MNI US OPEN - China Again Denies Being in Trade Talks With US
EXECUTIVE SUMMARY
- RUBIO SAYS TRUMP WILL DECIDE THIS WEEK ON CONTINUING UKRAINE WAR TALKS
- CHINA VOWS TO AID EXPORTERS, DENIES BEING IN TRADE TALKS WITH US
- INDIA SEEMS TO BE BUILDING ITS CASE FOR STRIKING PAKISTAN
- CHINA’S HUAWEI DEVELOPS NEW AI CHIP, SEEKING TO MATCH NVIDIA
- PBOC’S ZOU SAYS RRR AND INTEREST RATE CUT EXPECTED
Figure 1: US Earnings Calendar (S&P 500) - W/C Apr 28 - 39% of index due to report
Source: MNI
NEWS
MNI US EARNINGS SCHEDULE: Microsoft, Meta, Amazon and Apple Earnings All Due Later This Week
Earnings from Microsoft, Meta Platforms, Amazon and Apple are all due this week - covering a large swathe of the Magnificent Seven megacaps. See the full schedule in the link above.
US/RUSSIA/UKRAINE (NYT): Rubio Says Trump Will Decide This Week on Continuing Ukraine War Talks
Secretary of State Marco Rubio said Sunday that the Trump administration will decide this week whether to continue pursuing a negotiated settlement in Russia’s invasion of Ukraine or to turn its attention to other matters. This week will be “very important,” Mr. Rubio said on the NBC’s “Meet the Press.” “We have to make a determination about whether this is an endeavor that we want to continue to be involved in or if it’s time to sort of focus on some other issues that are equally if not more important in some cases.”
ISRAEL/MIDEAST (BBG): Israel Army Strikes Hezbollah Missile Storage in Beirut’s Suburb
Israel carried out an airstrike in a Beirut suburb targeting a Hezbollah precision missile storage facility, as the Jewish state continued to attack sites related to the militant group in the southern part of the Lebanese capital despite a ceasefire agreement. The facility posed a “significant threat” to Israel, which won’t allow Iran-backed Hezbollah to regroup following a war that lasted more than a year, according to a joint statement issued by Israeli Prime Minister Benjamin Netanyahu’s office and the defense ministry.
INDIA/PAKISTAN (NYT): India Seems to Be Building Its Case for Striking Pakistan
Since the horrific terrorist attack in Kashmir last week, the Indian prime minister, Narendra Modi, has spoken on the phone with more than a dozen world leaders. Diplomats from 100 missions in India’s capital have filed into the foreign ministry for briefings, officials said. But the effort is largely not about rallying help to de-escalate India’s dangerous face-off with Pakistan, which it accuses of having “linkages” to the attack. Instead, according to four diplomatic officials aware of the discussions, New Delhi appears to be building a case for military action against its neighbor and archenemy.
RUSSIA/N.KOREA (BBG): North Korea Admits Sending Troops to Aid Russian War on Kyiv
North Korea acknowledged for the first time that it deployed troops to support Russia’s war on Ukraine, claiming the country’s military had helped Moscow retake control of the border region of Kursk. North Korean leader Kim Jong Un decided to participate in the conflict to liberate the Kursk region and to repel the “adventurous invasion” of Russia by the Ukrainian army in an operation that has been “victoriously concluded,” the official Korean Central News Agency said Monday, citing North Korea’s Central Military Commission.
US/CHINA (BBG): China Vows to Aid Exporters, Denies Being in Trade Talks With US
Chinese officials vowed to provide more support for exporters affected by US President Donald Trump’s tariffs, showing greater urgency to shore up the crucial sector while denying having had any trade talks with Washington. Policymakers in Beijing on Monday laid out policies to aid exporting companies, including plans to ensure troubled firms get the loans they need and boost domestic consumption to absorb the blow of US levies. Hours later, the Chinese Foreign Ministry again denied the world’s two largest economies were discussing tariffs.
US/CHINA (WSJ): China’s Huawei Develops New AI Chip, Seeking to Match Nvidia
Huawei Technologies is gearing up to test its newest and most powerful artificial-intelligence processor, which the company hopes could replace some higher-end products of U.S. chip giant Nvidia. The steady advance by one of China’s flagship technology companies points to the resilience of the country’s semiconductor industry despite efforts by Washington to stymie it, including by cutting off access to some Western chip-making equipment.
