Newsquawk European Market Wrap - 14th April 2025

• Equities firmer after Friday's exemption announcement, despite Trump later posting that there was no exception announced.


• DXY currently at the top-end of a wide 99.207-100.16 band, CHF the clear laggard; EUR/USD above 1.14 & Cable touched 1.32 at best.


• Fixed initially diverged before all gradually grinding higher, crude choppy while XAU pulled back to USD 3.2k/oz

TRADE/TARIFFS

US

• 
  US President Trump’s administration exempted items from reciprocal tariffs including smartphones, storage devices and some other electronics. However, Trump posted on Sunday that there was no tariff exception announced on Friday and that these products are subject to the existing 20% fentanyl tariffs and are just moving to a different tariff bucket, while he stated that “NOBODY is getting “off the hook” for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!”.
  


• 
  US President Trump said he is to announce the tariff rate for semiconductors over the next week and that semiconductor tariffs will be in place in the not-distant future, while he added there will be some flexibility on some companies on semiconductor tariffs but it is not clear. Furthermore, Trump responded that they will be announced soon but there has to be some flexibility when asked about tariffs on Apple (AAPL) iPhones.
  


• 
  US President Trump said the bond market is going good and had a little moment but he solved that problem very quickly. Trump added that the 10% tariff is a floor or pretty close and that it doesn’t matter if the dollar went down as he thinks it will go up and will be stronger than ever.
  


• 
  US President Trump’s administration is reportedly prioritising trading partners that are strategic to China with the US in talks with Japan, South Korea, India and Vietnam, according to Politico.


• 
  White House spokesperson said US President Trump made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones and laptops, while President Trump is to issue a Section 232 study on semiconductors soon and said he will have more information on semiconductors on Monday. Furthermore, Trump said that autos, steel, pharmaceuticals, chips and other specific materials will be included in specific tariffs to ensure tariffs are applied fairly and effectively.
  


• 
  US Commerce Secretary Lutnick said President Trump plans a separate levy on exempted electronics amid a trade war with electronics products to be part of upcoming sectoral tariffs and that semiconductor and electronic tariffs will come in a month or so, while he added that pharmaceutical tariffs will be coming in the next month or two and that the US had “soft entrees” through intermediaries with China on tariffs.
  


• 
  USTR Greer said there are no plans yet for President Trump to speak with Chinese President Xi and stated electronic exemptions reflect a move from reciprocal tariffs to national security tariffs. Greer said they have to be much more deliberate about the semiconductor supply chain and he believes the US will have meaningful tariff deals with several countries in the next few weeks.
  


• 
  White House NEC Chair Hassett says the US is aiming at semiconductors that influence national security; US President Trump will make the decision on when and if to have talks with China; making enormous progress on tariff talks with EU, going to be good for America, particularly the auto workers. Rare earth limits being studied.

OTHER

• China said the US tariff exclusion is a small step for the US to correct its wrong practice and called for the US to completely cancel the levies.


• 
  UK government announced that prices were slashed on 89 foreign products ranging from pasta, fruit juices and spices to plastic and gardening supplies over the next two years, while it stated the UK global tariff will be temporarily suspended on 89 products saving UK businesses at least GBP 17mln a year.
  


• 
  UK retail bosses raised fears of Chinese product ‘dumping’ into the UK and European markets through platforms such as Temu, Shein and Amazon (AMZN) amid Trump tariffs, according to FT.


• Spain’s Economy Minister said the pause in US tariffs is an opportunity for dialogue.

EQUITIES

• 
  European bourses (STOXX 600 +2.5%) opened entirely in the green and gradually grinded higher throughout the session. Sentiment today was boosted by the latest trade-related updates, which included an "exemption" of some electronic-related goods.


• 
  European sectors held a strong positive bias, in-fitting with the risk tone; some of the sectoral movers today are attributed to the weekend’s tariff updates. Tech was one of the better performing sectors today, lifted by a number of semiconductor names after US President Trump’s administration exempted items from reciprocal tariffs, including smartphones, storage devices and some other electronics. The likes of Infineon (+3.7%) and ASML (+3.2%) both gained. For stock specifics; Wood Group (+10.2%) jumped at the open after the Co. received a fresh GBP 242mln takeover from Dubai’s Sidara. BNP Paribas (+4.4%) said it expects to complete the purchase of Axa Investment Managers in July, BNP said it expects a -35bps impact on its CET1 ratio.


