Market Quick Take – 23 April 2025

Market drivers and catalysts

• Equities: US-China trade optimism; Powell stays; Tesla, 3M rise; industrials hit by tariffs
• Volatility: VIX sharply down; reduced trade war fears; focus on corporate earnings and PMI data
• Digital Assets: BTC stable; ETH and crypto stocks rally; Strategy’s large BTC purchase boosts sentiment
• Currencies: US dollar rebounds sharply on Trump rhetorical shift on tariffs, Fed interference
• Fixed Income: US 10-year yields down, 2-year yields down on Trump change of tone
• Commodities: Gold slumps as Trump eases tensions; data shows healthy oil demand, and copper sees strong rebound
• Macro events: Flash April PMI for Europe and US, US Mar. New Home Sales, US Fed Beige Book

Macro data and headlines

• Bloomberg reported that US Treasury Secretary Bessent expects de-escalation in the China tariff standoff, though FBN's Gasparino suggested his comments were overstated, though later US President Trump himself said that US tariffs on China will not stay at 145%. “It will come down substantially. It won’t be zero. It used to be zero.” Politico noted that the White House is close to trade deals with Japan and India, with details to be finalized later.
• Trump confirmed he won't remove Federal Reserve Chair Jerome Powell, easing investor concerns about central bank independence and policy stability.
• IMF warned that rising US tariffs are slowing global growth, reducing its 2024 forecast to 2.8%. The US will be heavily impacted, with 2025 growth cut to 1.8%. Mexico, China, and the Eurozone will also be affected.
• French president Macron floated the idea of new French legislative elections as early as this fall as his popularity has rebounded in the new geopolitical environment since US President Trump’s election and the prior French legislative election last summer

Macro calendar highlights (times in GMT)

0715 – France Flash Apr. PMI
0730 – Germany Flash Apr. PMI
0800 – Eurozone Flash Apr. PMI
1030 – UK Bank of England Chief Economist Pill to speak
1300-1335 – US Fed speakers
1345 – US Apr. Flash PMI
1400 – US Mar. New Home Sales
1700 – US Treasury 5-year auction
1715 – UK Bank of England Bailey to speak
1800 – US Fed Beige Book

Earnings events

• Today: Philip Morris, IBM, AT&T, Thermo Fisher Scientific, ServiceNow, Boston Scientific, NextEra Energy, Texas Instruments, Boeing, CME Group, GE Vernova, Lam Research, O’Reilly Automotive, Amphenol, General Dynamics, Chipotle Mexican Grill, Newmont, Volvo, Samsung Biologics, Waste Connections, Norfolk Southern
• Thursday: Google, Procter & Gamble, T-Mobile US, Merck, Pepsico, Gilead, Comcast, Fiserv, Chubb, Bristol-Myers Squibb, Intel, Republic Services, Southern Copper, Agnico Eagle Mines, Keurig Dr Pepper, Freeport McMoRan
• Friday: BYD, Abbvie, HCA Healthcare, Aon, Colgate Palmolive, Charter Communications, Schlumberger

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• US: US equities rallied sharply on optimism around easing US-China trade tensions and assurances from President Trump about Fed Chair Powell's continued tenure. The Dow surged 2.66%, S&P 500 gained 2.51%, and Nasdaq Composite rose 2.71%. Tesla jumped 5.1% despite missing earnings estimates, with investors encouraged by Musk's renewed focus on Tesla. 3M soared 8.1% after reaffirming guidance. Industrial stocks like Northrop Grumman (-12.7%) and RTX (-9.8%) plunged due to tariff impacts. Futures are up further as Trump's supportive comments buoyed market sentiment overnight.
• Europe: European markets reversed early losses, closing positively on Tuesday as global sentiment improved due to easing US-China trade tensions. Germany’s DAX rose 0.41%, France’s CAC 40 added 0.56%, and Eurozone’s STOXX 50 closed up 0.4%. L’Oréal surged 6.3% on strong sales, while auto stocks, including Mercedes-Benz and BMW, gained over 2%. Banks also advanced, though UniCredit dipped nearly 3%. Investors remain cautious ahead of Eurozone PMI data and corporate earnings releases later today.
• UK: The FTSE 100 closed higher by 0.68%, continuing a seven-day winning streak supported by retail and telecom stocks, with Bunzl (+3.6%) and Vodafone (+2.7%) leading gains. Miners also advanced, buoyed by improved global market sentiment. Conversely, DCC (-4.4%) fell after divesting its healthcare division. The market sentiment remains watchful amid trade war implications and UK's pending trade tariff discussions with the US.
• Asia: Asian markets broadly rose following Wall Street's strong overnight performance and optimistic signals from President Trump on reducing tariffs against China. Hong Kong's Hang Seng jumped 2.46%, reaching a near three-week high, driven by tech and consumer stocks. Japan’s Nikkei surged over 2%, bolstered by easing US-China trade tensions and strong private-sector growth. Mainland China indices remained relatively flat, cautious amid ongoing uncertainties around bilateral trade negotiations.

