• US stocks finished lower after another volatile session in which the early risk-on sentiment and advances were wiped out by the US close as sentiment deteriorated with US officials clear that reciprocal tariffs will come into force after midnight including the additional tariffs on China for a total 104% tariff rate. As such, the major indices were pressured with underperformance in the Nasdaq and small-cap Russell 2000, while the S&P 500 closed beneath the 5,000 level for the first time in almost a year to suggest the recent recovery in global risk assets was a mere dead cat bounce.
• USD retreated with early pressure amid an initial rebound in risk sentiment to start the session which saw equities and all G10 peers bid, although sentiment later deteriorated amid significant China tariff worries with the White House confirming that 104% China tariffs are to go into effect at 00:01EDT on April 9th.
• Looking ahead, highlights include South Korean Unemployment Rate, Australian Building Approvals, RBNZ & RBI policy decisions, US Reciprocal Tariffs Take Effect, Supply from Australia.

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LOOKING AHEAD

• Highlights include South Korean Unemployment Rate, Australian Building Approvals, RBNZ & RBI policy decisions, US Reciprocal Tariffs Take Effect, Supply from Australia.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks finished lower after another volatile session in which the early risk-on sentiment and advances were wiped out by the US close as sentiment deteriorated with US officials clear that reciprocal tariffs will come into force after midnight including the additional tariffs on China for a total 104% tariff rate. As such, the major indices were pressured with underperformance in the Nasdaq and small-cap Russell 2000, while the S&P 500 closed beneath the 5,000 level for the first time in almost a year to suggest the recent recovery in global risk assets was a mere dead cat bounce.
• SPX -1.57% at 4,983, NDX -1.95% at 17,090, DJI -0.84% at 37,646, RUT -2.57% at 1,764.
• Click here for a detailed summary.

TRADE/TARIFFS

• US President Trump commented that "China also wants to make a deal, badly, but they don’t know how to get it started. We are waiting for their call. It will happen!", while Trump said he had a great call with the Acting President of South Korea noted a South Korean team is heading to the US.
• US is moving forward with 104% China tariffs which will start at 00:01EDT April 9th, according to Bloomberg citing a US official. It was initially reported that the White House Press Secretary said 104% additional tariffs went into effect at noon Eastern Time because China has not removed its retaliation and that the 104% additional tariff will be collected starting tomorrow April 9th. However, the White House Press Secretary later confirmed additional tariffs on China are to go into effect on April 9th at 00:01.
• White House said US President Trump believes China has to and wants to make a deal with the US, while it was stated that if China makes a deal, Trump will be 'gracious'.
• US Treasury Secretary Bessent said tariff negotiations are the result of massive inbound calls, not the market, and everything is President Trump's decision, while he said everything is on the table when asked about tax with Europe and that President Trump will be personally involved in negotiations, according to CNBC interview.
• White House Press Secretary said President Trump has tasked US Treasury Secretary and USTR Greer to lead talks and deals will be made if they benefit American workers and address trade deficits, while she said President Trump met with the trade team on Tuesday morning and directed the team to have tailor-made trade deals with every country that contacts the administration to strike a deal. Furthermore, she said reciprocal tariffs will continue to go into effect as deals are negotiated and all options are on the table for each country, as well as stated that phones have been ringing "off the hook" from nations trying to negotiate a trade deal.
• USTR Greer said if countries can come to the US for tariff negotiations, they will need to reduce trade barriers and any future trade agreements will need to have strong rules to avoid third countries like China from taking advantage of them. USTR Greer also said they are willing to discuss how to implement a ban on imports of uranium from China and the Commerce Department is considering whether a Section 232 critical minerals investigation is needed.
• White House Economic Adviser Hassett said getting ready to present a plan to US President Trump on who and when with regards to tariff talks and the US is prioritising Japan and South Korea in tariff talks.
• White House CEA Chair Miran said non-tariff barriers from the EU are an issue and it is better to negotiate than not negotiate, while he added it seems unlikely that China would be willing to make a concession up front. Miran also said it depends on the Chinese and that China should offer concessions when asked about additional 50% tariffs on China.
• Canadian PM Carney said the latest US tariffs on Canada's softwood lumber are unjustified and misguided.
• Canada said it has already announced 25% counter-tariffs against some US-made autos which will go into effect April 9th, while tariffs will remain in place until the US eliminates its tariffs against the Canadian auto sector.
• EU spokesperson said the situation has not changed and want to avoid tariffs, while they are waiting for American counterparts to engage in a meaningful way. Furthermore, a spokesperson said the EU expects to present a plan for a response to new tariffs early next week, while they are absolutely ready to discuss and negotiate with the US on energy and all instruments are on the table including LNG.
• EU and China are reportedly discussing the creation of a mechanism to track trade diversions, according to Bloomberg.
• China initiated WTO disputes regarding US "reciprocal tariffs".
• Chinese Foreign Ministry said regarding US President Trump's tariff threats that China will take necessary measures and if the US insists on waging a trade and tariff war, China will fight till the end. It also stated that US acts did not show willingness for serious talks and if the US wants to talk, it should show an attitude for equality and respect.
• China started buying Indian rapeseed meal to replace Canadian supplies, according to Reuters citing industry sources.
• South Korean Acting President said will not band together with China and Japan to counter US tariffs, according to CNN.

