17th April 2025

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RMA 1 : 2 ARS (1 : 5) - COME ON YOU GUNNERS

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TRADE:

• Trump, in a Truth post, said there was "big progress" when he made the surprise move on Wednesday to jump in on preliminary talks with a Japanese trade delegation in Washington. (Truth)
• Japan Economy Minister Akazawa gave few details of the US trade talks but said the parties had agreed to hold a second meeting later this month and that Trump had said getting a deal with Japan was a "top priority". Exchange rates were not part of the talks, he added, comments which coincided with notable yen weakening. (RTRS)
• China will pay no attention if the US continues to play the "tariff numbers game", China's foreign ministry said on Thursday. (RTRS)
• Chinese officials and businesses are seeking a rapprochement with the EU amid Donald Trump’s trade war, but the bloc remains deeply sceptical of becoming a dumping ground for goods diverted from the US. (FT)
• Italian PM Meloni’s meeting with Trump on Thursday will test whether she can use this ideological affinity to secure a breakthrough for Italy and the EU more broadly. (WSJ)

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MACRO:

• Fed's Schmid (voter) said patience is needed to see how tariffs play out. He noted that while he is hearing nervousness about tariffs in the agricultural sector, a recent decline in energy prices may deliver an offsetting "shot in the arm" that could somewhat limit inflation. (RTRS)
• WSJ article "The Post-Covid Era of Ultra-Calm Markets Is Over" notes investors are abandoning go-to strategies like “buy the dip” and snapping up bearish bets, bracing for more volatility. (WSJ)
• China is to detail an expansion plan for the service sector on Monday with China's Ministry of Commerce, Ministry of Industry and Information Technology, and People's Bank of China officials all set to attend the Monday briefing. (Newswires)
• Chinese tech giants Tencent and Douyin, TikTok's sister app in China, have in the past two days launched programs to help Chinese exporters sell their goods domestically, amid an escalating US-China trade war. (RTRS)
• US investors could be forced to offload around $800 billion of Chinese equities “in an extreme scenario” of financial decoupling between the world’s two largest economies, Goldman Sachs Group Inc. estimates. (BBG)
• China Shadow Bank’s Collapse Shows Wealth Wipeout Is Deepening. (BBG)
• Net inflows from onshore funds into Hong Kong’s equity market through the Southbound channel in the first quarter was at $56.16 billion, already more than half of last year’s, according to Wind data, indicative of Chinese investors piling into tech names despite tariffs. (WSJ)
• Chinese aluminum producers are on track to expand overseas capacity, saying they remain unfazed by the uncertainties caused by US President Donald Trump’s attempts to reorder global trade. (BBG)
• BoJ Governor Ueda, in parliament, reiterated his concerns on the growth outlook and market volatility caused by Trump's tariffs. Also reaffirmed that with real rates extremely low, the bank will continue to raise rates if the economy and prices move in line with its projections. (RTRS)
• BoJ's Nakagawa echoed concerns around uncertainty due to US tariff policy both via falling exports and excessive market volatility. At the same time, she warned of the risk of an overshoot in domestic inflation. (RTRS)
• Japan’s exports rose for a sixth straight month in March but at a much slower pace as concerns over Trump’s tariffs start to weigh on global trade. (WSJ)
• Australian employment rebounded in March but beneath the median forecast, recovering from a one-off dive the previous month, while the unemployment rate came in slightly below forecasts, showing a labour market that remains healthy but does not stand in the way of policy easing. (RTRS)
• New Zealand consumer prices rose more than expected in the first quarter, pushing annual inflation higher for the first time in almost three years just as the central bank faces tariff-driven economic uncertainty. (WSJ)
• South Korea's central bank signalled it would cut rates in May and left the door wide open to further monetary easing to cope with "significant" risks to the economy from Trump's tariff policy. (RTRS)
• Leveraged equity positions in Taiwan fell for a 19th consecutive session, the longest streak in almost 10 years, underscoring how sharply local investors’ risk appetite is turning amid tariff concerns. (BBG)
• Binance is advising several countries on creating their own digital assets regulations and establishing national strategic bitcoin reserves. (FT)
• In a stunning Champions League upset, Arsenal obliterated Real Madrid 5-1 on aggregate, leaving the Spanish giants shell-shocked, some analysts suggest sentiment may be impaired in the Madrid capital for a generation. (Newswires)
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GEOPOLITICS:

