MNI US OPEN - Carney's Liberals Win Narrow Victory in Election
EXECUTIVE SUMMARY
- CANADA’S LIBERALS TO LEAD NEXT GOV'T, CONSERVATIVE LEADER SET TO LOSE SEAT
- CHINA VOWS TO STAND FIRM, URGES NATIONS TO RESIST ‘BULLY’ TRUMP
- SPAIN, PORTUGAL SLOWLY RETURNING TO NORMAL AFTER CRIPPLING BLACKOUT
- EUROZONE CONSUMER INFLATION EXPECTATIONS RISE TO HIGHEST LEVEL A YEAR
Figure 1: Canada Partial Federal Election Results, Seats
Source: MNI/CBC
NEWS
CANADA (MNI): Liberals to Lead Next Gov't, Conservative Leader Set to Lose Seat
Prime Minister Mark Carney's centre-left Liberal Party has secured a fourth consecutive term in office following an election campaign that has seen one of the most notable changes in fortune in recent Western political history. The Liberals look set to have secured 168 out of 343 seats, an increase of eight from 2021 and four short of an overall majority. Despite the most recent polling and betting market probabilities showing a Liberal majority as the most likely outcome, even retaining top spot will be viewed as a remarkable turnaround for a party that stood ~20-25% behind its centre-right Conservative party (CPC) opponents at the start of the year.
For the Liberals, the result means forming either a coalition or a confidence and supply agreement. Their options are the regionalist Bloc Quebecois - down nine seats to 23 - or the left-wing New Democratic Party (NDP). The NDP suffered its worst election on record, falling from 25 seats in 2021 to just seven, with party leader Jagmeet Singh losing his riding in Vancouver. The NDP also loses 'official party status', reducing its funding for party research offices and speaking allotment at Question Time.
US/CANADA (MNI): Carney Says Will Win US Trade War After Election Win
Mark Carney said Canada will win the trade war with the U.S. following his Liberal Party's federal election win Monday, rejecting U.S. President Donald Trump's talk earlier in the day of making its northern neighbor the 51 State. “When I sit down with President Trump it will be to discuss the future trade and security relationship between two sovereign nations,” Carney told supporters early Tuesday morning in Ottawa. “United we will win this trade war.”
US/CHINA (BBG): China Vows to Stand Firm, Urges Nations to Resist ‘Bully’ Trump
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. Chinese Foreign Minister Wang Yi said appeasement will only embolden the “bully” at a BRICS meeting on Monday, rallying the group of emerging-market nations to fight back against US levies. The stern remarks show China intends to resist pressure to enter trade talks even as US Treasury Secretary Scott Bessent suggests Washington could ban certain exports to China to gain leverage.
US/CHINA (BBG): China Says Willing to Cooperate With US After Boeing Spat
China is willing to support normal cooperation with US companies, the country’s Ministry of Commerce said, just days after Chinese airlines rejected taking delivery of any new jets from US planemaker Boeing Co. Officials in Beijing acknowledged that tariff hikes implemented by US President Donald Trump have disrupted the global air transport market, and both Chinese airlines and Boeing have been severely affected.
US (BBG): Bessent Sets July 4 Tax Bill Goal as Economic Worries Mount
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. “We hope that we can have this tax portion done by the Fourth of July,” Bessent said Monday following a meeting with congressional leaders. The Treasury secretary and National Economic Director Kevin Hassett met with Senate Majority Leader John Thune, House Speaker Mike Johnson and the two tax committee chairmen, Senator Mike Crapo and Representative Jason Smith. Congress returned to Washington on Monday following a two-week break, and the tax bill is the party’s top legislative priority.
US (WSJ): Trump to Soften Blow of Automotive Tariffs
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. The decision will mean that automakers paying Trump’s automotive tariffs won’t also be charged for other duties, such as those on steel and aluminum, according to people familiar with the policy. The move would be retroactive, the people said, meaning that automakers could be reimbursed for such tariffs already paid. The 25% tariff on finished foreign-made cars went into effect early this month.
RUSSIA/UKRAINE (BBG): Kremlin Says 30-Day Truce Impossible W/O Solving Issues First: IFX
A 30-day ceasefire is impossible without settling all issues in advance, Kremlin spokesman Dmitry Peskov says, according to RIA Novosti. Interest of reaching peace talks is primary, Peskov said, responding to a question about Ukrainian President Volodymyr Zelenskiy’s legitimacy. The Kremlin has in the past repeatedly made comments and promoted a narrative challenging Zelenskiy’s legitimacy as part of its campaign to undermine the Ukrainian government.
