov says essential for foreign exchange to move in stable way
will continue raising interest rates if likelihood of achieving economic, price outlook rises
essential for foreign exchange to move in a stable way
The next Bank of Japan meeting is likely a ‘live one’ given stick high food prices
May 1 rate hike is not consensus
Reuters carry the article, which is more or less an opinion piece, but its does cite other analysts, and makes pertinent points.
In brief:
growing signs of sticky food inflation, which adds to prospects of sustained wage increases, will likely keep the BOJ on course to raise rates
the BOJ can incorporate to some extent the potential impact from Trump tariffs in its quarterly outlook report due at its next meeting on April 30-May 1, Ueda said, signalling a rate hike at the meeting cannot be completely ruled out even though current consensus is for a tightening to occur around the third quarter
“The BOJ doesn’t have control over supply shocks like rising food prices, but what’s important is how long this will last,” said a source familiar with the bank’s thinking. “If it persists, it could materially change the way people see future price moves and justify rate hikes,” another source said on rising food costs.”
Japan Finance Minister Kato: Will take appropriate action against excessive moves
Important for currencies to move in stable manner reflecting fundamentals
Will take appropriate action against excessive moves
Bank of Japan Governor Ueda: Have been gradually tapering long-term JGB holdings
Bank of Japan Governor Ueda
Can not sell long-term JGB holdings immediately
Have been gradually tapering long-term JGB holdings
BoJ reaped 33 trillion yen from ETF holdings in first fiscal half of 2024
Will adjust degree of monetary easing if 2% target is likely to be achieved
Our policy aim is to achieve stable prices, won’t be disturbed by considerations of state finances
Believe confidence in currency is maintained by appropriate monetary policy aimed at achieving stable prices
Will conduct appropriate monetary policy to achieve 2% target in stable, sustainable manner
Will not rule out possibility of selling BOJ government bond holdings
South Korea’s Constitutional Court dismisses impeachment of prime minister
South Korea media reporting
South Korea’s Constitutional Court striked down the impeachment motion against Prime Minister Han Duck-soo
Restores his powers
Han took over as acting leader from President Yoon Suk Yeol, who was himself impeached over his short-lived declaration of martial law last year.
Prime Minister Han lasted less than two weeks in the post
Bitcoin (BTC) rebounded on Monday, gaining 2.7% during early U.S. trading as softer tariff rhetoric from the Trump administration restored market confidence.
Technical Outlook: Bitcoin broke through a key resistance at $86,113, marking a breakout from a multi-day triangle pattern.
Next Resistance Levels: BTC faces critical barriers at $89,168 (Fibonacci 38.2% retracement) and the $90,000 psychological level. Further gains could target $91,295 (55-day moving average) and $93,066 (Fibonacci 50% retracement).
Support Levels: Immediate support lies at $87,497, with stronger levels at $86,113, $84,500, and $83,098.
Market sentiment has been buoyed by signals that Trump’s administration may target only specific trade partners with tariffs, reducing fears of a broad-based trade conflict.
Ethereum Faces Further Decline as Transaction Fees Hit Record Lows
Ethereum’s transaction fees have fallen to all-time lows, weighing on the altcoin’s performance. According to Grayscale Research, declining fees have played a significant role in ETH’s underperformance during this market cycle. If Ethereum can break past the $2,069 resistance, it may rise to $2,200.
Impact of Falling Transaction Fees:
Declining Fees and On-Chain Activity: The recent drop in Ethereum’s transaction fees has coincided with a broader market downturn fueled by President Trump’s tariff policies. Over the past two months, ETH has fallen by more than 35%, with increased market sensitivity to macroeconomic trends.
ETF Outflows: U.S. spot Ethereum exchange-traded funds (ETFs) recorded 13 consecutive days of net outflows last week, losing nearly $390 million.
Plunging Transaction Count: Ethereum’s average transaction count has dropped to levels last seen before Trump’s presidential election victory, exacerbating the decline in on-chain activity.
Reduced ETH Burn Rate: With transaction fees declining, the daily amount of ETH burned has reached all-time lows, contributing to an inflationary supply trend. Data from Ultrasound.money shows that the annual ETH burn rate has fallen to 25,000 ETH/year, while supply growth has climbed to 0.76% annually.
Staking and Market Sentiment:
Lower transaction fees also impact staking rewards, potentially leading stakers to unstake their tokens, expanding ETH’s circulating supply. Grayscale Research emphasizes that the market’s focus on fee revenue explains ETH’s underperformance, noting that competing platforms like Solana have gained market share due to more stable fee structures.
“Since the end of 2023, Solana has gained fee revenue and market share in the Smart Contract Platforms Crypto Sector, while Ethereum has lost fee revenue and market cap,” the report states.
Technical Outlook:
Ethereum tested the $2,069 resistance of a rectangular channel, bouncing off the descending support level last week.
Bullish Scenario: A sustained breakout above $2,069 could propel ETH to $2,267.
Bearish Scenario: Rejection at this resistance may lead to a decline toward the $1,818 support level.
Market Data: In the past 24 hours, Ethereum saw $42.43 million in futures liquidations, with $31.83 million from short positions. The heightened volatility suggests cautious sentiment, making the $2,069 resistance a critical level to watch.
