MNI EUROPEAN OPEN: Trump To Offer Auto Tariff Relief
EXECUTIVE SUMMARY
- TRUMP TO SOFTEN BLOW OF AUTOMOTIVE TARIFFS - WSJ
- BESSENT SETS JULY 4 TAX BILL GOAL AS ECONOMIC WORRIES MOUNT - BBG
- US BOOSTS Q2 BORROWING ESTIMATE TO $514b, Q3 $554B - MNI BRIEF
- CARNEY’S LIBERALS WIN CANADA ELECTION, WILL FORM MINORITY GOVERNMENT, CTV SAYS - RTRS
- MNI DISCUSSES THE OUTLOOK FOR FURTHER BOJ HIKES - MNI
Fig 1: Freight Rates Signalling Slower Trade Growth Ahead
Source: MNI - Market News/Bloomberg/Refinitiv.
EU
EU (POLITICO): “European Union auditors on Monday warned that the bloc is dangerously reliant on China for mainstream microchips powering everything from cars to washing machines.”
FRANCE (BBG): “French President Emmanuel Macron believes the US is open to ramping up sanctions against Russia after he urged Donald Trump last week to get tougher with Vladimir Putin, he said in a Paris Match interview released on Monday.”
SPAIN (BBG): “ Spanish Prime Minister Pedro Sanchez warned of a “long night ahead,” as the worst blackout to hit Europe in over a decade approached the 12-hour mark with no cause clearly identified and an uncertain timeline for the full restoration of power.”
SPAIN/PORTUGAL (BBC): “Kristian Ruby, of Eurelectric, told the BBC Radio 4's The World Tonight a "specific incident with an interconnector between France and Spain" occurred on Monday. Mr Ruby said this "meant the Spanish grid was disconnected from the broader European grid".”
ROMANIA (POLITICO): “George Simion, the candidate tipped to win the first round of the presidential election, has publicly aligned himself with Donald Trump. … The first round of the rerun will be on May 4, with a second on May 18.”
US
TARIFFS (WSJ): “President Trump is expected to soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs he has imposed and easing some levies on foreign parts used to manufacture cars in the U.S., according to people familiar with the matter.
FISCAL (BBG): “Treasury Secretary Scott Bessent set a July 4 goal to pass President Donald Trump’s multi-trillion dollar tax cut package as polling shows that voters largely disapprove of the White House’s handling of the economy.”
FISCAL (MNI BRIEF): The U.S. Treasury on Monday increased its estimate for federal borrowing for the current quarter by USD391 billion to USD514 billion, while reiterating its previous assumption for cash balance at the end of June, assuming that Congress eventually raises or suspends the debt limit.
FISCAL (BBG): "Treasury Secretary Scott Bessent tells reporters that the X date will be announced either at the end of this week or next week.
FED (MNI POLICY): Former Federal Reserve Governor Kevin Warsh did not comment directly on the outlook for monetary policy in his IMF speech last week, but he offered plenty of clues into the kind of chair he would be if President Donald Trump appoints him to replace Jerome Powell next year. Most prominently, Warsh expressed frustration with both the frequency of Fed communications and its short-term focus, indicating he would impose a greater level of circumspection of the Federal Open Market Committee that includes fewer central bank speeches and less near-term forecasting.
OTHER
CANADA (RTRS): “Canadian Prime Minister Mark Carney's Liberals retained power in the country's election on Monday, but CTV News predicted they would fall short of the majority government he had wanted to help him negotiate tariffs with U.S. President Donald Trump.”
IRAN (BBG): “As countries around the world try to bargain with US President Donald Trump over tariffs, longterm adversary Iran is pitching its sanctioned economy to him as an investment opportunity.”
JAPAN (MNI): MNI discusses the outlook for further BOJ hikes. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
CHINA
CHINA/US (BBG): “ China’s top diplomat warned countries against caving in to US tariff threats, as the Trump administration hints at the possible use of new trade tools to pressure Beijing.”
PRIVATE SECTOR (XINHUA): "Lawmakers have recommended the draft private sector promotion law be passed during the current session of the NPC Standing Committee, Xinhua news agency has reported, adding that officials called for authorities to unveil concrete measures to ensure its adoption."
