📰 Market Report.
🕊️ Pope Francis has passed away. During his papacy, he caused a sensation as a reformer who often shook up the more conservative sectors of the Church, but found popularity among the progressive sectors that were most critical of the Catholic Church.
🤝 US Vice President JD Vance posted the following on X: “I just learned of the passing of Pope Francis. My heart goes out to the millions of Christians all over the world who loved him. I was happy to see him yesterday, though he was obviously very ill.”
🌍 This week, as the Trump administration undertakes a flurry of talks with its trade partners, finance ministers from all over the world will gather in Washington, DC, for the spring meetings of the World Bank and the International Monetary Fund.
⚠️ The possible worldwide risk will be highlighted by the IMF today in its worldwide Financial Stability Report.
📉 The dollar has tanked, hitting a 10-year low against the Swiss franc and a 3-year low against a basket of G10 currencies, as investors see Trump’s comments as a threat to the Fed’s independence.
🏦 Trump stated that if he were to ask, Powell would be removed from his position as the Chair of the Federal Reserve. US Treasury Secretary Bessent has reportedly warned White House officials against attempting to fire Powell, as reported by Politico. Trump has criticized Powell for always being “too late and wrong.”
💥 Firing Fed Chair Powell would be catastrophic for the dollar, potentially triggering a speculative attack that would be extremely challenging for policymakers to fend off. The online prediction market Polymarket currently sees a 19% chance of Powell being fired by the end of this year, up from around 15% earlier. Gold has surged 15% since hitting a post-“Liberation Day” low on April 7, rising above $3,400 per ounce as investors seek refuge.
💡 The notion of, instance, substituting zero coupon perpetual bonds for Treasuries may not sound so absurd if Trump were to think about removing Powell and installing a loyalist in his place.
🛡️ Republican Senator John Kennedy, a member of the Senate committee that oversees the Federal Reserve, defended the Fed’s independence and Powell’s commitment to fighting inflation, saying Powell “is going to do what he thinks is right” and will not allow inflation to spiral out of control.
📊 Austan Goolsbee, president of the Chicago Fed, warned that in countries where central bank independence has been challenged, the result has been higher inflation, slower growth, and a worse job market. “I strongly hope that we do not move ourselves into an environment where monetary independence is questioned.” He said.
🚗 Today we will also have Tesla’s earnings report. Wall Street is pinning its hopes on a cheaper Tesla model, promised by the end of the first half of 2023, to revive the company’s slumping sales amid competition. Reuters reported that Tesla’s plans for an affordable model include a stripped-down version of the Model Y SUV, but its production has been delayed by months, which could disappoint investors.
🤖 Musk’s pivot to robotaxis and AI last year has raised concerns about safety and litigation risks, especially as Tesla has faced delays in delivering on its self-driving promises. Tesla’s stock has slumped 40% so far this year, wiping out over $500 billion in market value, as Musk’s political involvement has damaged the brand and led to protests and vandalism at Tesla showrooms. Despite the steep drop in Q1 deliveries, Tesla’s revenue is expected to be flat year-over-year due to increased sales of automotive regulatory credits and energy products.
🛢️ Oil prices fell more than 2% on Monday, with Brent crude futures down $1.70 to $66.26 per barrel and WTI crude down $1.60 to $63.08 per barrel. The decline was driven by signs of progress in the talks between the U.S. and Iran, which could potentially lead to Iranian crude returning to the market. Concerns about economic headwinds from tariffs and President Trump’s renewed criticism of the Federal Reserve also weighed on oil prices, as they raised fears about potential demand destruction.
☮️ U.S. President Donald Trump reportedly expects to “make a determination for a full and comprehensive ceasefire” between Ukraine and Russia as early as this week. According to the New York Post, Ukrainian Defense Minister Rustem Umerov told U.S. officials that Kyiv is “90%” on board with Washington’s peace framework, but has remaining concerns over territories under Russian control. The U.S. is reportedly considering offering Russia sanctions relief and the unfreezing of seized Russian assets as part of the peace deal.
🕊️ Russian President Vladimir Putin has proposed bilateral talks with Ukraine for the first time since the early days of the war. Ukraine will participate in talks with the U.S. and European countries in London this week. Zelensky said the London talks should focus on pushing for an “unconditional ceasefire” as a starting point.
💬 The U.S. President and Secretary of State have warned that Washington could abandon the peace talks without progress within days, but Trump struck a more optimistic note, saying a deal could be made “this week.”
📉 Market Review:
📉 Markets open after Easter with declines. Speculation about the future of Jerome Powell, chairman of the Federal Reserve, has generated even more volatility. S&P 500 futures, which had attempted to recover ground last week, fell again, losing 5,200 points in the last few hours, although they subsequently recovered, currently trading at 5,205 points. Similar movements are seen in Nasdaq 100 futures, which fell in recent hours to around 17,715 points, before rebounding to their current level of 17,990 points.
📈 In Europe, DAX 40 futures have shown resilience, remaining above 21,200 points and reaching 21,215 points at the moment. Eurostoxx 50 futures are following the DAX trend and currently stand at 4,835 points. If Europe manages to hold its ground, the opening of the US market may bring some recovery.
💵 The dollar index continues to lose ground, falling to 98 points. This depreciation has caused an expansion in the EUR/USD pair, which rose to 1.1550 before retreating to its current level of 1.1535.
🛢️ The price of crude oil has declined, with Brent falling to $65.65 per barrel, from where it has rebounded to exceed $66.50 in recent hours. Progress in talks with Iran is stimulating supply, while rising global trade tensions, driven by Trump’s policies, are depressing demand.
🏅 In this context, gold continues to rise like a rocket, currently reaching a price of $3,500 per ounce on the futures markets, driven by the weakness of the dollar.
💻 Finally, Bitcoin also experienced a sharp rise yesterday, rising from £84,300 to almost £88,800, currently standing at £88,225. However, we would like to remind you that we only consider Bitcoin interesting if it manages to break through the £92,000 barrier again and remain above that level.
