Market Quick Take – 16 April 2025

Market drivers and catalysts

• Equities: Mixed US markets; Nvidia plunges; Europe gains on tariff pause hopes; Asia pressured by US-China tensions
• Volatility: VIX slightly down, futures indicate elevated anxiety amid Nvidia impact
• Digital Assets: Slight declines on tariff uncertainty; China crypto strategy adds uncertainty
• Currencies: USD tanks overnight on Trump administration moves to restrict chip exports to China
• Fixed Income: US treasury yields dip at front-end of curve overnight on risk aversion
• Commodities: Gold hovers near $3300, a +25% YTD gain
• Macro events: US Retail Sales, Industrial Production & Bank of Canada Rate Decision

Macro data and headlines

• U.S. reviews pharmaceutical and semiconductor imports before Trump's tariff announcements. Reports indicate China halted Boeing jet deliveries amid the trade war. The White House press secretary said the U.S. is open to a deal, but it's up to China to reach out first. Canada granted temporary six-month relief from counter-tariffs on U.S. goods used in manufacturing, processing, and food packaging.
• China's economy grew 5.4% y/y in Q1, beating estimates following a sharp uptick in March. The Chinese government is considering stimulus measures to offset the tariff shock, including cutting interest rates, increasing fiscal borrowing, and boosting domestic consumption and investment.
• UK March CPI out this morning at +0.3% MoM and 2.6% at the headline versus +0.4% / 2.7% expected, respectively, and 2.8% YoY in Feb. The core CPI rose 3.4% YoY as expected, down from 3.5% in Feb. The CPI Services figure for the month was 4.7% YoY vs. 4.8% expected and 5.0% in Feb.
• Canada's annual inflation rate unexpectedly slowed to 2.3% in March from February's 2.6%, potentially giving the Bank of Canada room to pause its easing campaign or even cut interest rates for an eighth straight time today to strengthen the economy amid tepid growth and weak consumer spending.
• U.S. import prices decreased by 0.1%, contrary to expectations, following a revised 0.2% rise in February. This was the first drop since September 2024, driven by a 2.3% fall in fuel prices. Nonfuel import prices increased by 0.1%, with gains in capital goods, industrial supplies, and foods offsetting declines in consumer goods and vehicles.

Macro calendar highlights (times in GMT)

Italy PMI Meloni to meet US President Trump today
0900 – Eurozone March CPI (Final)
1230 – US March Retail Sales
1315 – US March Industrial Production
1345 – Bank of Canada Rate Decision
1400 – US Apr. NAHB Housing Market Index
1430 – EIA's Weekly Crude and Fuel Stock Report
1700 – US Treasury to auction 20-year notes
1730 – US Fed Chair Powell to speak to Economic Club of Chicago
2245 – New Zealand Q1 CPI
0130 – Australia Mar. Employment Data

Earnings events

• Today: ASML, Abbot Laboratories, Progressive Corporation
• Thursday: TSMC, UnitedHealth, Netflix, American Express, Blackstone, Charles Schwab, Marsh & McLennan, ABB

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• US: US stocks ended mixed Tuesday as corporate earnings and tariff tensions persisted. The S&P 500 (-0.17%) and Dow Jones (-0.38%) halted their recent rally, while Nasdaq gained marginally (+0.18%). Financials provided support with Bank of America (+3.6%) and Citigroup (+1.7%) reporting robust earnings. Nvidia plunged 5.7% after-hours due to a significant $5.5B writedown from blocked H20 chip exports to China, intensifying US-China tensions. Futures are sharply lower on Nvidia concerns, with Nasdaq futures down 2.1%. Upcoming earnings (Abbott, Travelers) and retail sales data could further impact markets today.
• Europe: European equities surged Tuesday amid hopes of a temporary US pause on auto tariffs. The STOXX 50 rose 1.2%, with notable gains in auto stocks like Stellantis (+6.5%), Volkswagen, and BMW (+3%). Financials also rose with Santander and UniCredit up over 3%. However, LVMH dropped 7% after disappointing earnings. Wednesday looks challenging as futures indicate lower openings due to tariff uncertainties, Nvidia’s export restrictions, and weak ASML order data raising concerns in the semiconductor sector.
• UK: FTSE 100 climbed 1.41% Tuesday, driven by strong performances from financial and retail stocks such as 3i (+6.03%) and B&M European Value (+5.75%). However, Wednesday opens lower, with futures down amid caution over evolving US tariffs. UK inflation data is key today, anticipated to influence Bank of England policy expectations.
• Asia: Asian stocks retreated Wednesday amid heightened US-China trade uncertainty and Nvidia's export restrictions hitting the tech sector. Hong Kong's Hang Seng dropped 2.17%, led by declines in Tencent (-2.4%) and Alibaba (-1.5%). China reported stronger-than-expected Q1 GDP growth (5.4%), yet equities fell due to intensifying tariff risks overshadowing economic resilience. Nikkei and KOSPI also declined around 0.7%, reflecting broader regional risk aversion.