US/CHINA (FT): Demand Slump Fuelled by Trump Tariffs Hits Us Ports and Air Freight
Donald Trump’s trade war with Beijing is starting to affect the wider US economy as container port operators and air freight managers report sharp declines in goods transported from China. Logistics groups said container bookings to the US have fallen sharply since the introduction of 145 per cent tariffs on Chinese imports to the US. The Port of Los Angeles, the main route of entry for goods from China, expects scheduled arrivals in the week starting May 4 to be a third lower than a year before, while airfreight handlers have also reported sharp falls in bookings.
US.S.KOREA (BBG): South Korea Rules Out Chance of US Trade Deal Before June Vote
South Korea sees no chance of clinching a comprehensive trade agreement with the US before a presidential election on June 3, Vice Industry Minister Park Sung-taek said Monday, citing the complexity of the issues involved and political uncertainties. Seoul will send a delegation to Washington this week for working-level talks to follow up on last week’s progress, but agreeing to any package of measures before early June is “theoretically impossible,” Park said.
CANADA (MNI): Carney Likens US Tariffs to Brexit on Election Eve
Mark Carney stressed ahead of Monday's election that he will assert Canada's economic power in trade talks with U.S. President Donald Trump, who the former Bank of England and Bank of Canada Governor said is pushing the U.S. into a Brexit-style economic setback. “When you break off or substantially rupture trading relationships… you end up with slower growth, higher inflation, higher interest rates, volatility, weaker currency, a weaker economy. And we’re in the early stages of that in the U.S.,” Carney said at a weekend campaign rally north of Toronto.
ECB (MNI): ECB's Villeroy Still Sees Margin for Gradual Cuts
The ECB still has a margin to lower interest rates gradually thanks to the fall in inflation towards its 2% target, Bank of France Governor Francois Villeroy said Monday. Speaking on RTL Radio, Villeroy noted the ECB's inflation target was 2%, adding "We are almost there, we are at 2.2%. We should achieve this objective and this means one important thing, which is that we still have a gradual margin for interest rate reductions."
ECB (BBG): ECB June Meeting Will Be ‘Really Complicated,’ Knot Tells FD
US tariff policy coupled with European fiscal plans casts uncertainty over the European Central Bank’s next rate decision, according to Governing Council member Klaas Knot. “In the short term, it is 100% certain that the demand shock will dominate — so in the short term, inflation will go down,” the Dutch central banker told FD in an interview published Sunday. “But at the ECB, we focus on inflation in the medium term.”
UK (Telegraph): Starmer Plans Migrant Cuts to Fight Reform
Sir Keir Starmer will unveil a crackdown on immigration after this week’s local elections where Reform is expected to seize hundreds of seats. A white paper revealing the Government’s plans to bring down legal migration is due to be unveiled in the weeks following the voting on May 1. It is expected to make it harder for foreign students who come to the UK on graduate visas to stay in the country through taking low-paid jobs such as healthcare roles. Reform, the Right-wing party led by Nigel Farage, is expected to take hundreds of council seats on Thursday and is ahead in the race for two mayoralties.
UK/EU (FT): UK-EU May Summit Could Lay Ground for Review of Post-brexit Deal, Says German Ambassador
Germany’s ambassador to the UK has expressed hopes that next month’s EU-UK summit will be just the start of a warming of relations and could lay fertile ground for a future review of Boris Johnson’s post-Brexit deal. Miguel Berger said that while much depended on the “level of ambition of the British government”, the EU would be open to discussing options when former prime minister Johnson’s Trade and Cooperation Agreement comes up for a scheduled five-year review in 2026.
GERMANY (MNI): CDU Unveils Ministerial Slate Ahead of Internal Vote on Coalition Deal
Tom Nuttall at The Economist posts on X: "Confirmed by the CDU: [Johann Wadephul] will be Germany's next foreign minister; Katherina Reiche the economy minister. [Thorsten Frei] cements his position as Merz's most important lieutenant by taking over as chancellery head. SPD ministers will be announced after Wednesday." RTRS: "A former lawmaker, Reiche has been CEO of regional energy infrastructure firm Westenergie - a division of E.ON, Europe's largest operator of power grids -- since early 2020. Reiche, 51, served as a member of Germany's parliament from 1998 until 2015 and held roles as parliamentary secretary at the environment and transport ministries."
CHINA (MNI): RRR and Interest Rate Cut Expected - PBOC's Zou
MNI (Beijing) The People’s Bank of China will cut the reserve requirement ratio and the interest rate in a timely manner and ensure ample liquidity in the banking system, while introducing instruments to support key sectors to boost the economy amid tariff tensions with the U.S., PBOC Deputy Governor Zou Lan told reporters on Monday in a briefing.
