🌐 Market Report.
🇺🇸 U.S. President Donald Trump said sectoral tariffs on pharmaceuticals and semiconductor chips will begin at “25% or higher, and it will go very substantially higher over the course of a year.” He intends to impose similar duties on vehicles as early as April 2, rising substantially over the course of a year, to incentivize companies to set up U.S. factories.
🚗 Trump claims the European Union collects a 10% duty on vehicle imports, four times the U.S. passenger car tariff rate of 2.5%, and he wants to press the EU to increase U.S. imports of cars and other products. An auto import tariff of 25% would be a significant change for the global auto industry.
🤝 The European Union has not made any specific offer yet to reduce tariffs on imported U.S. cars, stating that any tariff reductions must be mutually beneficial and negotiated within a fair, rules-based framework. Trump had claimed the EU had already lowered its tariffs on cars, but the EU has denied this and pointed out that the U.S. imposes a 25% tariff on pickup trucks, which is the largest segment of the U.S. auto market.
💡 As part of a proposal to deepen bilateral cooperation, the EU has said it is ready to import more liquefied natural gas and possibly purchase more weapons from the U.S.
🪖 This is where the war in Ukraine and the increase in EU money for NATO make sense. As Senator Lindsey Graham said, the money for the war in Ukraine will return in contracts to US corporations.
📈 Market View:
📊 The futures contracts for the US stock markets remain strong but cautious. S&P 500 futures are trading at 6,144 points, reaching historic highs, although without advancing much beyond this level. The Nasdaq 100 futures present a similar situation, finally reaching 22,300 points, but falling back to 22,155 points, which seems to indicate a lateral range over the last two days.
💵 The dollar showed strength during yesterday’s session, exceeding 107.30 points in its DXY index. On the other hand, the EUR/USD continues to fail to take advantage of the temporary weakness of the dollar, staying just short of exceeding 1.05 and currently falling back below 1.0425.
🇪🇺 In Europe, the DAX suffered a sharp correction after Trump’s threats to impose tariffs, this time targeting specific sectors of the global economy, such as the automotive sector, a key part of the German economy. Finally, the selective index responds to these real threats. DAX 40 futures stand at 22,530 points.
🛢️ Crude oil is experiencing notable volatility due to the developments mentioned in the news section. Yesterday, a barrel of Brent exceeded $76.50, and although it fell back hours later, it remains in the $76 zone.
🏅 Gold is advancing strongly and seems on track to reach $3,000 soon. At the moment, futures contracts are at $2,965.
💻 Bitcoin is still in dangerous territory. On Tuesday it fell to $93,340 and, although it has shown some recovery, it is still trapped in a range. If it loses the $92,000 level, a severe correction cannot be ruled out.
🌍 Geopolitics:
⚠️ U.S. President Donald Trump has denounced Ukrainian President Volodymyr Zelenskyy as a “dictator” and warned him to “move fast” to secure peace or risk losing his country. Zelenskyy has rejected a U.S. proposal that would have seen Washington receiving 50% of Ukraine’s critical minerals, saying “I can’t sell our country.” But in all honesty, it was Zelensky who first offered to sell Ukrainian mining resources to the US if they continued to support the war.
🗳️ The upcoming German election on Sunday could result in a conservative-led coalition government that faces pressure to revive the stagnant economy and make much-needed reforms. While a radical overhaul of the debt brake is considered unlikely, a modest loosening to allow more investment spending is expected, which could provide a boost to the euro and German bond yields.
💥 Increased defense spending is likely, as the CDU/CSU and potential coalition partners favor meeting or exceeding NATO’s 2% GDP target, which has already lifted shares of German defense companies like Rheinmetall.
🛢️ Oil prices held near a one-week high on Wednesday, with Brent futures rising to $76.04 per barrel and WTI crude reaching $72.25 per barrel. The market is trying to assess the impact of announced and actual sanctions on Russia, as well as potential supply disruptions from drone attacks on Russian oil infrastructure and cold weather affecting U.S. production. There is speculation that OPEC and its allies may delay their planned supply increase in April, which could further tighten the market.
📉 Analysts at Goldman Sachs believe Russian crude oil production is more constrained by its OPEC+ target than current sanctions, and any easing of sanctions is unlikely to significantly increase oil flows.
