NSEUR/USD fails to hold above 1.08 & European futures marginally lower into 'Liberation Day' - Newsquawk Europe Market Open
- USTR has reportedly prepared "an across-the-board tariff on a subset of nations that likely would not be as high as the 20% universal tariff option", according to WSJ.
- APAC stocks were mostly positive but with the major indices stuck within narrow parameters on 'Liberation Day'.
- European equity futures indicate a marginally lower cash market open with Euro Stoxx 50 futures down 0.3% after the cash market closed with gains of 1.4% on Tuesday.
- USD mixed vs. peers, antipodeans lead, JPY lags, EUR/USD failed to hold above 1.08.
- US President Trump believes Russian President Putin is stalling and the administration is eyeing aggressive sanctions enforcement, according to Fox
- Looking ahead, highlights include US ADP & Factory Orders, US Tariff Implementation Date, EU Defence Ministers Meeting, NBP Base Rate, RBA's Bullock, ECB's Schnabel, Lane & Lagarde, Fed's Kugler & US President Trump, Supply from the UK & Germany.
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US TRADE
EQUITIES
- US stocks were choppy but ultimately finished with a positive bias in which the SPX and NDX gained and the DJIA and RUT closed flat after risk sentiment was boosted by CNBC's Megan Casella who reported that there are three main tariff options that President Trump is looking at with a blanket 20% tariff the less likely of the options compared with a tiered system of three different rates and a country-by-country approach on rates. As such, the hopes for less aggressive tariffs spurred risk appetite and helped stocks recover from the initial pressure seen from soft data releases including a dismal ISM Manufacturing report and the miss on JOLTS data.
- SPX +0.38% at 5,633, NDX +0.82% at 19,436, DJI -0.03% at 41,990, RUT +0.02% at 2,012.
- Click here for a detailed summary.
TARIFFS/TRADE
- USTR reportedly prepares a new tariff option for US President Trump which is "an across-the-board tariff on a subset of nations that likely would not be as high as the 20% universal tariff option", according to WSJ.
- US President Trump's tariff plans are "coming down to the wire" with his team reportedly still finalising the size and scope of the new levies, according to Bloomberg.
- US Treasury Secretary Bessent told lawmakers that Wednesday's tariffs are a 'cap', according to a CNBC reporter cited by Reuters.
- White House Press Secretary Leavitt said US President Trump was with the trade and tariff team, while she added that car tariffs go into effect on April 3rd and that Trump has made up his mind on tariffs. Leavitt also said reciprocal tariffs will take effect immediately after the announcement and that a few countries have called to discuss tariffs.
- Canadian PM Carney and Mexican President Sheinbaum held a phone call on trade and discussed the importance of building an investment and trading relationship between the two countries, while Carney highlighted a plan to fight "unjustified" trade actions in the call.
- Canada is to avoid counter-tariffs that risk Canadian jobs and price hikes and it won't impose retaliation tariffs on most US food and other basic necessities, according to the Globe and Mail citing two federal trade advisers.
- Thai Commerce Ministry said Thai semiconductors may face 25% US tariffs and noted that Thai tariffs are 11% higher than US tariffs, while it added Thailand may see an impact of USD 7bln-8bln from US reciprocal tariffs but announced it will increase imports of US goods and plans tariff cuts for US products.
NOTABLE HEADLINES
- Fed's Goolsbee (2025 voter) said hard data on the US economy is still pretty solid and if they can get past this period of uncertainty, the underlying strength of the economy is still there, according to a Fox News interview. Goolsbee said the fear is if tariffs on imports jump out of just imports and move into other costs, or people freak out and change behaviour, while he added the problem of tariffs is that they are a supply shock and noted that confidence is almost cratering.
- US President Trump commented they are making progress to end the fentanyl crisis and that Senate Republicans must vote to keep the fentanyl national emergency in place.
- US President Trump is planning an executive order that would ease rules that limit weapons exports which could be announced as soon as Tuesday or Wednesday, according to Reuters citing sources.
- Atlanta Fed GDPNow (Q1 25): -3.7% (Prev. -2.8% on March 28th).
- OpenAI's Altman said can expect new releases from OpenAI to be delayed.
APAC TRADE
EQUITIES
- APAC stocks were mostly positive but with the major indices stuck within narrow parameters as participants awaited US President Trump's 'Liberation Day' tariff announcement scheduled later today.
- ASX 200 eked modest gains as strength in the real estate, tech and consumer discretionary sectors just about atoned for the losses in mining, resources and materials, while Building Approvals data from Australia printed better-than-feared.
- Nikkei 225 traded indecisively and wiped out most of its early gains as Japanese exporters braced for incoming US tariffs.
- Hang Seng and Shanghai Comp were mixed amid tariff uncertainty with China among the countries anticipated to announce an immediate retaliation to Trump's incoming tariffs, while China also awaits details regarding the US review of the 'Phase One' deal.
- US equity futures (ES -0.1%, NQ -0.1%) took a breather after rebounding yesterday on some hopes for less aggressive tariffs.
- European equity futures indicate a marginally lower cash market open with Euro Stoxx 50 futures down 0.3% after the cash market closed with gains of 1.4% on Tuesday.