CHINA (MNI): Limited UST Impact, Yuan Remains Stable - PBOC's Zou
MNI (Sydney) Recent U.S treasury and dollar exchange-rate volatility has had a limited impact on China’s FX reserves, and the People’s Bank of China will continue to ensure yuan stablility against external shocks, PBOC Deputy Governor Zou Lan told reporters on Monday in a briefing. China's diverse foreign exchange reserves have limited the impact of fluctuations in any “single-market or single-asset exposures," said Zou, accusing the U.S.'s tariffs of disrupting the global economic order and triggering global asset portfolios to undergo cross-regional reallocation.
CHINA (MNI): China Can Meet Goals Despite Uncertainty - NDRC
MNI (Beijing) China is confident it can achieve this year’s development goals no matter how the international situation changes, Zhao Chenxin, vice chairman of the National Development and Reform Commission, told reporters on Monday, when asked if the country can meet its 5% GDP growth target in 2025. Zhao said the government will take steps to consolidate the economic recovery further and that the impact of external shocks had increased. “We still have abundant policy reserves and sufficient space,” Zhao said, adding that the government will accelerate measures to stabilise employment and promote consumption.
JAPAN (BBG): Japanese Stocks Get a Tailwind From Tax-Cut Proposals
Japanese equities are likely to benefit as the main opposition party puts tax reductions on the agenda leading into July’s upper house elections. With the ruling LDP eager to bounce back from last October’s election when it lost its outright majority, the increased potential for a lower consumption levy on food means investors will bid up share prices as they anticipate an overall boost in spending from households later this year. Japan has a 10% consumption tax, which is reduced to 8% for food products, and the Constitutional Democratic Party has proposed eliminating levies on food. Households spend ~30% on food so tax cuts there could free up funds for spending elsewhere.
AUSTRALIA (MNI): Polls In Line With 2022 Election Signalling a Return of Labor
The polls in the second half of April have been fairly steady with the average 2-party preferred estimated at 52.5% to 47.5% where it has been through the election campaign and close to the May 2022 result. If the surveys have accurately gauged voting intentions, then the incumbent centre-left Labor government (ALP) may retain a small majority but given that there is unlikely to be a uniform swing given the strength of local issues this time, it could easily find itself with a minority.
RATINGS: Affirmations & Outlook Tweaks on Friday
Rating reviews of note from after hours on Friday include:
- S&P affirmed Belgium at AA; Outlook revised to Negative
- S&P affirmed Slovakia at A+; Outlook revised to Negative
- S&P affirmed Turkey at BB-; Outlook Stable
- Morningstar DBRS assigned A rating to Croatia, Stable Trend
- Morningstar DBRS assigned AA rating to Czech Republic, Stable Trend
- Morningstar DBRS confirmed the European Union at AAA, Stable Trend
- Scope Ratings affirmed Luxembourg at AAA, Outlook Stable
FOREX: USD Furtively Firmer in Low Conviction Morning
- The dollar is furtively firmer, but markets trade with little conviction early Monday having digested comments from US Treasury Secretary Bessent over the weekend. Bessent talked up the progress of trade talks and negotiations with other parties after a meeting with his Japanese counterpart today - and stated that "some talks are moving well, especially with Asia".
- Equity futures are firmer across Europe, but lag somewhat in the US ahead of a busy earnings week. Earnings from Microsoft, Meta Platforms, Amazon and Apple are all due - covering a large swathe of the Magnificent Seven megacaps.
- Across G10, GBP trades well, gaining moderately against all others. Nonetheless, GBP/USD remains below last week's highs - which mark first resistance at 1.3349. Clearance above here opens more challenging levels at the cycle high of 1.3424 posted on the last USD slide. UK data is few and far between this week, however local election results on Thursday will provide the latest insight into how Starmer's government is performing inside the first year.
- It's a quiet data session to begin the week, with risk events and releases picking up across the week - culminating in MNI Chicago PMI on Wednesday, and the Payrolls report following on Friday. The Fed remain inside their pre-meeting media blackout, meaning central bank speak should be muted into next week's decision. ECB's Rehn and de Guindos are set to appear.
EGBS: Bunds Soften Amid More Sanguine Risk Backdrop
Bund futures are -36 ticks at 131.23, with global risk sentiment exhibiting a more sanguine tone this morning ahead of a heavy data schedule later this week. Futures are in consolidation mode and continue to trade just below their recent highs, with the 20-day EMA at 130.64 providing initial support. On the topside, focus remains on 132.03, the April 7 high and the bull trigger.
