EUROPEAN EQUITIES UPDATE: European indices hit after China raises tariffs on US goods to 125%

STOXX 600: -0.5%

• European bourses opened entirely in the green, attempting to build on the prior day’s gains. However, indices rapidly turned negative after China announced additional tariffs on US goods, taking the total to 125% from 84%; these will come into effect on April 12th.


• Alongside the announcement, the Chinese Finance Ministry said “if the US continues to impose additional tariffs on Chinese goods exported to the US, China will ignore it”, adding that “given that there is no longer any possibility of market acceptance for US goods exported to China under the current tariff levels” – nonetheless, it highlighted that it will “resolutely take countermeasures”.


• Some interpretations of this language include; a) China raising the bar for further retaliation, b) tariffs have gone so high that further levies serve little purpose, c) retaliatory tariffs have ended, but measures (like export controls) could continue. Ultimately, markets will be awaiting clarity on and response to these remarks.


• Trade aside, the EZ-docket has been light; German/Spanish CPI metrics were unrevised. Ahead, markets will await commentary from ECB’s Lagarde and Cipollone; Moody’s Credit Rating on France also due.

Sectors: Negative

• European sectors opened almost entirely in the green, but the picture quickly turned negative after the aforementioned Chinese tariff announcement.
  
  
  • There is now a clear defensive bias in Europe; Utilities leads, alongside Healthcare.
  
  
  • The typical cyclical sectors find themselves towards the foot of the pile; Travel & Leisure, Autos and Basic Resources are all lower.
  
  
  
  

Majors: FTSE 100 -0.4%, DAX 40 -1.7%, CAC 40 -1%

• The FTSE 100 is on the backfoot with losses to a similar magnitude as peers. Fresnillo (+5.5%) tops the pile, alongside the broader strength in metals prices – for Fresnillo specifically, it received an upgrade at Peel Hunt. To the downside, BP (-2.6%) extends losses after it forecasts a decline in upstream production in Q1’25. On the data front, UK GDP was stronger than expected - but ultimately the importance of this data has been diminished by the recent Trump tariff developments.


• As for stock specifics; Logitech (-1.8%) is lower after it reiterated FY25 revenue guidance but withdrew its FY26 outlook due to tariff-related uncertainty.

US Equity Futures: ES -0.7%, NQ -0.8%, RTY -0.8%

• Futures are lower across, with sentiment hit after, China, once again, announced retaliatory tariffs on the US – taking the total tariffs on US goods to 125%.


• US PPI data for March is expected to see the headline rise to 3.3% Y/Y from 3.2%; the core measure is seen rising to 3.6% Y/Y from 3.4%. The data will be used in conjunction with the CPI data out on Thursday (which surprised to the downside) to estimate PCE Prices. The University of Michigan’s prelim April sentiment survey is expected to show the headline declining to 54.5 from 57.0 in March. Today’s corporate earnings slate includes: BLK, BK, FAST, JPM, WFC, MS.

11 Apr 2025 - 10:05- EquitiesData- Source: Newsquawk