RETAIL SALES (YICAI): "Shenzhen city will incentivise enterprises to boost domestic sales by offering a CNY500,000 reward for every CNY100 million increase in retail sales, up to a maximum of CNY10 million, Yicai.com reported."
CHINA MARKETS
MNI: PBOC Net Injects CNY120 Bln via OMO Tuesday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY340.5 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY120 billion after offsetting the maturities of CNY220.5 billion reverse repos today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5633% at 09:35 am local time from the close of 1.7489% on Monday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 48 on Monday, compared with the close of 49 on Sunday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Lower At 7.2029 Tues; -1.01% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.2029 on Tuesday, compared with 7.2043 set on Monday. The fixing was estimated at 7.2803 by Bloomberg survey today.
MARKET DATA
NEW ZEALAND MARCH FILLED JOBS +0.2% M/M; FEB. 0.0%
SOUTH KOREA MARCH RETAIL SALES +9.2% Y/Y; FEB. +4.4%
SOUTH KOREA MARCH DEPARTMENT STORE SALES -2.1% Y/Y; FEB. -3.6%
SOUTH KOREA MARCH DISCOUNT STORE SALES -0.2% Y/Y; FEB. -18.8%
MARKETS
US TSYS: Asia Wrap - Futures Slightly Lower
TYM5 has traded a little lower with a range of 111-26 to 111.30+ during the Asia-Pacific session. It last changed hands at 111-27+, down 0-01 from the previous close. No Cash trading today with Japan out.
- Bloomberg- “Treasury Secretary Scott Bessent's debt-management team is expected to keep plans for sales of longer-dated securities steady, despite recent market swings.”
- “The quarterly supply announcement will set the size of upcoming auctions, including 3-, 10-, and 30-year maturities, and may provide guidance on debt-limit considerations.”
- “Despite having criticized his predecessor Janet Yellen for tilting US debt toward short-dated Treasuries, Bessent since taking office in January has said the department is “a long way” from replacing them with longer-term debt.”
- Microsoft and Meta will headline earnings on Wednesday, followed by Apple, Amazon, and Eli Lilly on Thursday, these reports should hopefully provide the market with some clarity and will dictate whether this bounce in risk is able to continue or falter.
- The 10-year Yield, has put in a lower high around 4.40% and has broken through the recent support around 4.25%. The next support is towards the 4.10 area which should find supply once more as the market will continue to look for higher term premium while uncertainty remains elevated.
- Data/Events : US GDP, ISM Manufacturing, NFM payrolls the main events this week.
AUSSIE BONDS: Subdued Session Ahead Of Q1 CPI
ACGBs (YM -1.0 & XM -2.5) are weaker but near the middle of the ranges of today’s Sydney session on a data-light day.
- No cash US tsys trading in Asia-Pac today, with Japan out. TYM5 is trading at 111-27+, -0-01+ from closing levels.
- Cash ACGBs are 1-2bps cheaper.
- The bills strip is flat to -1 across contracts.
- Global foreign exchange markets recorded a “sharp rise” in volatility earlier this month as traders worked through the potential impact of US tariff announcements, before becoming “more settled” in recent days, according to Reserve Bank of Australia Assistant Governor Christopher Kent. (per BBG)
- RBA-dated OIS pricing is little changed across meetings today. A 50bp rate cut in May is given a 12% probability, with a cumulative 117bps of easing priced by year-end.
- Tomorrow, the local data calendar will see Q1 CPI. It is forecast to show the RBA's preferred trimmed mean falling below the top of the 2-3% target band for the first time since Q4 2021. This should signal another 25bp cut on May 20. Retail sales are on Friday. The Federal Election is on Saturday.
- The AOFM plans to sell A$1200mn of the 2.75% 21 June 2035 bond on Friday.
BONDS: NZGBS: Closed At Session Cheaps, Labour Demand & House Lending Up
NZGBs closed near session cheaps, with benchmark yields 3-4bps higher.
- No cash US tsys trading in Asia-Pac today, with Japan out. TYM5 is trading at 111-27+, -0-01+ from closing levels
- Filled jobs rose 0.2% m/m in March but are still down 1.5% y/y after being flat and down 1.6% y/y in February. However, the 3-month annualised rate at 0.4% turned positive for the first time since April 2024, signalling that Q1 employment may be flat to slightly higher on the quarter when labour market data is released on May 7.