- The German curve has lightly steepened, with 30-year yields up 5bps and 5s30s +1.7bps at 88.7bps, still some way off the April 9 multi-year high of 96.5bps.
- This morning, the EU held its first ever triple-line EU-bond auction, with E5.056bln of 5/10/15-year EU-bonds sold. Meanwhile, Belgium will sell E2.8-3.2bln of OLOs at 1100BST.
- 10-year EGB spreads to Bunds are up to 1.2bps wider on the session.
- ECB’s Rehn and De Guindos are scheduled to speak at 1400BST today.
- This week’s heavy Eurozone data calendar includes flash inflation prints for April and a first look at Q1 GDP across member states. MNI’s inflation preview will be released this afternoon.
GILTS: Resistance Holds, Yields a Little Higher on Trade Outlook
Gilt futures continue to trade below Friday’s highs, after U.S. Treasury Secretary Bessent pointed to progress on trade deals, particularly with Asia, helping boost European equities.
- Futures trade in a 93.03-33 range.
- The recent bullish technical theme remains intact. Initial resistance located at Friday’s high (93.34), follow by a Fibonacci retracement level at 93.44.
- Initial support still located at the 20-day EMA (92.22 today).
- Yields little changed to 2bp higher, curve now steepening after flattening in early trade.
- Initial yield support in 10s located at 4.460% today (which also equates to that 93.44 Fibonacci level in futures).
- Final manufacturing PMI data (Thursday) headlines a limited domestic data calendar this week.
- BoEspeak from Ramsden (Tuesday) & Lombardelli (Wednesday) will also be eyed.
- BoE-dated OIS still fully discounting the next 25bp cut in May and showing ~90bp of cuts through year-end.
- On the supply front, the DMO will come to market with 30-Year (Tuesday) & 3-Year (Wednesday) paper this week.
- Elsewhere, the BoE will sell GBP750mln of short maturity gilts from the APF this afternoon.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
May-25 | 4.204 | -25.5 |
Jun-25 | 4.073 | -38.7 |
Aug-25 | 3.869 | -59.0 |
Sep-25 | 3.759 | -70.0 |
Nov-25 | 3.616 | -84.3 |
Dec-25 | 3.563 | -89.6 |
EQUITIES: Corrective Bull Cycle in E-Mini S&P Remains in Play
Eurostoxx 50 futures are holding on to their recent gains. The contract has cleared the 20-day EMA and pierced resistance at the 50-day EMA, at 5101.10. 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. On the downside, 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 traded higher last week and 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 5622.38, 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.
- Japan's NIKKEI closed higher by 134.25 pts or +0.38% at 35839.99 and the TOPIX ended 22.58 pts higher or +0.86% at 2650.61.
- Elsewhere, in China the SHANGHAI closed lower by 6.645 pts or -0.2% at 3288.415 and the HANG SENG ended 8.78 pts lower or -0.04% at 21971.96.
- Across Europe, Germany's DAX trades higher by 90.52 pts or +0.41% at 22333.85, FTSE 100 higher by 30.81 pts or +0.37% at 8446.66, CAC 40 up 43.68 pts or +0.58% at 7579.94 and Euro Stoxx 50 up 24.1 pts or +0.47% at 5178.22.
- Dow Jones mini down 43 pts or -0.11% at 40210, S&P 500 mini down 13 pts or -0.23% at 5537, NASDAQ mini down 47 pts or -0.24% at 19488.75.
Time: 10:05 BST
COMMODITIES: Gold Continues to Trade Below Latest Record Highs
A 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 resumption of the bear cycle would open $53.72, a Fibonacci projection. Resistance to watch is $65.73, 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 is allowing 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 3219.4, the 20-day EMA.
- WTI Crude down $0.12 or -0.19% at $62.9
- Natural Gas up $0.01 or +0.44% at $2.95
- Gold spot down $34.02 or -1.02% at $3286.43
- Copper down $2.35 or -0.48% at $487.1
- Silver down $0.15 or -0.44% at $32.9734
- Platinum up $6.86 or +0.7% at $983.66
Time: 10:05 BST
| Date | GMT/Local | Impact | Country | Event |
| 28/04/2025 | 1300/1500 |  EU | ECB's de Guindos Presenting 2024 Annual Report | |
| 28/04/2025 | 1400/1000 | ** |  US | housing vacancies |
| 28/04/2025 | 1430/1030 | ** | US | Dallas Fed manufacturing survey |
| 28/04/2025 | 1530/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 28/04/2025 | 1530/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 29/04/2025 | 2301/0001 | * |  GB | BRC Monthly Shop Price Index |
| 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 |