SPAIN/PORTUGAL (BBG): Spain Slowly Returning to Normal After Crippling Blackout
Spain and Portugal were returning to some semblance of normality early Tuesday, with many questions remaining about what caused one of Europe’s worst blackouts in years across the Iberian peninsula the previous day. Spanish power supplies were back to nearly 100% capacity at around 7 a.m. in Madrid, and urban trains were slowly returning to regular service, according to operators.
FRANCE/CHINA (BBG): France Seeks Fees on Small Parcels After Flows From China Surge
France is pushing to slap fees on small packages from discount Chinese retailers including Temu and Shein Group Ltd. in an effort to stem a flow that risks accelerating as the US implements sweeping tariffs. The proposed stopgap measure to put handling fees on such cheap imports would come ahead of a wider European overhaul of customs duties, Budget Minister Amelie de Montchalin said during a visit to a parcel sorting center near Paris Charles de Gaulle airport on Tuesday.
CHINA (MNI INTERVIEW): Yuan to Emerge as Regional Reserve Currency
MNI speaks to Cao Yuanzheng, who has served as Bank of China chief economist and advised the State Council, about the yuan and China's economy in a two part interview - On MNI Policy MainWire now, for more details please contact sales@marketnews.com
CHINA (MNI): HK Readies for Return of Oversea-Listed China Firms
MNI (Beijing) Hong Kong’s securities watchdog said it will provide appropriate guidance and assistance for Chinese companies listed overseas should they wish to return and list in Hong Kong, according to a report by the Securities Times on Tuesday. The Stock Exchange of Hong Kong and the Securities and Futures Commission have made preparations and contacted some relevant companies regarding their intention to return in response to the latest global changes, the newspaper said.
RBA (MNI): RBA’s Kent Highlights Recent ‘Sharp Rise’ in Aussie Volatility
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. The Australian dollar tumbled 4.5% against the greenback in the aftermath of US President Donald Trump’s tariff announcements, Kent said in a speech in Sydney on Tuesday. That was its largest single-day drop outside of the global financial crisis.
INDIA/PAKISTAN (BBG): Pakistan Says It Shot Down an Indian Spy Drone in Kashmir
Pakistan’s army said it shot down an Indian spy drone along their disputed border in the Kashmir region, as tensions rise over last week’s militant attacks that killed 26 people. The unmanned drone breached the so-called Line of Control in Kashmir, a northern region claimed by both countries, Pakistan’s state-run television channel said on Tuesday, citing unidentified security personnel.
MEXICO (BBG): Banxico to Transfer $919 Million Surplus to Mexico Government
Mexico’s central bank announced in a statement that it will hand to the government a surplus of almost 18 billion pesos (about $919 million), marking the first time in years that it had money left over to add to the public coffers. Banxico, as the central bank is known, reached a surplus in large part due to the weakening of the Mexican currency against the dollar, which increased the value of its reserves. The bank is obligated to declare by the end of April each year what amount it will turn over the same month to the Finance Ministry.
CORPORATE (BBG): Amazon to Show Cost of US Tariffs on Each Product: Punchbowl
Amazon will “soon” display the added cost of US tariffs on individual products, Punchbowl reports, citing a person familiar with the matter. Site will display how much of a product’s cost comes from tariffs next to the total listed price.
DATA
ECB DATA (MNI): 1-Year Ahead Inflation Expectations Rise to Highest a Year
- ECB 1-YEAR CONSUMER INFLATION EXPECTATIONS 2.9%
- ECB 3-YEAR CONSUMER INFLATION EXPECTATIONS 2.5%
Eurozone consumer inflation expectations rose in March to the highest levels in a year, according to the ECB's Consumer Expectation Survey. However, this is unlikely to sway many Governing Council views, with the current focus clearly on downside growth risks stemming from tariffs and related uncertainty. Expectations for inflation over the next 12 months increased by 0.3 percentage points to 2.9%, the highest level since April 2024, while expectations for three years ahead edged up by 0.1 percentage points to 2.5%, the highest since March 2024.
EUROZONE DATA (MNI): Credit Growth Firms Again Although Impulse Stabilising
Private sector lending growth continued its steady acceleration in March, rising two tenths to 2.6% Y/Y or three tenths to 2.0% Y/Y when adjusting for sales & securitisations (highest since Jun 2023) Adjusting for sales & securitisations, lending growth to both non-financial corporates (NFCs) and households accelerated two tenths to 2.3% Y/Y (highest since Jul 2023) and 1.7% Y/Y (highest since Jun 2023) respectively. Spain leads lending growth to households (2.6% Y/Y) with France lagging (0.7% Y/Y), although France leads NFC growth (3.1% Y/Y) whilst Italy is the only country still contracting (-0.9% Y/Y but from -4.0% Y/Y as recently as July).