- Labour demand remains weak but shows some tentative signs that it has begun to gradually recover. 3-month momentum is improving for filled jobs and also SEEK job ads, which rose 8.7% annualised in March.
- The RBNZ’s residential mortgage lending data showed lending to all borrowers at its highest since November 2011. First-home buyers up 24% y/y.
- Swap rates closed flat to 1bp higher.
- RBNZ dated OIS pricing closed showing 27bps of easing priced for May, with a cumulative 82bps by November 2025.
- Tomorrow, the local calendar will see ANZ Business Confidence.
- On Thursday, the NZ Treasury plans to sell NZ$250mn of the 4.50% May-30 bond, NZ$150mn of the 4.25% May-34 bond and NZ$50mn of the 5.00% May-54 bond.
FOREX G10 Wrap - USD Can’t Hold Onto Gains
The BBDXY has had an Asian range of 1219.50 - 1222.42, Asia is currently trading around 1223. Spain is still searching for answers for Monday's Blackouts, the EU said there are no indications of a cyber attack. Bloomberg - “ Olli Rehn said there’s a danger that inflation will dip below the 2% target and that the euro’s strength has added “further complexity” to policy.”
- EUR/USD - Asian range 1.1374 - 1.1422, Asia is currently trading 1.1382. Intra-day support is around 1.1300, should this area not hold demand should remerge on dips back to 1.1100.
- GBP/USD - Asian range 1.3397 - 1.3444, the GBP continues to lead higher, testing decent Weekly resistance now around 1.3500.
- USD/JPY - Asian range 142.00 - 142.58, has drifted higher for most of the Asia session. On the day the 143 handle should once again offer supply, then more importantly the 145/146 area should once more offer good levels for sellers to reengage.
- USD/CNH - Asian range 7.2692 - 7.2887, the USD/CNY fix printed lower again at 7.2029. Bloomberg - “The yuan was boosted by a report that China vowed to comprehensively rectify all kinds of unreasonable regulations and practices that restrict market access.” This saw USD/CNH break below the 7.2800 support which contributed to sudden spikes in both the AUD and NZD.
- USD/CAD - Asian range 1.3809 - 1.3867, currently trading 1.3860. Canada’s Liberal Party wins the election too soon to know if it's by a majority. Bounces back to 140.00 should find sellers first up.
- Cross asset : SPX +0.21%, Gold 3317, US TYM5 111-27+, BBDXY 1222, Crude oil 61.60.
- Data/Events : Spain GDP & CPI, ECB CPI expectations, Germany consumer confidence
Fig 1 : GBP/USD Spot Weekly Chart
Source: MNI - Market News/Bloomberg
FOREX: Antipodean Wrap - AUD & NZD Drift Sideways
A very quiet session in Asia today, risk trading slightly better as stocks hold onto their late bounce in the US. (Bloomberg) -- “Global foreign exchange markets recorded a “sharp rise” in volatility earlier this month as traders worked through the potential impact of US tariff announcements, before becoming “more settled” in recent days, according to Reserve Bank of Australia Assistant Governor Christopher Kent. Kent didn’t comment on what the tariffs meant for Australia’s economy or the nation’s monetary policy outlook.”
- AUD/USD - Asian range 0.6415 - 0.6450, After a very quick spike up to 0.6450 the Aud has just as quickly fallen back towards the 0.6415 area. Dips back to the 0.6250/0.6300 area should continue to find demand while the market continues to focus on a lower USD.
- AUD/JPY - Asian range 91.24 - 91.68. Price goes into the London trading around 91.35, still within the last 11 days range of 0.8950/0.9200.
- NZDUSD - Asian range 0.5951 - 0.5987, going into London trading around 0.5951. Demand should return first around 0.5900, then around the 0.5850 area.
- AUD/NZD - Asian range 1.0748 - 1.0785, the cross has continued to drift higher in the Asian session. Watch for supply to return on any bounce back towards the 1.0800/50 area.
Fig 1 : AUD/JPY Spot Hourly Chart
Source: MNI - Market News/Bloomberg
ASIA STOCKS: A Modest but Broadly Positive Day Across Asia.
As President Trump is now indicating that he will reduce the expected tariffs on autos, Asian equities performed well today with Korea’s auto stocks up over +2.5% giving the KOSPI a boost.
