📰 Market Report.
📈 Monday’s market surge was fuelled by Trump’s suggestion that nations would receive a “break” from reciprocal tariffs. However, given the erratic implementation and dramatic fluctuations in the sorts of Trump tariffs, it is unlikely to be a persistent increasing trend.
🚗 President Trump said automobile tariffs are coming soon, but indicated that not all of the threatened tariffs will be imposed on April 2 as previously indicated. He said he may give “a lot of countries” breaks on the tariffs and could delay sector-specific tariffs on autos, pharmaceuticals, and semiconductor chips. The announcement of a potential delay and flexibility on the tariffs was seen as a positive sign by Wall Street, with stocks rising on the news.
🛢️ Trump also announced that the U.S. will impose a 25% tariff on any country that buys oil or gas from Venezuela, effective April 2. This is seen as an attempt to increase pressure on the Maduro regime in Venezuela and China, which is a major buyer of Venezuelan crude. The tariffs are expected to drive up oil prices, as Venezuela exported about 660,000 barrels per day in 2024, with China being the largest destination.
⛽ Trump also extended Chevron’s license to produce oil in Venezuela until May 27, after the company’s CEO lobbied the administration. This is seen as an effort to ensure oil flows to the U.S. and limit China’s influence in Venezuela’s oil industry.
🤔 Is Trump’s strategy working? Following TSMC’s announcement to invest and produce in the US, Hyundai has now joined the club.
💵 South Korean conglomerate Hyundai announced a $21 billion investment in the U.S., including a $5.8 billion steel plant in Louisiana that will hire over 1,400 employees. Hyundai’s CEO said the best way for the company to navigate tariffs is to increase localization, which this investment appears aimed at achieving. Hyundai is a top seller of electric vehicles in the U.S., competing directly with Tesla, and already has two major automotive plants in the country. The investment also comes as the U.S. has a trade deficit with South Korea, which Trump has criticized for applying higher tariffs on U.S. exports than the U.S. applies to South Korean imports.
🇩🇪 Business activity in Germany’s private sector rose at the quickest rate for ten months in March, according to the HCOB German flash composite Purchasing Managers’ Index. The manufacturing index improved to 48.3 from 46.5, beating expectations, as manufacturers ramped up production for the first time in nearly two years, thanks in part to a new fiscal package approved by Germany last week aimed at reviving growth and scaling up the military.
🤖 Bank of England Governor Andrew Bailey said that artificial intelligence (AI) has the potential to be a “game-changer” for Britain and the global economy, similar to how electricity transformed the economy at the start of the 20th century. Bailey emphasized the need to facilitate the growth of AI as a “general purpose technology” that can help move the needle on economic growth, while also investing in human skills to take advantage of AI.
📉 British finance minister Rachel Reeves is expected to publish a forecast from the Office for Budget Responsibility on Wednesday that will roughly halve the UK’s expected economic growth in 2025 from 2% to about 1%. Reeves will also reveal in her spring statement that the £9.9 billion fiscal buffer she had planned for has been wiped out, leaving her with only about £4 billion in deficit.
🇹🇷 Turkish crisis: Turkey’s capital markets regulator has banned short-selling across all stocks and relaxed share buyback rules in an effort to prevent further equity losses after the country’s benchmark index tumbled last week. These moves come in response to the arrest of Istanbul Mayor Ekrem Imamoglu, a rival to President Recep Tayyip Erdogan, which sparked a market rout, sending the Turkish lira to an all-time low and driving bond yields higher. The Turkish lira continued to weaken in Asian trading, and there is a good chance the downward pressure will continue for the time being. The central bank also held a technical meeting with commercial lenders and announced a liquidity bill auction to absorb excess lira.
🚗 Tesla’s market share in Europe continued to shrink year-on-year in February, as the company’s sales dropped for a second consecutive month despite rising overall EV registrations on the continent. Tesla sold fewer than 17,000 cars in the European Union, UK, and European Free Trade Association countries in February, compared to over 28,000 in the same month in 2024. Volkswagen and Renault saw sales rise, while Stellantis’ sales fell. SAIC Motor’s sales rose despite EU tariffs on Chinese-made EVs, while Geely-owned Volvo’s sales were down.
🌍 Geopolitics:
🤝 Negotiators from the United States and Russia have started talks in Riyadh, Saudi Arabia, aimed at making progress towards a broad ceasefire in Ukraine. The US-Ukraine talks that preceded this concluded with the two sides discussing the protection of critical and energy infrastructure from attacks, though the specific parameters are still uncertain. The involvement of Ukraine’s European allies in the peace process remains unclear, as the US has not fully incorporated their concerns and proposals, such as a “coalition of the willing” to devise peace terms.
💶 According to the French geopolitical analyst Alfredo Jalife-Rahme, German Chancellor-to-be Friedrich Merz, a former BlackRock executive, has obtained a massive €1 trillion budget for a “war economy” against Russia, with the support of the Green party. This is contrasted with Trump and Putin’s efforts to implement the new global order. He also suggests the real focus of the Trump-Putin negotiations is on the Middle East, particularly around resolving conflicts involving Iran, Israel, Turkey, Pakistan, and Yemen. Jalife-Rahme hypothesizes that after pacifying the Ukraine conflict, Trump will shift his attention to brokering peace around Iran, which is seen as the key to stability in the broader Middle East.
📊 Market View:
📈 Mini S&P 500 futures rose strongly yesterday, reaching 5,800 points. They are currently trading at 5,815. On the other hand, Mini Nasdaq futures have also recorded significant gains, exceeding 20,000 points and now trading at 20,370.
💵 The dollar has shown strength and has managed to overcome the resistance of 104 in its DXY index. As a result, the euro/dollar pair has fallen below 1.08 and could face a bearish pattern that could take it towards the 1.07 area in the coming sessions.
🧭 In Europe, DAX 40 futures remain strong and continue to trade close to their all-time highs, currently at 23,130 points.
🛢️ As for the crude oil market, prices continue to rise, possibly driven by Donald Trump’s announced sanctions against Venezuelan oil. Brent crude has risen above $73 and is currently trading at $73.15.
🥇 On the other hand, gold futures have shown slight weakness and are currently trading at $3,020 per ounce. If this weakening trend persists, bearish patterns could appear in the coming sessions.
💰 Finally, Bitcoin advanced during yesterday’s session, approaching $89,000, although it has fallen back in the last few hours to $86,550. Even so, it is beginning to form an upward trend in the last two weeks, marked by increasing highs.
