• US stocks declined and havens were bid as US-China trade tensions remained heightened with the tech sector the worst hit amid US export restrictions on certain NVIDIA and AMD chips to China, while nearly all sectors finished in the red aside from energy which benefitted from a rebound in oil prices. Nonetheless, equities were further pressured in late trade following comments from Fed Chair Powell who reaffirmed a wait-and-see approach and suggested incredibly high uncertainty.
• USD was pressured throughout the day and the DXY retreated back beneath the 100.00 level amid ongoing trade uncertainty and US-China frictions, while the latest data releases were mixed and there was also a mixed reaction in the dollar to comments from Fed Chair Powell who maintained a wait-and-see approach, putting off the recently founded optimism related to Waller who favours cuts sooner than previously thought given the tariff environment.
• Looking ahead, highlights include New Zealand CPI, Japanese Trade Data, Singapore Non-Oil Exports, Australian Jobs Data & NAB Quarterly Business Confidence, BoK Rate Decision, Speakers including Fed's Schmid, BoK Governor Rhee & BoJ’s Nakagawa, Supply from Australia.

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LOOKING AHEAD

• Highlights include New Zealand CPI, Japanese Trade Data, Singapore Non-Oil Exports, Australian Jobs Data & NAB Quarterly Business Confidence, BoK Rate Decision, Speakers including Fed's Schmid, BoK Governor Rhee & BoJ Nakagawa, Supply from Australia.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks declined and havens were bid as US-China trade tensions remained heightened with the tech sector the worst hit amid US export restrictions on certain NVIDIA and AMD chips to China, while nearly all sectors finished in the red aside from energy which benefitted from a rebound in oil prices. Nonetheless, equities were further pressured in late trade following comments from Fed Chair Powell who reaffirmed a wait-and-see approach and suggested incredibly high uncertainty.
• SPX -2.24% at 5,276, NDX -3.04% at 18,258, DJI -1.73% at 39,669, RUT -1.03% at 1,863.
• Click here for a detailed summary.

TRADE/TARIFFS

• China’s Foreign Ministry said if the US wishes to solve issues via dialogue, it should stop exerting maximum pressure, while it urged the US to stop threats and blackmail.
• China is said to be open to talks if US President Trump shows respect and it wants Trump to rein in cabinet members and show consistency, while it wants US talks to address concerns on Taiwan and sanctions, according to Bloomberg sources.
• China said they are aware that certain goods exported to the US reach a 245% tariff, while it will ignore the US's "numbers game" and reiterated that it will fight till the end if interests are harmed.
• Chinese Global Times’s Hu Xijin tweeted "It's highly likely that China will retaliate by cutting off rare earth supplies to the US...By the way, China is now capable of producing its own GPUs".
• China is said to move from the US to Canada for more oil amid trade tensions, according to Bloomberg.
• China's envoy to Spain said they want to be the EU's trading partner, not a rival.
• India reportedly plans to scrap the import tax on US ethane and liquefied petroleum gas under broader negotiations with the US as it looks to reduce its trade surplus and ease its tariff burden, according to Reuters citing sources.
• WTO cut its 2025 global merchandise trade growth forecast to -0.2% (prev. +3.0%) and sees a modest recovery of merchandise trade growth of 2.5% in 2026, while the 2025 decline could be 1.5% with higher US reciprocal tariffs and spillover effects.
• Chinese President Xi reportedly seeks an upgraded protocol for China-ASEAN free trade area, according to Xinhua.
• Chinese Vice Premier Lifeng vowed more support for foreign trade and said China has a very large market and huge consumption potential which provides a broad space for the import of high-quality products from other countries.
• Intel (INTC) told its Chinese clients last week that chips would require a licence for exporting to China if the chips met certain requirements, according to FT.

NOTABLE HEADLINES

• Fed Chair Powell said the Fed is well-positioned to wait for greater clarity before considering any change to its policy stance, while they may find themselves in the challenging scenario in which dual-mandate goals are in tension, and if that occurs, the Fed would consider how far the economy is from each goal and potential time horizons for those gaps to close. Powell said the effects of policy will likely move the Fed away from its goals and they will be moving away from goals for the balance of this year but perhaps can resume next year. Furthermore, he said changes in policies are fundamental and there is no real experience in how to analyse it with such incredibly high uncertainty, as well as noted that high uncertainty leads to households and businesses stepping back from decisions.
• Fed's Hammack (2026 voter) said she sees a strong case to hold policy steady for now and policy patience will allow the Fed to gather more data on the economy. Hammack noted it is not appropriate to respond to every twist and turn of markets, while the focus is on how markets impact the economy and not focused on asset prices per se. Furthermore, Hammack said **it is going to take time to see how trade policy is impacting the economy and the right thing may be to stay on hold for now, noting steady policy is an "active choice".