SPAIN DATA (MNI): April Inflation Firmer Than Expected
- SPAIN APR FLASH HICP +0.6% M/M, +2.2% Y/Y
- SPAIN APR FLASH CPI +0.6% M/M, +2.2% Y/Y
- SPAIN APR FLASH CORE CPI +2.4% Y/Y
Spanish April preliminary HICP came in firmer than expected on the yearly rate at +2.2% Y/Y (vs +2.0% cons; +2.2% prior) and the sequential reading at 0.6% M/M (0.3% cons; 0.7% prior). The national CPI also came in above expectations at +2.2% Y/Y (vs 2.0% cons; 2.3% prior) and 0.6% M/M (vs 0.4% cons; 0.1% prior). Core CPI came in above expectations, also, at +2.4% Y/Y (vs 2.3% cons; 2.0% prior). Core HICP was 2.5% Y/Y. The headline rate was driven downwards by energy, while the leisure and
culture category had an upward contribution vs last month, INE added.
UK APR BRC SHOP PRICES +0% M/M, -0.1% Y/Y (MNI)
SWEDEN DATA (MNI): Consumer Sentiment at Lowest since Dec '23; Weak Employment Signals
The Swedish April Economic Tendency Indicator weakened to 94.8 (vs a two tenth downwardly revised 95.0 prior), its lowest since August. The fall was driven by consumers, with overall industry sentiment actually ticking higher on the month. However, expected employment metrics softened, which taken alongside an uptick in firm inflation expectations, highlights a difficult trade-off for the Riksbank. Overall, the survey should support rates to be kept on hold at 2.25% on May 8, but the risks are tilted towards more easing ahead, in our view.
SWEDEN FLASH Q1 GDP +1.1% Y/Y (MNI)
SWEDEN MAR RETAIL SALES +3.6% Y/Y (MNI)
FOREX: Greenback Firmer as Trump Team Look to Shift Focus to Taxes
- The greenback is firmer, reversing a small part of the minor losses posted into the Monday close. Flow remains a key driver for currency markets here, with price action yesterday consistent with flow drivers marked by month-end value date on Monday. Most corporate and rebalancing flow models point to USD buying for the end of April, which may be showing through in the price action so far Tuesday, given the minimal headline flow.
- Trump's schedule is pretty contained Tuesday, keeping focus on any reports concerning the progress of trade deals - as cabinet members continue to talk up the prospects of deals with Asian nations - and in particular India - which could be the first agreements to cross the line and avoid a return of sky-high tariffs.
- Treasury Secretary Bessent - seen as the most market-friendly member of Trump's cabinet met yesterday with several senior members of Trump's economic team to make the passage of tax legislation a top priority for the party. The meeting set July 4th as a key date going forward, the date by which the team look to achieve the tax overhaul and reset the public's view that this administration has a poor grasp on the economy.
- The USD is firmer against all others in G10, but CAD also trades well following the election results that show Carney's Liberals extending their time in office. EUR/CAD is holding below the 1.5800 handle, keeping the shallow bounce theme and raising the importance of 1.5668 support ahead.
- Event risk picks up Tuesday with the publication of April economic confidence data from the Eurozone and the advance trade balance release, JOLTS job openings for March and the latest consumer confidence data from the US. Central bank speak is still contained as the Fed remain inside their pre-meeting media blackout period. ECB's Villeroy and BoE's Ramsden are set to speak, however.
EGBS: Bund Futures Biased Slightly Higher But Key Resistance Remains Intact
Bund futures are +5 ticks at 131.32, with a downtick in oil prices and soft regional growth signals offset by a rise in spot/expected inflationary pressures. Kremlin suggestions that a 30-day truce with Ukraine is “impossible without solving all issues” provided only fleeting risk off flows into EGBs.
- Topside attention in Bund futures remains on 132.03, the Apr 7 high and bull trigger. Meanwhile the 20-day EMA at 130.70 provides support. German yields are 2-3bps lower across the curve.
- Spanish HICP inflation was 2.2% Y/Y (vs 2.0% cons, 2.2% prior), while 1/3-year ECB consumer inflation expectations also came in above consensus. However, this was offset by a weaker-than-expected Spanish Q1 GDP reading and a soft EC Economic Sentiment survey.
- Private sector lending growth continued its steady acceleration in March, rising two tenths to 2.6% Y/Y or three tenths to 2.0% Y/Y when adjusting for sales & securitisations (highest since Jun 2023).
- On the supply front, Finland and France are holding syndications while Italy has held a 5/10-year BTP and CCTeu auction.
- ECB’s Cipollone struck a characteristically dovish tone, warning of the downside growth risks related to US tariffs.
- 10-year EGB spreads to Bunds are within 0.5bps of yesterday’s closing levels. Following yesterday’s national outages, Spain and Portugal’s power systems are now back to normal.