FX
- DXY traded little changed after the prior day's choppy performance owing to soft data releases and as participants continued to await 'Liberation Day' tariffs with President Trump reportedly looking at three main options which are blanket 20% tariffs, a tiered system of three different rates and country-by-country rates although an official noted blanket 20% tariffs was the less likely option, while Canada and Mexico fentanyl tariffs are reportedly expected to be lifted. Furthermore, a separate article noted that the USTR was preparing a new tariff option for Trump of "an across-the-board tariff on a subset of nations that likely would not be as high as the 20% universal tariff option".
- EUR/USD attempted to nurse some of its recent losses and retested the 1.0800 level to the upside but with the rebound limited as US tariffs loom and with the EU mulling potential responses to US President Trump's tariffs.
- GBP/USD lingered above the 1.2900 level with price action rangebound amid light pertinent catalysts for the UK.
- USD/JPY continued its gradual recovery from yesterday's trough and looked to retest the 150.00 level to the upside but with the gains capped amid the flimsy risk sentiment in Japan.
- Antipodeans extended on yesterday's upward momentum which was facilitated as risk sentiment improved stateside and with Australian buildings approval data showing a narrower-than-feared contraction.
- PBoC set USD/CNY mid-point at 7.1793 vs exp. 7.2663 (Prev. 7.1775).
FIXED INCOME
- 10yr UST futures continued its pullback from yesterday's peak with the reversal facilitated as risk appetite improved during Wall St trade, while all attention now turns to President Trump's decision on the level of reciprocal tariffs.
- Bund futures traded rangebound after recent whipsawing and with demand contained ahead of today's Bund issuance.
- 10yr JGB futures remained afloat amid the tentative mood in Japan as exporters braced for the incoming US tariffs.
COMMODITIES
- Crude futures were rangebound after the prior day's contained performance as participants awaited US President Trump's tariff announcement and with the latest private sector inventory data showing a relatively substantial surprise build in headline crude inventories.
- US Private Energy Inventory Data (bbls): Crude +6.0mln (exp. -2.1mln), Distillate -0.0mln (exp. -1.0mln), Gasoline -1.6mln (exp. -1.7mln), Cushing +2.2mln.
- OPEC cut oil output last month by 110k BPD to 27.43mln BPD amid curbs in Nigeria and Iraq, according to a Bloomberg survey.
- Spot gold rebounded from the prior day's trough amid uncertainty ahead of the looming US reciprocal tariffs.
- Copper futures edged mild gains but with the upside capped amid the mixed and cautious mood in Asia on 'Liberation Day'.
CRYPTO
- Bitcoin mildly pulled back overnight which saw prices revert to below the USD 85,000 level.
NOTABLE ASIA-PAC HEADLINES
- US President Trump will consider a final proposal for TikTok on Wednesday and his administration is finalising plans for potential investors that could include Blackstone (BX) and Oracle (ORCL), according to CBS News. It was separately reported that President Trump is expected to meet senior cabinet officials and the Vice President to discuss potential investors for TikTok.
- US Senate Committee reviewing Meta (META) alleged efforts to build censorship tools for China as part of an attempt to gain entry to Chinese markets, according to a letter seen by Reuters.
DATA RECAP
- Australian Building Approvals (Feb) -0.3% vs. Exp. -1.5% (Prev. 6.3%, Rev. 6.9%)
GEOPOLITICS
MIDDLE EAST
- Israel's army launched heavy raids on the city of Rafah in the southern Gaza Strip, according to Sky News Arabia.
- Israeli Defence Minister said they are expanding the operation in Gaza to seize large areas that would be added to the security zones of Israel and announced a large-scale evacuation of the Gaza population from fighting areas.
- US Defence Secretary Hegseth ordered additional air assets to strengthen their Middle East military posture.
- US conducted three new airstrikes on Saada in northern Yemen, according to Houthi-affiliated media cited by Al Jazeera.
RUSSIA-UKRAINE
- US President Trump believes Russian President Putin is stalling and the administration is eyeing aggressive sanctions enforcement including on the Russian ‘shadow fleet', according to a post on X by Fox News's Jacqui Heinrich. Furthermore, a source familiar with the discussions said President Trump is frustrated with Putin and believes Russia is “slow-rolling comprehensive ceasefire talks”.
- White House Press Secretary said that US President Trump is frustrated with leaders on both sides of the Ukraine war.
- Bipartisan group of 50 Senators introduced a new sanctions measure which includes 500% duties against countries that purchase Russian oil, gas and uranium if Moscow refuses to participate in the peace process in Ukraine.
- Ukrainian President Zelensky said Ukraine is ready for an unconditional ceasefire and has already demonstrated this, while he will meet on Friday with a small circle of countries ready to contribute to foreign troop contingent in Ukraine and he urged the US to boost sanctions on Russia.
OTHER
- China's military conducted exercises in the middle and southern areas of the Taiwan Strait with exercises codenamed 'Strait Thunder 2025A', according to Xinhua. Furthermore, China's Eastern Theatre Command said it carried out long-range live fire shooting drills in waters of East China which involved precision strikes on simulated targets of key ports and energy facilities which achieved the desired effects.
EU/UK
NOTABLE HEADLINES
- German banks' association said Germany's economy is expected to grow by 0.2% this year and 1.4% next year.
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