Volatility

Market volatility notably decreased as optimism grew around US-China tariff talks. The VIX fell sharply, closing at 30.57 (-9.61%), with overnight futures further declining as S&P 500 and Nasdaq futures rallied. Upcoming volatility drivers include corporate earnings from IBM, Boeing, and ServiceNow, as well as economic data on US Manufacturing and Services PMI later today.

Digital Assets

Bitcoin stabilized around $93,387, slightly off its earlier gains spurred by Michael Saylor’s Strategy's large Bitcoin purchase ($555 million). Ether advanced strongly, up 2.8% to $1,805. Crypto stocks surged with Coinbase (+8.6%), MARA (+14.4%), and CleanSpark (+17.4%) among the biggest gainers. Market sentiment in crypto remains cautiously optimistic, supported by institutional inflows and easing macroeconomic concerns.

Fixed Income

• Trump’s rhetorical thawing on tariffs against China and against Fed Chair Powell’s job status saw US short treasury yields rebound slightly, while the US 10-year treasury benchmark yield edged several basis points lower overnight after an unchanged close in yesterday’s session. The 10-year benchmark yield stood at 4.35% this morning and the 2-year at 3.82% as the market continues to price more than three Fed rate cuts this year, with slightly better than 50/50 odds that the next Fed cut comes at the June 18 FOMC meeting.
• The Bloomberg high yield corporate bond spread we track fell 15 basis points yesterday on the resurgence of risk appetite to 397 bps, a new two-week low and versus the recent cycle high of 454 bps on April 8.

Commodities

• Gold slumped 5% from Tuesday’s record peak at USD 3,500 before temporarily rebounding during the overnight session, once again confirming Asia as the current centre for gold demand. The selloff was triggered by several pushbacks from the US administration, ranging from Bessent seeing a de-escalation with China to Trump talking about lowering China tariffs substantially and not sacking Fed Chair Powell. Overall, gold was overbought and ripe for consolidation, which will now provide clues of underlying strength.
• Oil increased after Trump confirmed he wouldn't fire Fed Chair Powell, and after the API reported a 4.6m barrel drop in US crude stockpiles. Underlying demand remains healthy, with slowdown concerns yet to show up in the spot market, where the prompt spread in Brent has risen to a January high at USD 1 per barrel.
• Copper, especially in New York, continues to push higher with the COMEX contract approaching USD 5 per pound, less than two weeks after it slumped to near USD 4, supported by China-US trade optimism and a renewed tariff-related widening of the COMEX premium over London to 15%

Currencies

• The US dollar was resurgent late yesterday on Trump’s climbdown from any intent to fire Fed Chair Jay Powell or to maintain extremely high tariffs on China, but weakened again late in the Asian session. USDJPY traded as high as 143.22 before dropping back to 142.00 as of the late Asian session, while EURUSD trades as low as 1.1308 before rebounding to nearly 1.1400. The pattern was similar in other USD pairs, where the USD rally was largely reversed.
• The Japanese yen ended flat overnight in key non-USD crosses after a sell-off across the board, with EURJPY trading 161.65 in late trading in Tokyo after squeezing as high as 162.46 overnight and GBPJPY at 188.82 after nearly touching 190.00 in overnight trading.

For a global look at markets – go to Inspiration.