ICYMI – Trump adviser said (Friday) US may sell gold to buy Bitcoin
Robert “Bo” Hines, executive director of the President’s Council of Advisers on Digital Assets
Robert “Bo” Hines, executive director of the President’s Council of Advisers on Digital Assets spoke with media on Friday
if the move to sell some of the gold in Fort Knox to buy Bitcoin remained budget-neutral, it could be considered
This is of interest because in Trump’s announcement of a Bitcoin Reserve earlier this month he said the government will acquire any Bitcoin in the future through “budget-neutral” ways.
Later in Hines’ interview he referred to Senator Lummis’ BITCOIN bill as an example of a budget-neutral way to buy Bitcoin.
The Lummis legislation, in brief:
to create a bitcoin strategic reserve
would direct the government to purchase 1 million bitcoins over five years
funds for the bitcoin purchases would come from “diversifying existing funds” in the Federal Reserve system
The chair of UK investment bank Cavendish has proposed a tax on cryptocurrency purchases
In order to encourage more investment in British stocks
Lisa Gordon, chair of UK investment bank Cavendish, has proposed a tax on cryptocurrency purchases to encourage more investment in British stocks. She suggests introducing a stamp duty on crypto, similar to the 0.5% tax on London Stock Exchange shares, which already brings in substantial revenue.
Gordon argues that this move could shift investment toward equities, helping fund innovative UK companies and supporting the broader economy. She highlighted that more than half of Britons under 45 own crypto but not stocks, and believes redirecting some of that capital could boost economic productivity.
While crypto ownership is growing, Gordon called it a “non-productive asset” with little contribution to the economy. She also acknowledged that many people are scaling back their investments due to the cost-of-living crisis, making it even more important to guide limited capital toward assets that drive growth.
U.S. stock indices closed sharply higher, driven by optimism over President Trump’s mixed tariff signals. Despite uncertainty, markets reacted positively to the possibility of tariff exemptions and a more selective approach to trade measures.
Dow Jones: +1.42% to 42,583.32
S&P 500: +1.76% to 5,767.57
Nasdaq: +2.27% to 18,188.59
Russell 2000: +2.55% to 2,109.37
Sector Highlights:
Tech stocks led gains, with notable performances from Tesla (+11.93%), MicroStrategy (+10.43%), and Amazon (+3.59%).
The Magnificent 7 saw a mixed but overall positive performance, reinforcing the tech sector’s leadership.
Key Takeaway: Investors seem cautiously optimistic, leveraging opportunities from potential tariff exemptions while navigating mixed messages from the Trump administration.
Canada: Mixed Economic Signals and Political Developments
Mark Carney officially announced a federal election for April 28, with tax reduction proposals at the center of his campaign.
Manufacturing data showed a 1.7% increase in January sales, yet growth fell short of expectations, indicating potential headwinds for the Canadian economy.
Key Takeaway: Political uncertainty and the potential impact of U.S. trade policy remain central to Canada’s economic outlook.
Europe: Resilience and Divergence Across Economies
Germany’s Manufacturing PMI rose to 48.3, the highest in 31 months, while the services sector slipped to a 4-month low at 50.2.
France’s Composite PMI improved slightly to 47.0, but business confidence remains near five-year lows.
The Eurozone Composite PMI edged up to 50.4, signaling modest growth with contrasting performances between manufacturing and services.
The UK Services PMI surged to 53.2, a 7-month high, while manufacturing fell sharply to 44.6, reflecting persistent sectoral disparities.
Key Takeaway: While there are signs of manufacturing resilience in Germany, broader business sentiment across Europe remains fragile amid persistent economic uncertainty.
Commodities: Pressures and Price Dynamics
Gold fell below $3,010 amid easing trade fears and rising U.S. Treasury yields. Fed’s Bostic’s comments on inflation stabilization by 2027 further pressured the precious metal.
Silver is approaching a potential breakout above $34-$35, attracting speculative interest as macro funds increase their net positions.
Oil prices are struggling to overcome the $72.75 resistance. Societe Generale warns of further downside if Brent crude fails to maintain momentum.
Copper prices remain supported by anticipated supply shortages and potential 25% tariffs, driving a rush of shipments to the U.S.
Key Takeaway: Commodity markets reflect cautious sentiment, balancing tariff uncertainties, inflation expectations, and global economic pressures.
Crypto Market: Recovery Amid Mixed Signals
Bitcoin rallied 2.7%, breaking resistance at $86,113, driven by softer tariff rhetoric. However, critical resistance at $90,000 remains a challenge.
Ethereum struggles near $2,080 as transaction fees hit all-time lows. Grayscale cites declining fees as a fundamental driver of ETH’s underperformance, exacerbated by a record outflow of $390 million from ETH ETFs.
The broader crypto market shows tentative recovery but remains sensitive to macroeconomic developments and tariff news.
Key Takeaway: Bitcoin shows resilience, but Ethereum’s struggles with reduced fees and increased inflationary pressures highlight structural concerns.
Final Insights:
Tariff Uncertainty: The approach to April 2 tariffs remains a significant market catalyst. While potential exemptions offer relief, the lack of clarity creates volatility.
Inflation Outlook: Fed’s Bostic projects a long path to inflation stabilization, suggesting prolonged economic challenges.
Global Economy: Diverging PMIs across regions indicate uneven recoveries, with Europe facing more structural challenges.
Crypto Dynamics: Bitcoin’s rebound reflects speculative optimism, while Ethereum’s declining transaction fees point to deeper market re-evaluation.
Stay updated with the latest market insights, financial trends, and expert trading analysis. Explore key developments shaping the financial world today.
