MARKET WRAPS
Watch For:
No major economic indicators expected; trading update for OMV
Opening Call:
Stock futures were pointing higher, rebounding in tandem with Asian stocks after Monday's sharp selloff. The dollar weakened. Treasury yields were lower; oil futures and gold gained.
Equities:
European equity futures were tracking higher early Tuesday as tariff concerns remain front and center. Global stock markets took a beating Monday as hopes that the White House would ride to the rescue over the weekend, pausing the tariffs, were dashed.
President Trump said Monday he planned to add a 50% tariff on China starting Wednesday if Beijing doesn't withdraw its planned 34% retaliatory tariff increase on the U.S.
China's commerce ministry said on Tuesday that Beijing would resolutely take countermeasures to safeguard its rights and interests. "If the U.S. insists on its own way, China will fight to the end."
Investors are hesitant to declare an end to the market turmoil. "There won't be universal agreement on whether this was the 'wash moment' that allows the markets to establish greater stability-and for good reason," said Mohamed El-Erian, chief economic adviser at asset manager Allianz. "The underlying causes of the volatility are themselves fluid."
Forex:
The U.S. dollar was lower early Tuesday. Trump's tariffs were initially expected to boost the greenback, since the tax on imports should increase dollar demand. However, concerns about a U.S. recession, increased expectations of interest cuts from the Fed and exposure to foreign investors are hurting the currency.
"Liquidity is important here, but so is the balance of payments picture in that your country does not want to be heavily dependent on foreign capital. Here, the dollar gets marked down on its 4% current account deficit and the view that foreign investors will pull capital or certainly raise FX [foreign-exchange] hedge ratios on longer-term/stickier investments in the U.S.," said ING analyst Chris Turner.
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China loosened its grip on the yuan by weakening its daily reference rate past a key threshold. The People's Bank of China set the so-called fixing at 7.2038 against the dollar on Tuesday, the first time since September 2023 that the reference rate breached 7.20.
Bonds:
Treasurys yields were mostly lower. Markets remain volatile as many investors fear tariffs may cripple the economy and boost prices. U.S. March CPI due Thursday could show some impact of early tariffs, BNP Paribas economists write. Consensus in a WSJ survey sees 12-month CPI at 2.5%, slowing from February's 2.8%. BNPP forecasts 2.6%.
Energy:
Oil futures rose on a likely technical rebound after falling for a third consecutive session overnight. Citi Research recommended that investors and consumers refrain from buying and stay short risk-exposed commodities, including oil, until developments such as a 'Fed put' or a material 'Trump put' kick in.
"Any rallies this week on minor trade deal headlines or delays to the imposition of the April 9 tariffs would provide opportunities to sell rallies," said Maximilian J. Layton, global head of Commodities Research.
Two key risks against Brent crude oil have deteriorated further, UOB said. The first key risk is further global growth slowdown due to the chaotic rollout of punitive reciprocal tariffs. The second key risk is the bigger-than-expected return of production volume from OPEC+, it added. UOB has lowered its Brent forecasts by $5/bbl to $65/bbl for both 2Q and 3Q 2025 and by $5/bbl to $60/bbl for both 4Q 2025 and 1Q 2026.
Metals:
Gold gained, but the near-term outlook has turned cautious. "As the new week unfolds, investor confidence remains delicate," said Fawad Razaqzada, market analyst at City Index and FOREX.com. "With the trade war rhetoric reigniting, many traders are reluctant to engage until the dust settles," the analyst said.
The outlook for the precious metal has become more cautious in the near term, even if safe-haven demand is going to be elevated amid the market turmoil, the analyst added.
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Copper prices should find some fundamental support at the $8,800/metric ton mark, "as it closely aligns with the cost of production for many Chinese smelters," Sucden Financial's Daria Efanova and Viktoria Kuszak said.
"We anticipate this level will hold, provided there are no further retaliatory measures from the U.S.'s key trading partners," they say. However, sentiment in base metals has remained weak, and the markets are strained. "It is difficult to accurately gauge the future direction of prices, with speculative noise clouding the fundamental picture," they say.
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Iron ore futures fell amid pressures from the ongoing uncertainties surrounding global tariffs. The fundamentals of iron ore remain relatively healthy with solid demand, but prices are weighed by macroeconomic uncertainties, Citic Futures analysts said.
TODAY'S TOP HEADLINES
The Market Is Overreacting, White House Says. That Depends On How Tariffs Evolve.
A whipsaw trading day in the financial markets Monday left traders and investors trying to figure out what could be next. But the White House said it isn't concerned and plans to keep going with its tariff strategy.
"Given the scope and speed with which the president has acted on tariffs, it isn't surprising that there would be financial-market volatility," said Stephen Miran, chair of the White House Council of Economic Advisers, in an interview.
Trump Turns Screws on China, Leaves Door Open to Deals With Other Countries
WASHINGTON-President Trump hit back hard against China but left the door open for talks to lower tariffs on other countries, trade-war moves that left much of the world confused as countries raced to avoid damaging new duties on their goods.
"They can both be true," Trump said Monday when asked whether the tariffs are permanent or up for negotiation.
Bitcoin could crash below key support level as resilience seems short-lived
Bitcoin's brief resilience last week during a global market rout appeared to be short-lived by Monday, threatening to hand crypto bulls another headache.
The world's largest cryptocurrency BTCUSD fell to as low as $74,436 on Monday, the lowest level since Nov. 7, according to Dow Jones Market Data. It traded at around $79,000 on Monday afternoon, paring some earlier losses, while it is still down 27.8% from its record high at $109,225 reached on Jan. 20, President Donald Trump's inauguration day.
U.S. and Iran to Hold High-Stakes Nuclear Talks
WASHINGTON-The U.S. and Iran said Monday that they would convene nuclear talks, launching the two adversaries with clashing objectives into high-stakes negotiations.
President Trump said the meetings beginning Saturday would involve direct negotiations between high-level U.S. and Iranian officials, while Iran's Foreign Minister, Abbas Araghchi, said they would be indirect talks in Oman.
Samsung Guides for Softer First-Quarter Profit But Still Beats Consensus
Samsung Electronics guided for softer first-quarter operating profit but still beat market expectations, as strong smartphone sales likely helped buoy earnings and offset the delayed recovery of its flagship semiconductor business.
The mixed guidance comes as the world's largest maker of memory chips and smartphones braces for the challenges posed by U.S. President Trump's sweeping tariffs on trading partners.
Apple Users Rush to Upgrade iPhones Ahead of Potential Tariffs-Related Price Hikes
When President Trump announced robust tariffs last Wednesday that triggered a stock selloff, Joel Burke decided to head to the Apple store.
Burke, a 32-year-old policy professional in Washington, D.C., is among the throngs of U.S. consumers who have rushed to buy new iPhones over the past week, expecting that new tariffs will prompt Apple to raise prices.
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Expected Major Events for Tuesday
04:30/NED: Feb Consumer Spending
04:30/NED: Mar CPI
06:00/DEN: Feb Industrial production & new orders
06:30/HUN: Mar CPI
06:45/FRA: Feb Foreign trade
06:45/FRA: Feb Balance of payments
07:00/AUT: Jan Foreign Trade
07:00/CZE: Mar Unemployment data
09:00/CRO: Mar PPI
10:00/IRL: Feb Industrial Production and Turnover
23:01/UK: Mar UK Nations and Regions Growth Tracker
All times in GMT. Powered by Onclusive and Dow Jones.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
April 08, 2025 00:00 ET (04:00 GMT)
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