Market Report.
📈 Markets begin to recover after weeks of scares. A string of good news could be coming in the next few weeks: peace agreement in Ukraine, new deal with Iran, negotiations with China and Fed backing for lower interest rates.
🤝 Treasury Secretary Scott Bessent told investors in a private meeting that he expects “there will be a de-escalation” in President Trump’s trade war with China in the “very near future.”
💬 Bessent said “no one thinks the current status quo is sustainable” with tariff rates at their current high levels, and that the prospect of de-escalation “should give the world, the markets, a sigh of relief.”
⚖️ Bessent acknowledged that the U.S. and China currently have an “embargo” of tariffs on each other’s goods, but insisted that the goal is not to “decouple” the two economies.
📢 White House press secretary Karoline Leavitt echoed Bessent’s positive outlook, saying Trump is “setting the stage for a deal with China” and that “the ball is moving in the right direction.” However, Leavitt did not confirm whether Trump has spoken directly with Chinese President Xi Jinping about the trade negotiations.
🏦 President Donald Trump said yesterday he has “no intention” of firing Federal Reserve Chair Jerome Powell before his term ends in 2026. This represents a dramatic shift from Trump’s recent rhetoric, where he had ramped up criticism of Powell and did not rule out the possibility of firing him. Trump said he would like to see Powell be “a little more active” in lowering interest rates, stating this is a “perfect time” to do so.
⚠️ Critics have warned that removing the independent Fed chair would cause panic in the financial markets.
🌏 Chinese Foreign Minister Wang Yi urged Britain and the European Union to safeguard multilateral trading systems, as Beijing seeks support from trading partners to counter U.S. tariff measures. Wang accused the U.S. of “weaponising tariffs” and “openly violating WTO rules” through its trade actions, saying China and Britain have a responsibility to uphold international order.
🚨 This comes after Beijing warned countries against striking broader economic deals with the U.S. at China’s expense, threatening countermeasures if they do so. Chinese President Xi Jinping has appealed directly to the EU to join forces in defending globalization, and Beijing and Brussels have quietly intensified economic coordination.
🚢 According to Port Optimiser, a ship tracking system, the number of freight vessels departing China and travelling to the ports in Southern California, which are the primary U.S. ports receiving Chinese freight and other Asian commerce, has decreased by 29% week over week. According to the statistics, the number of vessels planned to arrive during the week of May 4–10 has decreased by 44% year over year.
💶 In Europe, annual Eurozone inflation dipped as expected to 2.2% in March, down from 2.3% in February, according to flash data from Eurostat. The lower-than-expected inflation data has boosted expectations for a 25-basis-point interest rate cut by the European Central Bank at its upcoming meeting on April 17. This is a crucial moment for pairs such as EURUSD, which are facing a price of 1.15, potentially the last high in a long time.
📉 Separately, the seasonally adjusted unemployment rate in the Eurozone fell to 6.1% in February, continuing its recent downward trend.
🌐 Top ECB official Francois Villeroy de Galhau stated in New York that President Donald Trump has committed the entire globe to a “lose-lose game” on trade based on faulty economic grounds, endangering financial stability.
🏛️ Villeroy called for preserving the International Monetary Fund (IMF) and the World Bank, albeit with a narrower focus. Villeroy said the two Washington-based institutions, which are linchpins of the liberal international order, should continue to exist despite doubts cast by the Trump administration.
📜 The IMF and World Bank were originally set up after World War II to help rebuild and support war-torn economies in Europe and Japan, but in recent years have expanded their focus to issues like climate change and diversity.
📊 Villeroy also reiterated the Bank of France’s estimate that the tariffs announced by Trump on April 2 (and since paused) would shave at least 25 basis points off Eurozone growth this year, with a potentially negative impact on inflation. ECB Vice President Luis de Guindos also commented that the tariffs would initially push up inflation before the lower economic activity they generate brings it back down.
🚗 German automaker BMW plans to start integrating artificial intelligence (AI) from Chinese startup DeepSeek in its new models in China starting later this year. BMW CEO Oliver Zipse made the announcement at the Shanghai auto show, stating that “key advances in AI are happening here” in China. Zipse said BMW is “strengthening AI partnerships for integration in our vehicles in China” and that the company will integrate DeepSeek’s AI technology in its new vehicles in China.
📉 Tesla reported a miss on both the top and bottom lines in its Q1 2023 earnings report, with automotive revenue plunging 20% year-over-year. Earnings per share were $0.27 adjusted, versus the estimated $0.39, and total revenue was $19.34 billion versus the estimated $21.11 billion. Tesla’s net income plummeted 71% to $409 million, or $0.12 per share, down from $1.39 billion or $0.41 per share a year earlier.
🤖 Despite the challenges, Tesla remains on track for a “pilot launch” of its driverless ride-hailing offering in Austin, Texas in June, and to begin building its humanoid robots this year. Tesla’s energy generation and storage revenue jumped 67% in the quarter, but the company warned that increasing tariffs may cause market volatility and near-term impacts to its energy business.
📅 However, Tesla CEO Elon Musk said his time spent running President Donald Trump’s “Department of Government Efficiency” will drop “significantly” starting in May. This could be interpreted as good news for shareholders, offsetting the negative results report with the hope of future improvement.
🌍 Geopolitics:
🗳️ Emmanuel Macron is thinking of having another early parliamentary election following last year’s catastrophic ballot that sent politics into a tailspin. With the geopolitical turmoil that followed Donald Trump’s return to the White House, he is hoping to take advantage of his global attention. Only consultation conversations have been place, and no decision has been reached about an early vote. One possibility is to schedule the ballot for next year’s local elections.
💣 Poland is missing important production objectives for gunpowder and ammunition, as evidenced by a string of major project delays and cost overruns. The European Union’s greatest spender in terms of GDP is demonstrating how difficult it is to increase its domestic defence industry while it rushes to do so.
📊 Market View:
📈 We are starting the session with strong optimism on global stock markets. Mini S&P 500 futures are up, currently standing at 5,400 points. Nasdaq 100 futures are following suit, exceeding 18,740 points.
📊 The European market also appears to be opening strongly. DAX 40 futures opened with a bullish gap, above the highs reached two weeks ago after Trump’s announcement of a 90-day delay in tariffs. The DAX is approaching 21,950 points. In the case of the Euro Stoxx 50, optimism is more subdued, but it is approaching the 5,000-point barrier.
💵 The dollar index regained strength, surpassing 99.50 points for a few hours, but has since fallen back to 99.20. The movement was fuelled by optimism following Trump’s statements and his intention not to dismiss Powell. The EUR/USD pair has retreated from Monday’s highs, falling from 1.1550 to the current 1.1380.
💱 The weakness of the dollar is leaving pairs such as USD/CHF in the 0.8225 area. In the past, these price areas have led to sharp and sudden interventions by the Swiss National Bank to correct the price, so we will have to remain vigilant.
📉 Market optimism seems to have calmed gold futures, which have retreated towards $3,300 an ounce from the $3,500 reached recently.
🛢️ The crude oil market has continued to advance, with Brent crude now trading at $68.40 a barrel. This area is an important reference point for the price of crude oil and a possible pivot point.
💰 Bitcoin has experienced a sharp rise in recent hours, breaking through the $92,000 barrier to reach almost $93,700. This movement is being fuelled by optimism in the international economic scenario, as well as a new record inflow of money into Bitcoin ETFs recorded on Monday.