Volatility

Volatility indicators were mixed; VIX decreased slightly to 30.12 (-2.49%), reflecting temporary market calm. However, futures signal rising anxiety amid Nvidia's export block impacting Nasdaq futures (-2.1%) and S&P futures (-1.3%). VIX futures rose notably (+6.02%), highlighting continued investor caution ahead of key retail sales data and Fed Chair Powell's address today.

Digital Assets

Cryptocurrencies retreated slightly Wednesday, tracking broader risk-off sentiment amid US-China tariff uncertainty. Bitcoin traded slightly down at $83,464 (-0.21%), Ethereum at $1,573 (-0.39%), and XRP at $2.07 (-0.91%). Crypto stocks mirrored sentiment; Marathon Digital and Riot Platforms fell around 3%. Concerns also arose from China’s strategy regarding large seized crypto holdings amid regulatory uncertainty.

Fixed Income

• US treasury yields dropped further yesterday, with the US 10-year benchmark trading this morning near 4.32%, some five basis points lower than Monday’s closing level and just above yesterday’s low of 4.30%. The front end of the yield curve moved more sharply overnight on the US moved against semiconductor sales to China, with the 2-year yield some 4.5 basis points lower and trading near 3.80% late in today’s Asian session.
• German 2-year yields fell slightly yesterday and trade near 1.77% ahead of tomorrow’s ECB meeting, where guidance will be closely watched, given that expectations are nearly universal for a 25-basis point rate cut, but with 50-50 odds of a cut in June.
• In High Yield US corporate credit, the Bloomberg High Yield Average OAS yield spread to US treasuries dropped a few points yesterday to close at 405 basis points, an eight-session low.

Commodities

• Gold rose to a fresh record high near $3300, up 25% year-to-date, as Trump’s trade war show no signs of easing after the President ordered a probe into critical minerals, semiconductors and pharmaceuticals, sparking a fresh move towards safe havens and out of stocks. Recent price upgrades from major banks have given investors the confidence to continue to buy.
• Crude prices trade lower with risk sentiment suffering a fresh setback as the trade war between the world’s two biggest economies raises concern about demand and the prospect of a supply glut. The IEA cut its 2025 forecasts for oil demand by 30% to 700kb/d due to the brewing trade war hurting demand in China and the USA.

Currencies

• The US dollar fells sharply overnight on the new Trump administration moves to limit chip exports to China, with the Swiss franc leading the charge higher versus the greenback and euro and yen not far behind. USDCHF pushed back below 0.8150, not far from the 0.8100 low for the cycle from last Friday (also a post 2015 low). USDJPY is also threatening the lows since last September, the Friday low just above 142.00, with the round 140.00 level an obvious focus on the chart. As it was twice tested since late 2023.
• USDCNH is not generating headlines, stuck as it is in the range below the key 7.375 level, but its stability despite a very weak US dollar shows broad CNH weakness, especially against the safe haven currencies of late CHF, EUR and JPY.EURCNH is threatening the highest levels since a 2015 devaluation move of the renminbi, the 2020 level of 8.328, which briefly broke on Friday. This morning, EURCNH trades above its highest daily close since 2014, at 8.338 (intraday high Friday was 8.387)..

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