China’s major bourses did very little in what seemed like a directionless day despite the positive headline.
- The Hang Seng rose just +0.12% today despite a broader regionally positive day whilst the CSI 300 fell -0.13%. Shanghai Comp was down -0.03% and Shenzhen held onto modest gains of +0.35%
- The KOSPI delivered strong gains of +0.51%, led by the auto sector and delivering three successive days of gains.
- The FTSE Malay KLCI went the other way falling -0.15% after yesterday’s strong gains.
- In Indonesia the Jakarta Composite’s good run continues eking out a gain of +0.50% for sixth successive day of gains
- Singapore’s FTSE Straits Times was up +0.25% whilst the PSEi in the Philippines was down marginally -0.06%.
- India’s NIFTY 50 opened marginally positive trying to follow on from yesterday’s strong gains of +1.20% having taken back the losses from earlier in the month to be back at year to date highs.
OIL: Crude Continues Sell Off During APAC Trading Following Dallas Fed Drop
Oil prices continued declining during today’s APAC session. They fell on Monday with the sharp drop in the Dallas Fed manufacturing index adding to fears that trade agreements wouldn’t be reached with the US. WTI is 0.9% lower to $61.50/bbl, close to the intraday trough, while Brent is down 0.8% to $65.33/bbl. The USD index is up 0.3% which is also likely weighing on dollar-denominated crude.
- Oil’s reaction to the Dallas Fed data puts other releases this week, including GDP, ISM/PMIs and payrolls, even more in the spotlight. Signs that there was weakening in April, the reciprocal tariffs were announced April 2, would likely drive a further sell off as crude has been particularly worried about the impact of increased protectionism on global energy demand.
- China retaliated to US tariffs and while the US says that it is negotiating with it, China continues to deny that talks are taking place. Instead it has promised support for exporters and the economy and threatened others if they impact it negatively to gain favour with the US and warned against giving in to American “bullying”. China is the world’s largest oil importer.
- The supply side remains in focus with OPEC meeting on May 5 and the prospect of successful US-Iran talks resulting in an easing of sanctions. Also, US industry-based inventory data are released today.
- Later US April consumer confidence, March merchandise trade, JOLTS job openings, inventories and February house prices print, as well as the April European Commission survey, Spanish Q1 GDP and preliminary April CPI. The ECB’s Cipollone and Donnery speak.
Gold Gives Back Overnight Gains
- Gold finished the US trading session higher by +0.73% at YS$3,343.98, having been as low as $3,268.23 earlier in the day yet couldn’t hold onto those gains during the Asian trading day dropping back to $3,314.40.
- The overnight move had been supported by a weaker USD and weaker than expected data.
- The Dallas Fed. Manufacturing Activity fell to its lowest in 5 years with survey respondents showing executives describing the current situation as chaos as supply line disruptions decimate activity.
- This has reduced expectations for Wednesday’s data which sees employment data, inflation and growth.
- Gold had started the week in the Asian trading session on the back foot, trending downwards before the Texas data which has refocused attention on the possibility that already the trade war may be showing up in US data.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 29/04/2025 | 0600/0800 | * |  DE | GFK Consumer Climate |
| 29/04/2025 | 0600/0800 | ** |  SE | Private Sector Production m/m |
