2nd April 2025

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MACRO:

• The USTR’s office is said to be preparing a new third tariff option—an across-the-board tariff on a subset of nations that likely would not be as high as the 20% universal tariff option floated earlier, according to WSJ sources. (WSJ)
• Trump’s team was said to be still finalizing the size and scope of the new levies he is slated to unveil on Wednesday afternoon. In meetings on Tuesday, Trump’s team continued to hash out their options ahead of a Rose Garden event scheduled to begin as US markets close at 4 p.m. on Wednesday. (BBG)
• US Treasury Secretary Bessent told lawmakers on Tuesday that Wednesday’s tariffs will essentially serve as a “cap,” where the tariffs that are announced will be the highest amount set, Rep. Kevin Hern (R-OK) revealed to CNBC’s Emily Wilkins. (CNBC)
• US Commerce Secretary Lutnick is to appear on Bloomberg TV at 8:30am ET. (Newsquawk)
• Elon Musk’s massive investment in a Wisconsin Supreme Court election didn’t pay off after a liberal judge secured a victory that could tarnish the billionaire’s political clout and trigger worry for some Republicans about how voters are processing the opening months of the new administration. (WSJ)
• Republicans are victorious in two congressional elections in Florida, bolstering their narrow majority in the House, albeit the margins they won by were narrower than Trump had won back in November. (WSJ)
• President Trump will be briefed Wednesday on the contours of a proposal to keep TikTok operational ahead of a pending U.S. deadline to sell or shut it down. Oracle and Blackstone among the investors in talks to potentially participate in a deal. (WSJ)
• Senate Budget Committee Republicans and Majority Leader John Thune will meet with Trump on Wednesday as they look to draft the “one big, beautiful bill” to enact Trump’s domestic agenda of tax cuts, beefed up border security and expanded domestic energy production. (Politico)
• The Trump administration is pursuing agreements with several more countries to take migrants deported from the U.S., according to officials. (WSJ)
• Fed's Goolsbee (voter) said while the "hard" data show the underlying US economy is solid, the labor market strong, and inflation down from its peak in 2022, the imposition of a broad new set of tariffs could lead to renewed inflation or an economic slowdown. (RTRS)
• Goldman's prime brokerage shows hedge funds have reduced their net exposure into the tariff announcement across all regions, especially in Europe, followed by emerging markets and Asia. (RTRS)
• U.S. inflation swaps are indicating that Trump's tariffs will have a hefty short-term impact on consumer prices that will recede in the next few years as recession concerns escalate. (RTRS)
• Strategists say the rollout of Trump’s tariffs regime is dampening sentiment toward the dollar and prompting investors to look elsewhere for their FX trades. (CNBC)
• Options traders are betting that Treasuries will extend their rally as the world braces for President Donald Trump to announce the details of his reciprocal tariff plans on April 2nd. (BBG)
• Canada will not impose retaliatory tariffs on most U.S. food and other essentials or on components essential to avoiding job loss in key sectors of the economy, the Globe and Mail reported citing comments by two federal trade advisers. (Globe & Mail)
• BoJ Governor Ueda said planned new US tariffs could have a huge impact on world trade, warning of a possible hit to global growth. (Nikkei)
• China's President Xi Jinping and EU leaders are set to visit Vietnam in the next few weeks in a swirl of diplomatic activity amid growing risks from U.S. trade tariffs, officials said. (RTRS)
• Chinese megabanks’ interest margins fall to record low as economy slows. Increase in savers and government push to boost credit put pressure on lenders. (FT)
• China’s Communist Party has abruptly switched the roles of two Politburo members, according to the South China Morning Post, an unprecedented move that comes as Xi Jinping breaks personnel norms in his third term. (SCMP)
• EU leaders are facing demands to ensure that small defence businesses benefit from the bloc’s splurge in military spending as countries and companies outside the big league worry about missing out. (FT)
• The RBA said it would increase the rate at which it lends to financial institutions in regular money market operations by 5-10bps, a technical change that had no implications for monetary policy. (RTRS)
• Thailand could see an impact of $7-8bln from U.S. tariffs that may be imposed, the commerce ministry said on Wednesday. Thai semiconductor exports may face tariffs of 25% from the US, the ministry said, adding that it had a strategy on all dimensions of trade negotiations. (RTRS)
• Argentinian President Milei is scheduled to travel to the US on Wednesday, according to a government source. (RTRS)
• Private US energy inventory data for the week, ahead of the EIA data on Wednesday, saw a surprise large build in crude stocks and at Cushing, Oklahoma, with the products seeing draws. (Newswires)

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GEOPOLITICAL:

• China's military held long-range live-fire drills in the East China Sea on Wednesday in an escalation of ongoing drills around Taiwan, saying it was practicing precision strikes on port and energy facilities but with no details on the exact location. (RTRS)
• U.S. Sends Warplanes, Ships to the Middle East in Warning to Iran. Officials said that the aim of the additional forces is to bolster the U.S. campaign in Yemen and deter Iran. The deployments aren’t preparation for an imminent Iran attack. (WSJ)
• The White House is preparing an estimate of what it would cost the federal government to control Greenland as a territory. One option under analysis is to offer a sweeter deal to the government of Greenland than the Danes, who currently subsidize services on the island at a rate of about $600 million every year. (WaPo)
• Russia and Ukraine Adopt Similar Tactic With Trump: Make Nice and Take It Slow. As cease-fire talks stall, Moscow and Kyiv hope president’s patience with the other runs out first. (WSJ)

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EQUITIES:

• Nvidia H20 supplies are seen in doubt as the made-for-China AI chip could be banned within the next few months, according to Asian press citing an unnamed Nvidia distributor. (CNYES
• A U.S. Senate investigative subcommittee on Tuesday is opening a review into Meta Platforms' efforts to gain access to the Chinese market and is seeking documents from the company. (RTRS)

• Intel’s 18A chip manufacturing process has entered risk production and will ramp up to mass production in the 2nd half of 2025. (Tom's Hardware)
• Visa has offered Apple roughly $100 million to take over the tech giant's credit card partnership from Mastercard. (WSJ)
• GameStop announces $1.48B in Bitcoin buying power after closing convertible note sale. (SEC filing)
• Showrooms at US car dealerships have been humming as buyers rush to get new vehicles before Trump’s new tariffs kick in, but dealers worry the good times are about to come to a screeching halt. (FT)
• The GlobalFoundries–UMC tie-up began discussions two years ago, with no progress. GlobalFoundries has been in talks to sell itself for over a decade, not only to UMC, but also Samsung Electronics and chip foundries in China – with no deals. (DigiTimes)
• Alibaba's Qwen2.5-Omni Takes Top Spot in Latest Hugging Face AI Model Rankings. (MktNews)
• Europe’s pharma industry braces for tariffs as carve-out hopes fade. (CNBC)

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