📰 Market Report.
🎉 This Wednesday will be ‘America’s Liberation Day’, and, apart from the fact that it will be the day on which a large number of US tariffs on the rest of the world come into force, we have no idea what else Trump meant by naming it this. Any surprises in reserve?
📈 Also, this week, as on every first Friday, we will have data on the US labour market. The most volatile market data, which will give us a clue as to the state of the world’s largest economy and the next steps the Fed might take.
🚗 President Trump said he “couldn’t care less” if automakers raise car prices in response to the planned 25% tariffs on imported vehicles. The planned tariffs will impact a $240 billion trade route, with imported cars and light trucks accounting for about half of the 16 million vehicles sold in the US last year. Tariffs will also expand to key auto parts like engines, transmissions, and electrical systems, with the potential to broaden further. Trump stated that he hopes automakers raise prices, as it will lead people to buy more American-made cars instead. Trump continued focus on trade policies that prioritize domestic industries, even if they result in higher costs for American consumers.
🇨🇳 China’s manufacturing activity expanded at the fastest pace in a year in March, with new orders boosting production and providing some reprieve as the country deals with an intensifying trade war with the US. The official purchasing managers’ index (PMI) rose to 50.5 in March, the highest reading since March 2024 and matching analysts’ forecasts. However, the relief is expected to be short-lived, as U.S. President Donald Trump is set to announce new “reciprocal” tariffs on Wednesday, potentially adding more levies on Chinese goods. China has kept its economic growth target for this year unchanged at “around 5%” despite the trade war threats, and has pledged more fiscal stimulus and monetary easing to cushion the impact. However, the risk of deflationary pressures and rising unemployment in China’s economy persist.
💰 China’s finance ministry will inject $69 billion into four of the nation’s largest state-owned banks through their share placements. The banks – Bank of Communications, Bank of China, Postal Savings Bank of China, and China Construction Bank – plan to raise up to 520 billion yuan ($72 billion) through additional stock offerings.
🏦 This capital injection follows China’s earlier pledge to issue 500 billion yuan in special sovereign bonds to boost the capital of the country’s biggest state-owned banks. The move is aimed at strengthening the banks’ ability to support the real economy, maintain high asset growth, and cope with declining profit margins amid rate cuts. China is bolstering its banking system even though the top lenders already exceed capital requirements, as they battle record-low margins, slowing profit growth, and rising bad debt.
🇯🇵 Japan: Retail sales growth slowed to 1.4% year-on-year, falling short of the expected 2% and significantly below January’s revised 4.4%. This represents the weakest growth since October, though rising wages continue to bolster consumer spending. Industrial production rebounded, rising 2.5% month-over-month and exceeding market forecasts of a 2.3% increase. This marks the highest reading since March 2024, following three consecutive months of decline. The Nikkei 225 Index tumbled nearly 4% on Monday, falling below 36,000 to its lowest level in six months, as investors digested the mixed economic data. The Japanese yen strengthened past 149 per dollar on Monday, marking its second consecutive session of gains.
🇬🇧 British business confidence held steady in March, matching February’s six-month high, adding to tentative signs of an uptick in the economy in early 2025, with the unexpected surge in retail sales volumes in February. The survey, along with stronger-than-expected PMI data, suggests the British economy saw a slight pickup in growth after a tepid end to 2024, though challenges remain.
🇩🇪 Berlin’s economy has been outpacing the sluggish overall performance of Germany’s economy, with its GDP growth and per capita economic output now exceeding the national average. The city has become Germany’s startup capital, attracting young talent and companies like Zalando and N26, as well as benefiting from the Tesla gigafactory and the new Berlin airport. However, rising costs, including rents, food and drink prices, and entry fees for iconic clubs, are squeezing the budgets of both long-time residents.
🤖 Elon Musk’s artificial intelligence startup xAI has acquired the X platform (formerly Twitter) in an all-stock transaction valued at $33 billion. The combined entity, called XAI Holdings, has a total valuation of over $100 billion, not including $12 billion in debt. Musk believes the combination will “unlock immense potential” by blending xAI’s AI capabilities with X’s massive reach and user data. The deal gives xAI exclusive access to X’s proprietary data, which could provide a unique advantage over competitors like OpenAI.