• 
  US equity futures are entirely in the green, benefiting from the risk tone; though some selling pressure was seen at the US cash open. In the pre-market; Apple (+6.4%), amongst a number of other large-cap tech stocks, are moving higher after Trump’s latest electronics-related “exemptions”. And more specifically for Apple, Counterpoint says it tops Q1 smartphone sales as it was helped by iPhone 16e launch. Elsewhere, Goldman Sachs (+2%, EPS, rev., equities sales & trading rev. topped; approved up to 40bln share buyback prog.). Finally for NVDIA (+4%), the Co. is to manufacture American-made AI supercomputers in US for first time.


• 
  Goldman Sachs Group Inc (GS) Q1 2025 (USD): EPS 14.12 (exp. 12.21), Revenue 15.06bln (exp. 14.81bln); approved up to 40bln share buyback programme

FX

• 
  DXY - Overall a choppy day for the Dollar with initial losses reversing as US players entered the fray on a catalyst-light day. Headlines explaining the upside in the Buck have been sparse, although the reversal is notable. DXY found a European floor at 99.21 before rising closer to session highs of 100.16, albeit still within Friday's 99.02-100.63 parameter. The Dollar will be looking for some impetus (in the absence of macro updates) from Fed voter Waller who is due to speak on the economic outlook at 18:00 BST.


• 
  EUR - Gave up initial gains on the back of both EUR weakness and USD strength, following the earlier reprieve from US President Trump classifying semiconductor tariffs under a separate basket instead of reciprocal tariffs. ING suggests market participants may be positioning for the tariff shock to materialise in US data before extending bullish bets, whilst EUR/USD is likely to be caught between a US-driven trend change and a dovish ECB stance in the near term. As a reminder, the ECB is currently observing its quiet period. EUR/USD resided hit an intraday high at 1.1424 before retreating to a low of 1.1283, with the pair still well within the 1.1188-1.1473 parameter set on Friday.


• 
  GBP - Remains on a firmer footing as the EUR/GBP cross losses keeps Sterling propped up, with cable testing resistance at 1.3200 before waning a touch. UK-specific drivers have been light thus far with some focus on tomorrow's UK labour market data, then inflation on Wednesday. Cable printed a 1.3059-1.3200 intraday range after topping Friday's best (1.3145) as the pair eyes the peak from the 3rd of April at 1.3207.


• 
  JPY - Another reversal of earlier fortunes with USD/JPY rebounding from intraday lows of 142.24 to levels back above 144.00 amid noticeable strength into the Dollar, but with no clear catalysts. USD/JPY traded within a 142.24-144.30 range, contained in Friday's 142.05-144.60 parameters.


• 
  Antipodeans - Mixed heading into the European close amid the aforementioned Dollar strenth. Aussie continued to be slightly more restricted than the Kiwi, with sub-par Chinese import data overnight likely hampering gains. AUD/USD resided in a 0.6276-0.6342 range, and NZD/USD traded in a 0.5821-0.5891 parameter.

FIXED

• 
  Modest divergence once again at the start of the session with Bunds in the red while USTs and Gilts traded modestly and more markedly in the green respectively.


• Specifics for EGBs have been a little light, we await anything from EU's Sefcovic in Washington while BTPs have been outperforming after S&P raised Italy’s sovereign rating by one notch to BBB+ from BBB. More broadly, Bunds are beginning to look ahead to Thursday’s ECB where a 25bps cut is priced and attention will be on forward guidance, given the significant economic uncertainty that has emerged recently, and TPI or similar after recent spread widening.


• 
  USTs had a modestly firmer start to the session and have been edging higher since in relatively limited newsflow, action which occurs despite the constructive risk tone as the sell-US trade takes a breather, though the USD has been under marked pressure at points. USTs continue to lift with the benchmark at a 110-13 high but within Friday's 109-08 to 110-21 band.


• As USTs continue to climb Bunds have also managed to make their way higher and are back modestly into the green and above 131.15 but someway shy of Friday's 131.42 best. Gilts following suit, to a 91.61 peak, but again shy of Friday's 91.75 high.

COMMODITIES

• 
  Crude Futures - Trimmed the gains seen during the European morning after initial tailwinds from the mostly positive risk appetite are being offset following "very positive and constructive" talks between the US and Iran over the weekend. Losses heading into the US open come amid gains in the Dollar. On the supply front, Iraq signed an undersea oil exports pipeline deal with Italy’s Micoperi and Turkey’s Esta which will have a 2.4mln bpd capacity. OPEC's MOMR meanwhile marginally downgraded 2025 and 2026 world oil demand forecasts by 100k apiece, partially due to tariffs. WTI May resided around USD 61.08-62.68/bbl while Brent Jun sat in a USD 64.35-65.90/bbl range.


