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Market Quick Take – 29 April 2025
Market drivers and catalysts
- Equities: Big Tech earnings in focus; tariffs weigh; Porsche cuts outlook
- Volatility: VIX stable; VIX1D falls; option volumes high beyond TSLA/NVDA
- Digital Assets: BTC steady after surge; IBIT sees $971M inflows; ETH whale buying
- Currencies: USD rebounds overnight after selling pressure yesterday, though USDJPY remains lower than yesterday on drop in US yields
- Fixed Income: US treasury yields drop all along the curve yesterday and overnight
- Commodities: Yesterday’s gold rebound partially erased, crude oil trades heavily
- Macro events: US March Trade Balance, March JOLTS Job Openings and April Consumer Confidence
Macro data and headlines
- Canada's Liberal Party, led by Mark Carney, is projected to win a fourth but narrow consecutive election, a major turnaround for a party that seemed on track for an election drubbing just four months ago, before repeated Trump attack changed the focus among voters. Carney's party is expected to fall short of the 172 seats needed for a majority in the House of Commons and will need to work with other parties to pass legislation.
- US Treasury Secretary Bessent urged China to de-escalate, stating that 145% tariffs are unsustainable and he prefers not to use prepared measures. He noted Chinese exemptions suggest a desire for trade de-escalation and mentioned 15-18 key trade negotiations, including with China, where good proposals have been made, though China's situation is complex, according to CNBC. He also stated that he has an “escalation ladder in his back pocket”, which are export embargoes on the US goods that China has announced tariff carveouts on, though he hopes that he doesn’t have to use them.
- A WSJ exclusive late yesterday suggested that the Trump administration is looking at not “stacking” US tariffs on imported cars and auto parts, in other words, not adding the 25% tariffs to other tariffs against a country.
- The April Dallas Fed’s business activity index for Texas manufacturing fell 19.5 points to -35.8, it's lowest since May 2020. Production decreased to 5.1, new orders to -20.0, shipments to -5.5, and capacity utilization to -3.8. The company outlook index dropped to -28.3, while uncertainty rose to 47.1.
- In April 2025, the CBI's UK retail sales gauge rose to -8, it's highest in six months, exceeding expectations and improving from -41 in March. However, the May outlook dropped to -33, the lowest in over a year. Despite slower declines, firms are concerned about weak consumer sentiment and global uncertainty. Retailers urge government action to boost confidence, as no sales recovery is expected.
- Mexico's trade surplus rose to $3.44 billion, surpassing expectations. Exports increased by 9.6% to $55.5 billion, driven by accelerated shipments ahead of US tariffs. Non-oil exports grew 9.7%, with notable rises in mining products (+34.1%), manufactured goods (+10%), and machinery (+50.2%). Car exports were up 6.2%, with US sales increasing 6.5% and other markets 4.0%
- Spain and Portugal are recovering from a major blackout, with Spain's power nearly fully restored and urban trains running again. The cause remains unknown, though PM Pedro Sanchez said 15 gigawatts vanished from the grid for five seconds. The incident raises concerns about Spain’s increasingly renewable-dependent grid and its economic impact.
Macro calendar highlights (times in GMT)
0900 – Eurozone April Consumer Confidence
1230 – US March Trade Balance
1400 – US March JOLTS Job Openings
1400 – US April Consumer Confidence
Earnings events
Equities
- US: US stocks closed mixed on Monday as investors braced for a heavy earnings week. The S&P 500 edged up 0.06%, while the Dow Jones gained 0.28%, marking their fifth consecutive gain. Nasdaq slipped 0.1%, dragged by Nvidia (-2.1%) on Huawei AI chip news. Utilities led sector gains; tech lagged. US futures were flat early Tuesday as markets awaited key earnings from Meta, Microsoft, Amazon, and Apple. Meanwhile, Treasury Secretary Bessent stressed it was "up to China" to ease trade tensions. Economic data today includes consumer confidence and job openings.
- Europe: European equities ended higher Monday, with the Stoxx 600 up 0.5% and DAX +0.06%, driven by broad sector gains. Investors digested corporate earnings and trade risks. Mediobanca launched a €6.3B bid for Banca Generali (+7.5%), while Airbus (+1.8%) secured Spirit AeroSystems assets. On Tuesday, European markets opened cautiously amid earnings from HSBC, Deutsche Bank, Porsche, and others. ECB Vice President de Guindos warned of increasing trade-related risks. Porsche cut its 2025 forecast, citing US tariffs and China weakness.