NOTABLE HEADLINES

• Fed's Daly (2027 voter) said CEOs feel uncertain and businesses are optimistic about growth, while she added that people move through uncertainty and there's resilience and agility. Furthermore, she said hard data is not a misread of solid growth and labour market, as well as noted she is a little concerned inflation may pick back up from tariffs.
• US President Trump was reported to meet with House Republicans at the White House including lawmakers who have whipped no or lean no on the budget resolution.

FX

• USD retreated with early pressure amid an initial rebound in risk sentiment to start the session which saw equities and all G10 peers bid, although sentiment later deteriorated amid significant China tariff worries with the White House confirming that 104% China tariffs are to go into effect at 00:01EDT on April 9th.
• EUR benefitted from the weakness but is off today's best levels after stalling shy of the 1.1000 level, while there were a slew of ECB speakers but did little to shift the dial.
• GBP advanced although faded most of its intraday gains against the dollar after failing to sustain a brief reclaim of the 1.2800 status and as risk sentiment deteriorated.
• JPY strengthened in which USD/JPY briefly tested the 146.00 level to the downside amid the dollar weakness and haven appeal for the Japanese currency.

FIXED INCOME

• T-notes declined albeit with price action choppy amid the volatile trade dynamics and two-way risk sentiment, while the latest 3yr auction stateside was weak.

COMMODITIES

• Oil prices ultimately sold off through the latter end of the US session as risk sentiment soured.
• US Private inventory data (bbls): Crude -1.1mln (exp. +1.4mln), Distillate -1.8mln (exp. +0.3mln), Gasoline +0.2mln (exp. -1.5mln), Cushing +0.6mln.
• Rio Tinto (RIO AT) copper CEO said there is more interest from the Trump administration regarding bigger US copper supply and hopes it will be part of getting the Resolution Copper Mine project moving.
  - Senior White House official said the executive order will direct the Energy Council to designate coal as a critical mineral and direct agencies to prioritise coal leasing on federal lands.

GEOPOLITICAL

MIDDLE EAST

• US Special Envoy to the Middle East Witkoff will lead talks for the US side with Iran, according to CNN sources, while the "US still believes, as Trump said, the talks will be direct while the Iranians are saying indirect", according to CNN's Marquardt.
• Iran will be allowed to maintain a civilian nuclear program for electricity generation, such as the Bushehr reactor, even if it must completely dismantle its current nuclear program, according to the Jerusalem Post.
• Russia’s Deputy Foreign Minister said Russia must not provide military support to Iran in the case of a US attack but will take all measures to solve the conflict situation, according to RIA.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said Kyiv's forces fought six Chinese soldiers in Eastern Ukraine and took two of them prisoner, while he said one or more countries have joined Russia's war against Ukraine and he expects a US reaction to this. Furthermore ordered officials to obtain an explanation from China regarding its soldiers fighting in Ukraine.**
• US State Department said Russian and US delegations will meet in Istanbul for a second time on April 10th, while there are no political and security issues on the agenda for the US-Russian meeting.

OTHER

• South Korean military fired warning shots after 10 North Korean soldiers violated the demarcation line before returning after the warning shots were fired.
• US Defense Secretary Hegseth said the Panama Canal faces a threat and China did not build and will not weaponise the Panama Canal, while he added the US will take back the canal from Chinese influence.

ASIA-PAC

NOTABLE HEADLINES

• Chinese Premier Li said China's macroeconomic policies this year have fully taken into account various uncertainties and have sufficient reserve policy tools, while he added that China is fully capable of hedging against adverse external influences, according to Xinhua.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Reeves said she spoke to BoE Governor Bailey who confirmed that markets are functioning effectively, while all decisions will be underpinned by the government's fiscal rules. Reeves also commented that nothing is off the table when it comes to tariffs and she will be meeting with US Treasury Secretary Bessent shortly.
• BoE's Lombardelli said tariffs are likely to depress activity and the CPI impact of tariffs will depend on other countries' actions and can't take a position on this now.
• ECB's Holzmann said he sees no reason to deviate from his prior view on rates, in the context of recent tariff announcements.
• ECB's Nagel said global growth prospects have massively deteriorated and that they will make a responsible decision at next week's ECB meeting.
• ECB's Simkus said a 25bps cut is needed in April and the US tariff announcement warrants a more accommodative monetary policy, while he added "we need to move to a less restrictive stance". Furthermore, he sees no need to talk about a 50bps cut and said "that would be too much, we are not behind the curve".
• ECB's Stournaras said a possible inflation rise might delay the normalisation of monetary policy.
• ECB supervisors are checking bank liquidity more often amid the market rout and the feedback is reassuring, according to sources cited by Reuters.
• Germany's CDU/CSU and SPD parties reached an agreement on a coalition, according to NTV.