🌍 Geopolitics:
🛢️ Donald Trump stated that if a ceasefire with Kyiv cannot be established, he might think about imposing “secondary tariffs” on Russian oil, which would be extra charges for nations that purchase Russian barrels. The US president also told NBC that he is “pissed off” with Vladimir Putin after the Russian leader offered ideas on how to remove Volodymyr Zelenskiy, the president of Ukraine, and replace him.
🇺🇸 The U.S. Agency for International Development (USAID) will be officially dissolved, with its functions and ongoing programs being absorbed by the State Department. This move is being described as a “genius” decision by the Trump administration to sidestep court orders attempting to force the reinstatement of USAID. The administration claims this will “significantly enhance the efficiency, accountability, uniformity, and strategic impact of foreign assistance programs” by ensuring the U.S. speaks with “one voice in foreign affairs.” Some US politicians claimed that this agency functioned as a political organisation parallel to the US government itself, described by the agency itself as a global organisation, rather than national.
🇷🇺 The Russian Foreign Ministry has accused France and the UK of actively aiding Ukraine in a strike on the Sudzha gas pipeline infrastructure in Russia’s Kursk Region. According to the Russian Foreign Ministry spokeswoman Maria Zakharova, French satellites and British specialists were involved in providing targeting and navigation support for the Ukrainian missile strike. Zakharova stated that the “command came from London” and branded the attack as part of a Ukrainian “terror” campaign targeting Russian energy infrastructure. This strike occurred despite an agreement between Russia and the US to temporarily suspend attacks on Ukraine’s energy infrastructure.
🇮🇷 Iran has officially rejected direct negotiations with the United States in response to a letter from President Donald Trump calling for renewed nuclear negotiations. Iran stressed that while it is not against negotiations in principle, the U.S. must first rectify its past “misconduct” and rebuild trust before any talks can take place. Tehran has maintained its stance against direct negotiations under the current U.S. “maximum pressure” campaign and the threat of potential military action. In his letter to Iran’s Supreme Leader Ayatollah Ali Khamenei, Trump had said he hoped Iran would agree to talk, and warned that the “other alternative is we have to do something” if they don’t.
🌋 In regions affected by the earthquake, Myanmar’s insurgents announced a two-week truce as the death toll, which also included those in Thailand, approached 1,700. Nearly 300 people are missing and about 3,400 are injured following Friday’s 7.7-magnitude earthquake. A secondary 7-magnitude earthquake that occurred early today in Tonga momentarily triggered a tsunami warning.
📉 Market View:
📉 The sell-off that began on Friday in the financial markets continues. We start the week with US futures trading down, registering a sharp fall. Mini S&P 500 futures have lost 5,600 points and are currently hovering around 5,585 points. Nasdaq futures, which last week fell below 20,000 points, have plummeted and are currently at 19,215 points.
🇪🇺 Europe, which until now seemed immune to the global market situation, has also begun to feel the impact. DAX 40 futures are down to 22,500 points, while EuroStoxx 50 futures are approaching 5,200 points. It is interesting to note that the EuroStoxx 50 shows much more bearish structures than the DAX 40 on the charts, so we expect its fall to be more dramatic.
💵 The dollar index (DXY), which climbed to 104.50 points last week, opened this week with setbacks and is now below 104 points, standing at 103.90. This has allowed the EUR/USD pair to recover levels above 1.08, currently trading at 1.0827. Last week, this pair had activated a bearish figure that pointed to a descent towards 1.07, but it seems to have escaped that fate.
🛢️ Crude oil, which started last week with a strong performance but closed with falls, seems to be clearly delineating a medium-term bullish channel. Its decline is finding support in the $72.75 area, and it would not be ruled out that it registers new increases, which would be in line with the increase in tensions between Iran and the United States, as well as the confrontations in Yemen.
🥇 Gold, in the face of the uncertainty brought about this week by the entry into force of sanctions and the increase in tensions in the Middle East, seems to be running wild. A few hours ago, gold futures exceeded $3,150 an ounce, setting another new all-time high.
₿ Finally, Bitcoin, which aborted the bullish figure it was bringing at the end of last week, has been deflating over the weekend and is currently trading below $82,000.