| 29/04/2025 | 0600/0800 | SE | Flash Quarterly GDP Indicator | |
| 29/04/2025 | 0600/0800 | ** | SE | Retail Sales |
| 29/04/2025 | 0700/0900 | ** | SE | Economic Tendency Indicator |
| 29/04/2025 | 0700/0900 | *** |  ES | HICP (p) |
| 29/04/2025 | 0700/0900 | *** | ES | GDP (p) |
| 29/04/2025 | 0700/0900 |  EU | ECB's Cipollone On Financial and Trade Fragmentation | |
| 29/04/2025 | 0800/1000 | ** | EU | M3 |
| 29/04/2025 | 0800/1000 | ** |  IT | ISTAT Consumer Confidence |
| 29/04/2025 | 0800/1000 | ** | IT | ISTAT Business Confidence |
| 29/04/2025 | 0800/1000 | ** | EU | ECB Consumer Expectations Survey |
| 29/04/2025 | 0900/1100 | * | EU | Consumer Confidence, Industrial Sentiment |
| 29/04/2025 | 0900/1000 | * |  GB | Index Linked Gilt Outright Auction Result |
| 29/04/2025 | 0940/1040 | GB | BOE Ramsden At Innovate Finance Global Summit | |
| 29/04/2025 | 1230/0830 | ** |  US | Advance Trade, Advance Business Inventories |
| 29/04/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 29/04/2025 | 1300/0900 | ** | US | S&P Case-Shiller Home Price Index |
| 29/04/2025 | 1300/0900 | ** | US | FHFA Home Price Index |
| 29/04/2025 | 1300/0900 | ** | US | FHFA Home Price Index |
| 29/04/2025 | 1400/1000 | *** | US | Conference Board Consumer Confidence |
| 29/04/2025 | 1400/1000 | *** | US | JOLTS jobs opening level |
| 29/04/2025 | 1400/1000 | *** | US | JOLTS quits Rate |
| 29/04/2025 | 1430/1030 | ** | US | Dallas Fed Services Survey |
| 30/04/2025 | - |  JP | Bank of Japan Meeting | |
| 30/04/2025 | 2350/0850 | * | JP | Retail Sales (p) |
| 30/04/2025 | 2350/0850 | ** | JP | Industrial Production |
| 30/04/2025 | 0130/0930 | *** |  CN | CFLP Manufacturing PMI |
| 30/04/2025 | 0130/0930 | ** | CN | CFLP Non-Manufacturing PMI |
| 30/04/2025 | 0130/1130 | *** |  AU | CPI inflation |
| 30/04/2025 | 0130/1130 | *** | AU | CPI Inflation Monthly |
| 30/04/2025 | 0145/0945 | ** | CN | S&P Global Final China Manufacturing PMI |
| 30/04/2025 | 0530/0730 | *** |  FR | GDP (p) |
| 30/04/2025 | 0530/0730 | ** | FR | Consumer Spending |
| 30/04/2025 | 0600/0800 | ** | DE | Import/Export Prices |
| 30/04/2025 | 0600/0800 | ** | DE | Retail Sales |
| 30/04/2025 | 0600/1400 | ** | CN | MNI China Money Market Index (MMI) |
| 30/04/2025 | 0645/0845 | *** | FR | HICP (p) |
| 30/04/2025 | 0645/0845 | ** | FR | PPI |
| 30/04/2025 | 0700/0900 | ** |  CH | KOF Economic Barometer |
| 30/04/2025 | 0755/0955 | ** | DE | Unemployment |
| 30/04/2025 | 0800/1000 | *** | DE | GDP (p) |
| 30/04/2025 | 0800/1000 | *** | IT | GDP (p) |
| 30/04/2025 | 0800/1000 | *** | DE | Bavaria CPI |
| 30/04/2025 | 0800/1000 | *** | DE | North Rhine Westphalia CPI |
| 30/04/2025 | 0800/1000 | *** | DE | Baden Wuerttemberg CPI |
| 30/04/2025 | 0900/1100 | *** | IT | HICP (p) |
| 30/04/2025 | 0900/1000 | ** | GB | Gilt Outright Auction Result |
| 30/04/2025 | 0900/1100 | *** | EU | EMU Preliminary Flash GDP Q/Q |
| 30/04/2025 | 0900/1100 | *** | EU | EMU Preliminary Flash GDP Y/Y |
| 30/04/2025 | 1000/1200 | ** | IT | PPI |
| 30/04/2025 | 1100/0700 | ** | US | MBA Weekly Applications Index |
| 30/04/2025 | 1200/1400 | *** | DE | HICP (p) |
| 30/04/2025 | 1215/0815 | *** | US | ADP Employment Report |
| 30/04/2025 | 1230/0830 | *** |  CA | Gross Domestic Product by Industry |
| 30/04/2025 | 1230/0830 | *** | US | GDP |
| 30/04/2025 | 1230/0830 | *** | US | Employment Cost Index |
| 30/04/2025 | 1230/0830 | *** | CA | Gross Domestic Product by Industry |
| 30/04/2025 | 1230/0830 | *** | US | Treasury Quarterly Refunding |
| 30/04/2025 | 1342/0942 | *** | US | MNI Chicago PMI |