• Plans are afoot for an American-owned company seized by the Kremlin and placed under state control to be used to supply food to the Russian army, a document seen by Reuters showed, potentially threatening Moscow's warming relations with the US. (RTRS)
• A Depleted Hamas Is So Low on Cash That It Can’t Pay Its Fighters. (WSJ)

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EQUITIES:

• TSMC logged a forecast-beating 60% leap in quarterly profit, whilst it reaffirmed its 2025 outlook despite tariffs. It said it had not seen any change in customer behaviour due to tariffs. Reaffirmed robust AI demand, whilst noting it still needs to build a lot of capacity to meet CoWoS demand, although noted 2026 supply/demand will be more balanced. (RTRS)
• The US House of Representatives China committee has asked Nvidia to explain whether and how Chinese company DeepSeek obtained export-controlled chips to power its AI app, which lawmakers say poses a national security threat. (FT)
• Nvidia received around $18 billion of orders for servers and modules equipped with the H20 in the first three months of the year, a higher value of orders than Nvidia’s total revenue from China during the last fiscal year, according to WSJ sources. (WSJ)
• Trump administration officials have increasingly felt that new innovations in AI were driven by inference, which allows AI models to be applied in real-life scenarios. Nvidia’s H20 had proved to be effective in that work, leading to this week's announced restrictions on China sales. (WSJ)
• Nvidia has said selling to China helps bring in revenue that it uses to keep its global lead in AI. Privately, it has pushed back against any new restrictions, arguing that China has already been able to produce some chips comparable to its H20, according to WSJ sources. (WSJ)
• PDD's Temu and Shein, two of the biggest advertisers on US social media, are sharply cutting their US digital ad spending, industry data show, in a blow to tech companies such as Meta's Facebook and Alphabet's YouTube. (RTRS)
• Stargate, funded by SoftBank, OpenAI, and Oracle, is weighing a future investment in the UK as it looks overseas to build out global infrastructure for powerful AI models, according to FT sources. (FT)
• Perplexity AI Inc., an AI startup vying with Google and OpenAI, is ramping up efforts to get prime placement for its virtual assistant on smartphones. (BBG)
• Ford Motor is preparing to raise prices on cars rolling off assembly lines starting next month if President Donald Trump doesn’t deliver on the tariff relief he’s hinted at for automakers. (BBG)
• Alcoa said it expects US tariffs on aluminum imports from Canada to cost the company about $90 million in the current quarter. (RTRS)
• Prologis, the world’s biggest industrial real-estate giant, said the escalating global trade war will spur demand for US storage space as companies stockpile inventory close to consumers. (WSJ)
• Citigroup analysts say Chinese cloud-service providers originally planned to source 50% of AI accelerator demand in 2025 using Nvidia's H20 processors and would now likely turn to Huawei and Cambricon AI chips. (WSJ)
• Tencent launched a program to support Chinese exporters in the domestic market via its WeChat e-commerce facilities. The program aims for a 100 billion yuan, equivalent of $13.69 billion, in sales, it said. (WSJ)
• China is banning automakers from using the terms "smart driving" and "autonomous driving" when they advertise driving assistance features, and it will tighten scrutiny of such technology upgrades. That follows a fatal accident involving a Xiaomi car. (RTRS)
• Chinese tea chain Chagee Holdings Ltd. has raised $411 million after pricing its US initial public offering at the top end of the marketed range, defying a market besieged by trade-war volatility. (BBG)
• Hermès’ sales at the start of the year were hurt by a slowdown in Chinese demand, showing that even the most resilient purveyor of high-end goods wasn’t spared the slump in the luxury industry there. (BBG)
• The US has halted a $5bn offshore wind project that Norway’s Equinor is developing, dealing a blow to the embattled renewable power sector and signalling an aggressive new push against clean energy initiatives. (FT)
• Pernod Ricard confirmed it expects sales to fall for the current fiscal year as the Absolut Vodka owner grapples with trade turmoils and a downturn in demand. (WSJ)
• Deliveroo maintained its full-year guidance after it reported higher revenue for the first quarter, boosted by strong gross transaction value growth in key markets. (WSJ)
• BHP CEO cautioned that a tariff war could slow the global economy and fracture world trade, as the company reported higher output of copper. (WSJ)
• ABB’s first-quarter earnings increase exceeded analysts’ expectations, and the company said it intends to spin off its robotics division. (WSJ)
• J Sainsbury beat profit expectations for the full fiscal year, as the company focuses on supporting sales volumes by lowering prices. (WSJ)

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