1st May 2025

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TRADE:

• Trump’s administration has been seeking contact with Beijing to initiate tariff talks via various channels, according to a state-run media outlet, which added China doesn't need to talk to the US until it takes meaningful measures and that "clearly the more anxious party at the moment", caveating, "But if the US wishes to engage with China, there’s no harm in it for China at this stage". (BBG/FT)
• FT cites analysts as saying the language from China's state run media outlet (above) represents a softening of Beijing’s position from last week when the commerce ministry indicated the US would need to drop its steep levies on China before negotiations could begin. (FT)
• China will hold off on entering serious trade talks with the US while it waits to see which of Trump’s advisers will have his ear and how other countries will respond to the 90-day pause on tariffs, according to SCMP sources. (SCMP)
• Trump said at a town hall that he has "potential" trade deals with India, South Korea and Japan. Said he was in no rush to conclude the deals because the US is reaping the benefits of the tariffs he has imposed. He also said there is a very good chance the US will make a deal with China. (RTRS)
• Trump said on Wednesday that there will be a tariff "wall" for pharmaceutical companies operating in the United States after a certain amount of time. (RTRS)
• USTR Greer said on Fox News the Trump administration expects to conclude initial tariff deals with some U.S. trading partners within weeks, but negotiations with India are not "finish-line close" and no official talks with China are under way. (Fox)
• The EU is planning to share a paper with the US next week that will set out a package of proposals to kick-start trade negotiations which includes lowering trade and non-tariff barriers, boosting investments in the US, cooperating on global challenges such as tackling China’s steel overcapacity and purchasing US goods like LNG and technologies, according to Bloomberg sources. (BBG)
• A bid to reject President Trump’s worldwide “Liberation Day” tariffs fell short in the Senate on Wednesday, as most Republicans stayed aligned with the White House despite growing concerns about the economy. (WSJ)
• WSJ article "Beijing Doesn’t Want America to See Its Trade-War Pain", notes plunging trade has already led to job cuts, highlighting many struggling businesses in China. (WSJ)
• Nvidia CEO Jensen Huang is set to discuss Nvidia’s business practices and compliance with US export controls at a closed-door roundtable held by the House of Representatives Foreign Affairs Committee on Thursday. The roundtable is part of a series of conversations lawmakers are having with experts on export controls. (WSJ)
• The head of Europe's Airbus called for a return to tariff-free trading for aerospace on Wednesday, joining a chorus of U.S. industry leaders seeking relief from a growing tariff war in which Airbus warned there could be "only losers". (RTRS)
• Australia has boasted its best three-month run of exports to the United States as President Donald Trump's tariff policies sparked a rush to buy gold, turning a rare U.S. trade surplus into a deficit. (RTRS)
• The EU is threatening to time-limit any agreement to remove red tape on UK food and drink exports across the Channel unless it gets long-term access to British fishing waters. (FT)

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MACRO:

• Trump said on Powell, "He should reduce interest rates. I think I understand interest a lot better than him, because I've had to really use interest rates." (RTRS)
• Trump is skeptical of congressional Republicans’ emerging plans to make deep cuts to Medicaid, the safety-net health program covering nearly 80 million Americans, according to Politico sources. (Politico)
• The Yen was sold after the BoJ delivered a back-to-back rate hold and cut its growth and inflation forecasts as policymakers watch to see how tariffs will affect the economy. (WSJ)
• BoJ Governor Ueda's post meeting presser led to further Yen selling as he echoed the dovish sentiment, affirming the likely delay in hitting the inflation target and decline in growth associated with tariffs. (RTRS)
• Japan's factory activity shrank for the 10th straight month in April on weaker overseas demand and worsening concerns about U.S. tariffs, the final au Jibun Bank PMI showed. (RTRS)
• Share buybacks announced by Japanese companies in April nearly tripled on the previous year as boards opted for placating investors over holding dry powder for tariff uncertainties. (FT)
• The average price of resale homes across 100 Chinese cities fell by 0.7% month-on-month in April, a report by a Chinese real estate research institute said, as more residential properties came onto the market boosting competition for buyers. (RTRS)
• Multinational companies are flocking to China’s bond market as they try to secure cheaper financing and hedge against deteriorating relations between Beijing and the US. (FT)
• Macau’s gaming revenue rose 1.7% in April, exceeding analyst expectation for a decline, signaling stronger tourism demand ahead of China’s May “Golden Week” holiday starting Thursday. (BBG)
• Australia's centre-left Labor government is likely to retain power in a close-run national election this weekend, two opinion polls showed, with voters ranking Trump's policies among their top concerns. (RTRS)
• Australia’s budget bottom line will be improved by about A$14 billion ($9 billion) over four years under a Liberal-National Coalition government, the opposition’s economic spokespeople said as they unveiled plans to cut the bureaucracy and scrap the Labor government’s tax cuts. (BBG)
• Portuguese Prime Minister Luis Montenegro reaffirmed a plan to cut income taxes as he tries to attract voters before facing an election in three weeks. (BBG)
• South Korea’s exports unexpectedly expanded for a third consecutive month in April, even as Trump’s sweeping tariffs have started to hurt international trade. (WSJ)
• Norway’s giant $1.8tn oil fund expects to save a fifth of its annual trading costs by using AI to trade less frequently and more efficiently, in a sign of how the technology could upend global finance. (FT)
• The IMF downgraded its growth forecasts for oil exporting countries in the Middle East and North Africa, including Saudi Arabia and Iraq, citing escalating global trade tensions and lower energy prices. (BBG)