• 
  Precious Metals - Mostly softer trade across precious metals with spot gold and silver unwinding some of their risk premium after US President Trump watered down his semiconductor tariffs, clarifying that it is separate to the basket of reciprocal tariffs, whilst US-Iran talks also went ahead over the weekend, with a second round planned. A rebound in the Dollar accelerated losses for gold and silver. Spot palladium outperformed amid the upbeat tone across the auto sector following the aforementioned update. Goldman Sachs forecasts gold prices to increase to USD 3,700 by year-end with an upside tail risk of reaching USD 4,500/oz.


• 
  Base Metals - Mixed trade following the tariff clarification on Friday and over the weekend, whilst overnight, reports pointed to more imminent Chinese stimulus. China is to roll out more monetary easing steps with China to ramp up counter-cyclical policy adjustments and implement various monetary policy measures in the future, according to Shanghai Securities News. China may cut rates and RRR if the trade war hurts the economy, according to PBoC-backed Financial News citing former PBoC adviser Yu Yongding. 3M LME copper resided in a narrow USD 9,144.35-9,271.00/t range.


• 
  OPEC MOMR (Mar): Global oil demand growth forecasts for 2025 and 2026 both revised down by 100k BPD each to 1.3mln BPD apiece (prev. 1.4mln BPD). Adjustment made due to “received data” for Q1 2025 coupled with US tariffs

EUROPEAN DATA

• 
  UK House Price Rightmove MM (Apr) 1.4% (Prev. 1.1%); YY 1.3% (Prev. 1.0%)

EUROPEAN NEWS

• 
  UK reportedly races to secure coal required to keep British steel furnaces, according to FT.


• S&P raised Italy’s sovereign rating by one notch to BBB+ from BBB; Outlook Stable.

GEOPOLITICS

• 
  Israel bombed a Gaza hospital as its military expanded its offensive, according to FT.


• Israeli military said sirens sounded in several areas in Israel and interception attempts were made after two missiles were launched from Yemen.


• 
  US President Trump said Iran talks are going well and that Ukraine-Russia talks might be going okay but added there is a time when you have to put up or shut up. Furthermore, Trump separately commented that they will be making a decision on Iran shortly, while the White House said Iran discussions were very positive and constructive, as well as noted that the sides agreed to meet again next Saturday and US special envoy Witkoff underscored to Iran’s Foreign Minister that he had instructions from President Trump to resolve differences through dialogue and diplomacy if possible.
  


• Iran’s Foreign Minister Araqchi said both sides want an agreement in the short-term and not ‘talks for talks’, while he added the second round of talks will probably be next Saturday.


• 
  Ukraine’s air force said on Saturday morning that Russia launched 88 drones in an overnight attack and announced on Sunday that Russia launched 55 drones targeting Ukraine, while the mayor of Ukraine's Sumy said over 20 were killed after a Russian missile strike on the city.
  


• 
  Russian Defence Ministry said Russian forces captured Yelyzavetivka in eastern Ukraine and Russian air defence systems shot down a Ukraine F-16 jet, according to Interfax. It was also reported that Russia accused Ukraine of attacking its energy infrastructure on several occasions over the weekend.
  


• 
  Russian Foreign Minister Lavrov said they have been keeping their word on a 30-day energy strikes moratorium and there were no direct or indirect contacts between Russia and Ukraine at the Antalya Forum. It was also reported that Turkish and Russian Foreign Ministers discussed efforts to achieve a ceasefire in the Russia-Ukraine war.
  


• Russia’s Kremlin said relations with the US are moving ahead very well and mutual visits by Russian and US envoys are very good reliable channels for communicating positions to each other.


• 
  Kremlin, on talks with US special envoy Witkoff, says such contacts are very useful and effective; on a possible Putin-Trump meeting, says it was not discussed in substantive terms with Witkoff.


• 
  Military representatives from Turkey and foreign nations are to meet in Turkey on April 15th-16th to discuss Black Sea security after a possible ceasefire between Ukraine and Russia, according to the Turkish Defence Ministry.


• 
  German Chancellor-in-waiting Merz said Germany is willing to send Taurus missiles to Ukraine, according to FT.

NOTABLE NORTH AMERICAN NEWS

• 
  Some of the world’s largest pension funds from Canada and Denmark are reportedly halting or reassessing their private market investments in the US due to President Trump's erratic policy blitz, according to FT.


• 
  Nvidia (NVDA) to manufacture American-made AI supercomputers in US for first time; within next four years, plans to produce up to half a trillion dollars of AI infrastructure in US via partnerships with TSMC (TSM) and Foxconn (FXCOF).

14 Apr 2025 - 15:00- EquitiesData- Source: Newsquawk