DATA RECAP

• US Retail Sales MM (Mar) 1.4% vs. Exp. 1.3% (Prev. 0.2%)
• US Industrial Production MM (Mar) -0.3% vs. Exp. -0.2% (Prev. 0.7%)
• US Manufacturing Output MM (Mar) 0.3% vs. Exp. 0.3% (Prev. 0.9%)
• US Capacity Utilization SA (Mar) 77.8% vs. Exp. 78.0% (Prev. 78.2%)
• US NAHB Housing Market Indx (Apr) 40.0 vs. Exp. 37.0 (Prev. 39.0)
• US Retail Inventories Ex-Auto Rev (Feb) 0.1% (Prev. 0.1%)
• US Business Inventories MM (Feb) 0.2% vs. Exp. 0.2% (Prev. 0.3%)

FX

• USD was pressured throughout the day and the DXY retreated back beneath the 100.00 level amid ongoing trade uncertainty and US-China frictions, while the latest data releases were mixed and there was also a mixed reaction in the dollar to comments from Fed Chair Powell who maintained a wait-and-see approach, putting off the recently founded optimism related to Waller who favours cuts sooner than previously thought given the tariff environment.
• EUR benefitted from the dollar selling and briefly reclaimed the 1.1400 status, while attention turns to the looming ECB policy meeting where the central bank is expected to lower its rates by 25bps.
• GBP was ultimately flat against the dollar following a pull back from resistance near the 1.3300 handle int he aftermath of softer-than-expected UK CPI data.
• JPY strengthened with USD/JPY declining to sub-142.00 territory amid a weaker dollar, softer US yields and the risk-off mood.
• BoC Rate Decision 2.75% vs. Exp. 2.75% (Prev. 2.75%), BoC said it will support economic growth while ensuring that inflation remains well controlled, as well as noted the major shift in direction of US trade policy and the unpredictability of tariffs have increased uncertainty, diminished prospects for economic growth, and raised inflation expectations. BoC's Macklem said they decided to hold the policy rate unchanged as they gain more information about both the path forward for US tariffs and their impact, while he added that monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war. Furthermore, Macklem noted they are just as worried about inflation being above 2% as it is being below 2% and that they considered two options which were holding rates or cutting by 25bps.

FIXED INCOME

• T-notes rallied in risk-off trade after Fed Chair Powell maintained his call for patience.

COMMODITIES

• Oil prices were firmer with the complex supported following reports that China is open to talks with the US and that the US also issued fresh Iran-related sanctions targeting oil tankers, while US Treasury Secretary Bessent noted that the Trump administration has made it clear that they will apply maximum pressure on Iran and disrupt the regime’s oil supply chain and exports.
• US EIA Weekly Crude Stocks w/e 0.515M vs. Exp. 0.507M (Prev. 2.553M).
• Qatar set June Al-Shaheen crude term price at USD 1.76/bbl above Dubai quotes, according to Reuters sources.
• Iraq plans to cut crude oil shipments by 70k BPD in April, amid pressure to reach OPEC+ target.

GEOPOLITICAL

MIDDLE EAST

• US issued fresh Iran-related sanctions, targeting oil tankers.
• US Treasury Secretary Bessent said the Trump administration has made it clear that they will apply maximum pressure on Iran and disrupt the regime’s oil supply chain and exports, which support terrorist proxies and partners, while he added they are prepared to take all actions available to get Iran’s energy exports down to zero.
• Iranian Foreign Ministry spokesperson said US talks are at risk of falling apart if goalposts are moved.
• US is in talks with Yemen forces on land offensive against Houthis although it would not involve US troops, while the Yemeni ground offensive could include an attempt to recapture the capital Sanaa, according to Bloomberg sources. In relevant news, UAE denied a report claiming it is involved in talks about a possible land offensive in Yemen.

RUSSIA-UKRAINE

• Ukraine's Deputy PM said minerals deal talks with the US see substantial progress and teams agreed to sign a memorandum in the near future and a deal will need ratification in Ukraine's parliament.
• Russia's Kremlin said Russian President Putin and Qatar's Emir will exchange views on Ukraine and regional affairs.
• US Secretary of State Rubio and Special Envoy Witkoff are to travel to Paris between April 16th-18th for discussions with Europeans on Ukraine.

ASIA-PAC

NOTABLE HEADLINES

• US is reportedly debating barring Americans' access to DeepSeek services and is weighing penalties to block DeepSeek from US tech buys, according to NYT.
• BoJ is said to cut 2025 growth forecast in its Quarterly Report, while there is no consensus within the BoJ on the extent of Trump tariff damage, according to Reuters sources.
• Japan's Government Pension Investment Fund said it has switched its foreign equities investment benchmark to exclude domestic Chinese shares.

EU/UK

DATA RECAP

• UK CPI YY (Mar) 2.6% vs. Exp. 2.7% (Prev. 2.8%)
• UK Core CPI YY (Mar) 3.4% vs. Exp. 3.4% (Prev. 3.5%)
• EU HICP Final YY (Mar) 2.2% vs. Exp. 2.2% (Prev. 2.2%)
• EU HICP-X F&E Final YY (Mar) 2.5% vs. Exp. 2.4% (Prev. 2.4%)