- Tomorrow’s regional data calendar is equally heavy, with flash Q1 GDP and April inflation data due from Germany, France and Italy.
GILTS: Light Rally as Oil Softens
Gilt futures continue to oscillate within yesterday’s range, yields 1.5-2.5bp lower, light curve steepening. Moves aided by lower oil prices.
- Futures last ~93.20. Initial support and resistance located at 92.20/93.34, recent bullish technical theme remains intact.
- BoE-dated OIS little across contracts covering ’25 meetings.
- ~90bp of cuts still priced through year-end, a little less dovish than April’s extreme of ~97bp.
- The next 25bp cut is still fully discounted come the end of the May MPC.
- SONIA futures 0.5-2.0 higher, contracts remain below April highs.
- BoE Deputy Governor Ramsden will speak shortly (10:40 BST), although he seems unlikely to comment on monetary policy matters as he will give the keynote speech on payments innovation at the Innovate Finance Global Summit.
- That should leave macro cues at the fore, with continued focus on tariffs and the global trade backdrop. U.S. data, in the form of JOLTS and consumer confidence, is also eyed.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
May-25 | 4.205 | -25.4 |
Jun-25 | 4.070 | -39.0 |
Aug-25 | 3.864 | -59.6 |
Sep-25 | 3.750 | -70.9 |
Nov-25 | 3.606 | -85.3 |
Dec-25 | 3.555 | -90.4 |
EQUITIES: Eurostoxx 50 Futures Maintain a Positive Tone
Eurostoxx 50 futures maintain a positive tone and are holding on to their recent gains. The contract has cleared the 20-day EMA and pierced the 50-day EMA, at 5101.76. A clear break of this average would strengthen the current bull cycle and signal scope for a continuation of the corrective uptrend. This would open 5165.00 next, the Apr 3 high. Support to watch lies at 4812.00, the Apr 16 low. Clearance of this level would highlight a reversal. The corrective bull cycle in S&P E-Minis that started on Apr 7, remains in play. The contract has breached a number of important short-term resistance points. Price has cleared the 20-day EMA and pierced 5528.75, the Apr 10 high. The next key resistance is 5619.66, the 50-day EMA. A clear breach of this EMA would strengthen a bull theme. Initial key support lies at 5127.25, the Apr 21 low. A break would be bearish.
- In China the SHANGHAI closed lower by 1.76 pts or -0.05% at 3286.655 and the HANG SENG ended 36.15 pts higher or +0.16% at 22008.11.
- Across Europe, Germany's DAX trades higher by 120.72 pts or +0.54% at 22386.98, FTSE 100 lower by 2.14 pts or -0.03% at 8417.02, CAC 40 down 7.59 pts or -0.1% at 7575.72 and Euro Stoxx 50 down 3.27 pts or -0.06% at 5170.64.
- Dow Jones mini up 77 pts or +0.19% at 40409, S&P 500 mini up 11.5 pts or +0.21% at 5558.5, NASDAQ mini up 46.75 pts or +0.24% at 19550.75.
Time: 09:50 BST
COMMODITIES: Medium-Term Bearish Theme in WTI Futures Remains Intact
A medium-term bearish theme in WTI futures remains intact and the recovery that started on Apr 9 appears corrective. The move higher has allowed an oversold trend condition to unwind. Recent weakness resulted in the breach of a number of important support levels, reinforcing a bearish threat. A clear resumption of the bear cycle would open $53.72, a Fibonacci projection. Resistance to watch is $65.59, the 50-day EMA. Gold continues to trade below its recent highs. The trend needle points north and the latest move down appears corrective. The retracement has allowed an overbought condition to unwind. Moving average studies are unchanged, they remain in a bull-mode position highlighting a dominant uptrend. The next objective is $3547.9, a Fibonacci projection. Initial firm support to watch lies at 3231.3, the 20-day EMA.
- WTI Crude down $0.72 or -1.16% at $61.46
- Natural Gas down $0 or -0.12% at $3.333
- Gold spot down $28.82 or -0.86% at $3320.55
- Copper up $2.75 or +0.56% at $490.7
- Silver up $0.06 or +0.18% at $33.2441
- Platinum up $0.03 or +0% at $991.87
Time: 09:50 BST
| Date | GMT/Local | Impact | Country | Event |
| 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 |
| 30/04/2025 | 1400/1000 | ** | US | NAR Pending Home Sales |
| 30/04/2025 | 1400/1000 | *** | US | Personal Income and Consumption |
| 30/04/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 30/04/2025 | 1530/1630 | GB | BOE Lombardelli At New Economics Teacher Training Launch | |
| 30/04/2025 | 1730/1330 | CA | BOC Meeting Minutes |