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GEOPOLITICS:

• Ukraine and the U.S. on Wednesday signed a deal heavily promoted by Trump that will give the US preferential access to new Ukrainian minerals deals and fund investment in Ukraine's reconstruction. (RTRS)
• Sen. Lindsey Graham, a close ally of President Trump, is forging ahead on a plan to impose new sanctions on Russia and steep tariffs on countries that buy Russian oil, gas and uranium. (WSJ)
• China's Foreign Minister Wang Yi told a senior Iranian national security official on Wednesday that Beijing appreciated Tehran making diplomatic efforts regarding its nuclear programme, ahead of a new round of U.S.-Iran talks on Saturday. (RTRS)
• The U.S. Army is embarking on its largest overhaul since the end of the Cold War, with plans to equip each of its combat divisions with around 1,000 drones and to shed outmoded weapons and other equipment. (WSJ)
• The UK is in talks with France and Saudi Arabia about whether to recognise a Palestinian state at a UN conference in June. (FT)

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EQUITIES:

• Meta rode strong advertising performance to beat analysts' revenue estimates for the first quarter and match expectations for the next quarter, assuaging investor concerns over tariff-related economic growth fears. Meta also increased its capex guide for the year as it speeds up construction of data centers that can support AI. (RTRS)
• Microsoft forecast stronger-than-expected quarterly growth for its cloud-computing business Azure after blowout results in the latest quarter, although the outperformance is expected to come from the non-AI Azure business. Said capex will continue to grow but at lower growth rates. (RTRS)
• Qualcomm forecast third-quarter revenue that would not meet estimates, voicing concerns about the effects of Trump's trade war. (RTRS)
• Tesla board members reached out about a month ago to several executive search firms to find a successor to CEO Elon Musk. The current status of the board's push, which, according to the report, was sparked by Musk's heavy involvement with the Trump administration. (WSJ)
• Tesla has denied the WSJ reports on the board seeking a Musk replacement, saying it communicated to the publication that it was false before the report was published. (X)
• eBay logged higher profit and revenue in the first quarter and named a new chief financial officer, although its guidance was lackluster. (WSJ)
• Retail investors flocked to Robinhood Markets Inc. as President Donald Trump’s global tariffs roiled markets, boosting the company’s revenue and earnings, even as growth in cryptocurrency revenue slowed. (BBG)
• Nvidia CEO Jensen Huang said all American companies will eventually need or become AI factories—or entities that produce both goods and AI—and will create skilled U.S. jobs in the process. (WSJ)
• Google’s ad network has begun showing advertising within the flow of conversations with chatbots — part of Alphabet Inc.’s efforts to keep its edge in digital advertising as generative artificial intelligence takes off. (BBG)
• Amazon said it plans to invest $4 billion to expand its delivery network in small towns across the U.S. (WSJ)
• A federal judge hammered Apple for violating an antitrust ruling related to App Store restrictions and took the extraordinary step of referring the matter to federal prosecutors for a criminal contempt investigation. (WSJ)
• OpenAI is raising questions over a group behind a now-amended California bill that would have threatened the company’s for-profit restructuring plans, and asking if the effort could have links to former business partner turned rival Elon Musk — links the organization denies. (Politico)
• Lloyds Banking Group Plc ramped up lending in the first quarter, helping it broadly meet earnings expectations even as it set aside more to prepare for a worsening economy. (BBG)
• Rolls-Royce said it expected to be able to offset the impact of global tariffs to keep it on track for 2025 profit targets, following a strong start to the year. (RTRS)
• Spain’s competition watchdog cleared Banco Bilbao Vizcaya Argentaria’s acquisition of Banco Sabadell, putting the final decision on the year-long takeover battle in the hands of the government. (WSJ)
• Chinese automakers’ latest monthly sales show that demand for electric vehicles in the world’s second-largest economy remains strong, with Tesla rivals such as XPeng posting robust April numbers. (WSJ)
• Couche-Tard and Japan's Seven & i said they have signed a non-disclosure agreement that will give the Canadian company access to the Japanese retailer's financial data as it seeks a $47 billion acquisition. (RTRS)
• South Korea’s semiconductor exports rose 17.2% year-on-year to US$11.7 billion in April, the highest ever figure for April, on strong demand for high-value chips like high-bandwidth memory, and higher prices for mainstream 8GB DDR4 DRAM.

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