- UK: The FTSE 100 advanced slightly on Monday, rising 0.02% to extend its winning streak to 11 sessions. HSBC reported a 25% profit fall but announced a $3B buyback. Deliveroo jumped 17% on a takeover approach from DoorDash. The focus now shifts to upcoming earnings from BP, AstraZeneca, and Lloyds. Meanwhile, British food inflation hit a near one-year high, highlighting economic pressure ahead of June’s budget plans.
- Asia: Asia traded mixed amid a Japanese holiday closure. Hong Kong's Hang Seng gained 0.6%, led by tech and autos as the US softened certain auto tariffs. Chinese equities slipped as Beijing refrained from announcing new stimulus despite vowing contingency support. South Korea’s KOSPI rose 0.8%, and Australia's ASX 200 added 0.9%. Markets are closely watching China's manufacturing data tomorrow and the Bank of Japan's policy update.
Volatility
Volatility remained contained Monday. The VIX rose slightly to 25.15 (+1.25%), mirroring the late recovery in US equities. Short-term VIX1D dropped sharply (-9.45%), reflecting a calming of immediate risks. 442,676 VIX options traded, with 80% of volume in calls. Options flow showed heavy activity beyond Tesla and Nvidia: Palantir, Sofi, and Intel also featured prominently as traders positioned for earnings and tariff uncertainty. Today’s consumer confidence and JOLTS data could stir further moves.
Digital Assets
Crypto markets edged lower after Monday’s rebound. Bitcoin fell -0.61% to $94,461, and Ethereum dropped -0.09% to $1,798. Solana and XRP also declined. Despite price dips, institutional flows remained strong: BlackRock’s IBIT saw $971M in inflows, its second-largest day ever. Ethereum ETFs recorded their first net inflows in eight weeks, signaling renewed whale accumulation. Crypto-exposed stocks like Coinbase (-2.08%) and Marathon (-2.03%) mirrored broader weakness.
Fixed Income
- US Treasuries were heavily bid yesterday, taking US yields to new local lows all along the curve as the market priced in more Fed rate easing and the 10-year Treasury benchmark extended yesterday’s drop and hit a more than two-week low overnight near 4.20%, versus a 4.31% close on Friday.
- In contrast to the action in the US yesterday, German 10-year Bunds rose about 5 basis points to rebound above the 2.50% level, ending the day at 2.52%, the highest daily close in more than a week as new German Chancellor Friedrich Merz’ cabinet takes shape.
Commodities
- Gold pushed higher on Monday as the US dollar and bond yields fell on weak activity data from the Dallas Fed, and as the trade war with China showed no signs of easing, only to suffer a fresh setback overnight towards USD 3,300, potentially signalling the Asian demand engine is also sputtering for now, potentially signalling a period of consolidation.
- Crude prices' latest recovery attempt proved short-lived with the combination of strong resistance above, the global trade war hurting demand, and OPEC+ plans to increase production all driving fresh selling activity. This is despite widening prompt spreads indicating a still-tight market. With the month-end approaching, Brent is on track for its worst monthly loss since 2021, with a focus on trade news and incoming US economic data.
- Copper trades stable following a three-week gain, driven by renewed widening of the premium in New York over London ahead of tariffs, a development commodities trading house Mercuria calls "one of the greatest tightening shocks" in its history, as increased shipments from Asia to the US have driven down China’s stockpiles at a time of robust demand towards the energy transition.
Currencies
- The US dollar sold off yesterday but recovered in places overnight, although the move lower in USDJPY yesterday held up better than other negative USD moves as US yields dropped sharply all along the US yield curve. USDJPY traded near 142.50 this morning after a 140.00 low overnight, while AUDUSD traded near 0.6415 after a rush to a new four month high above local resistance at 0.6439 was rejected.
- The Canadian dollar reversed yesterday’s strength against the US dollar as election votes were tallied and Carney is set to emerge victorious, setting up an interesting political clash with the US from here as the sudden revival of Carney’s (formerly PM Justin Trudeau’s) Liberal Party was linked to US President Trump antagonism and suggestion that Canada become the 51st US state.
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