CHINA: Stocks Slip as China Restrict US Investments
Apr-02 10:22
China are reportedly restricting companies from investing in the US - potentially giving Beijing more flexibility in future negotiations, according to Bloomberg. The headlines prompt a new daily low in the e-mini S&P at 5640.75.
- Chinese investment headed to the US was already tilting lower through the election (data shows Chinese investment into the US was just $191mln in Q4 2024) - but this would represent an acceleration of that trend. The move would also limit Chinese firms' ability to skirt sanctions pressure by re-shoring manufacturing into the US, potentially hindering one of Trump's main policy objectives with tariffs.
- Modest bid in bonds alongside the headline, but yesterday’s highs remain untested across TY, Bund & gilt futures.
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EQUITIES: A new 14yrs high for the EU Bank Index
Mar-03 10:18
- The bounce off the lows in Equity futures is helping the Bank Index {SX7E Index} through the February high.
- Next upside target is up to 197.88, this was the 2011 high.
(Chart source: MNI/Bloomberg).
FOREX: Dollar Drifting Ahead of Revived Tariff Deadline
Mar-03 10:10
- EUR/USD edges to a new intraday high on the back of that EZ HICP print, but the pair was bid into the release already, with the USD further softer against all others in G10. EUR/JPY also trades well through the release, briefly showing above the Friday high.
- The impact has spilled over into new intraday highs for GBP/USD, which accelerates on the break of last Friday's high at 1.2622, but the mid-week highs and major resistance are still out of reach for now at 1.2716.
- No specific headlines or newsflow behind the USD drift, but markets likely well aware of the looming deadline for Canada/Mexico/China tariffs - due Tuesday at 0501GMT/0001ET - meaning markets will be on watch today for any signals of a last-minute extension, as was the case in February.
- Outside of Monday trade, the week is fraught with event risk - Tuesday marks the final deadline for additional trade levies on Canada, Mexico and China. The additional tariffs kick in at 0501GMT/0001ET on Tuesday - meaning markets will be on watch today for any signals of a last-minute extension, as was the case in February.
- ISM Manufacturing data for February is the data highlight, with sentiment in the spotlight this month thanks to growing signals in regional Fed releases that businesses are increasingly uncertain over tariffs and price pressures. Friday's MNI Chicago Business Barometer showed prices paid lurching higher, marking the largest one-month increase since July 1957.
USD: EURIBOR FIX - 03/03/25
Mar-03 10:03
EURIBOR FIX - EMMI/Bloomberg
- EUR001W 2.6220 0.0150
- EUR001M 2.4660 0.0030
- EUR003M 2.4640 0.0000
- EUR006M 2.3310 -0.0240
- EUR012M 2.3650 -0.0290
