US stocks continued to rally on trade-related optimism – Newsquawk Asia-Pac Market Open

US stocks continued to move higher with sentiment supported by trade optimism after US President Trump hinted at talks with China and although China denied such talks were occurring, President Trump still noted that they had a meeting with China that morning. Furthermore, the Trump administration was said to be considering exceptions for some Chinese auto parts, while reports also noted that talks were going well with India and Treasury Secretary Bessent said things were moving quicker than thought with South Korea.
USD was pressured amid the broad risk-on sentiment with the DXY not helped by mixed data releases and dovish comments from Fed officials including Hammack who noted the Fed could move in June if data is clear about the economy’s state which spurred some dovish bets and saw money markets price a 75% chance of a 25bps cut in June vs. 60% pre-comment.
Looking ahead, highlights include Tokyo CPI & Japanese Leading Index, Singapore Industrial Production, Holiday Closures in Australia & New Zealand.

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LOOKING AHEAD

Highlights include Tokyo CPI & Japanese Leading Index, Singapore Industrial Production, Holiday Closures in Australia & New Zealand.
Click for the Newsquawk Week Ahead.

US TRADE

US stocks continued to move higher with sentiment supported by trade optimism after US President Trump hinted at talks with China and although China denied such talks were occurring, President Trump still noted that they had a meeting with China that morning. Furthermore, the Trump administration was said to be considering exceptions for some Chinese auto parts, while reports also noted that talks were going well with India and Treasury Secretary Bessent said things were moving quicker than thought with South Korea.
SPX +2.03% at 5,485, NDX +2.79% at 19,214, DJI +1.23% at 40,093, RUT +2.00% at 1,958.
Click here for a detailed summary.

TARIFFS/TRADE

US President Trump said either countries negotiate a deal or they will set a deal and some will be tariffed, at some point, while they will set prices for deals. Trump also said he will meet with world leaders in Rome and that leaders want to meet on trade.
US President Trump posted on Truth that “Boeing should default China for not taking the beautifully finished planes that China committed to purchase”. Trump also commented that “Fentanyl continues to pour into our Country from China, through Mexico and Canada, killing hundreds of thousands of our people, and it better stop, NOW!”
US President Trump’s administration is reportedly weighing exceptions for some Chinese auto parts, although no final decision has been made and the administration is examining streamlining overlap between auto Section 232 tariffs and the steel, aluminium, and fentanyl tariffs.
US President Trump could reportedly make the first move towards reconciling with Chinese President XI, while one White House official said it is possible, though not certain, according to Politico citing sources.
US posted a notice on some China tariff levels notice applies to ‘low-value imports’ from China and Hong Kong which eliminates the de minimis exemption, according to Bloomberg.
US President Trump said he had talks with Norway about war and trade, while they made a lot of progress and the next few days will be very important. Furthermore, Trump said he and the Norwegian PM get along well on trade and have no problem with Norway on trade.
US Treasury Secretary Bessent said he had a good meeting with South Korea today, while he said they are moving faster than thought on South Korea and will talk technical terms. Furthermore, he said they could get to terms with South Korea next week.
USTR Greer and Vietnamese counterpart agreed to work towards balanced trade and had a productive, virtual meeting.
China’s Vice Premier He Lifeng said the nation must face up to the new situation of the US tariff increase on China and need to increase policy supply and solve practical problems.
China Foreign Ministry spokesperson Gou said China and the US are not yet in talks on tariffs and China will fight the tariff war “if we have to”, while Gou added that respect is the condition for any talks to happen. Guo also said “As far as I know, China and the US have not consulted or negotiated on the issue of tariffs, let alone reached an agreement”.
China’s MOFCOM said any content about China-US economic and trade talks is “groundless and has no factual basis”, while it added if the US really wants to resolve the issue, it should lift all unilateral tariff measures against China.
People inside the White House are alerting Wall Street executives that they are nearing an agreement in principle on trade with India, according to FBN citing sources.
Canadian PM Carney said regarding US President Trump’s comments in not wanting Canada’s cars that “we decide what happens here” and the remarks are more proof that Canada’s old relationship with the US is over.
Canadian Finance Minister Champagne said they need to fight against the US tariffs, which are still affecting a large portion of Canadian goods. Furthermore, he said the scheduling was too tight for a bilateral meeting with US Treasury Secretary Bessent but they did interact at the G7 meeting in Washington.
UK Chancellor Reeves said she understands US concerns on trade imbalances, especially in China and they don’t always agree with the US on policy prescriptions but is confident a trade deal can be done.
Japan is to resist US President Trump’s efforts to form a trade bloc against China because of the importance of Tokyo’s trade ties with Beijing, according to Bloomberg citing current and former Japanese government officials.
Japan reportedly weighs buying more US soybeans as part of a tariff deal and is considering an increase in imports of American soybeans to help the US offset the loss of exports to China.

NOTABLE HEADLINES

Fed’s Waller (voter) said the general tone is that many companies are frozen by tariff uncertainty, and it is unlikely by July that there will be a clear view of the impact of tariffs, while he added that H2 will bring clarity on the impact of tariffs.
Fed’s Hammack (2026 Voter) said uncertainty is really weighing on businesses and their planning, while does not know yet what uncertainty and trade policy will do to the economy. Furthermore, she said it is too soon to consider rate move in May but could move in June if the data is clear about the economy’s state.
US President Trump reiterated that he hopes the Fed lowers interest rates and they should, while he reiterated criticism that the Fed is late.
US President Trump is expected to sign an executive order today to advance the deep-sea mining industry, according to Reuters sources.

DATA RECAP

US Durable Goods (Mar) 9.2% vs. Exp. 2.0% (Prev. 1.0%, Rev. 0.9%)
US Existing Home Sales (Mar) 4.02M vs. Exp. 4.13M (Prev. 4.26M, Rev. 4.27M)
US Exist. Home Sales % Chg (Mar) -5.9% vs. Exp. -3.0% (Prev. 4.2%, Rev. 4.4%)
US KC Fed Manufacturing (Apr) -5.0 (Prev. 1.0)
US KC Fed Composite Index (Apr) -4.0 (Prev. -2.0)
US Initial Jobless Claims w/e 222.0k vs. Exp. 222.0k (Prev. 215.0k, Rev. 216k)
US Continued Jobless Claims w/e 1.841M vs. Exp. 1.875M (Prev. 1.885M, Rev. 1.878M)

FX

USD was pressured amid the broad risk-on sentiment with the DXY not helped by mixed data releases and dovish comments from Fed officials including Hammack who noted the Fed could move in June if data is clear about the economy’s state which spurred some dovish bets and saw money markets price a 75% chance of a 25bps cut in June vs. 60% pre-comment.
EUR benefitted from the dollar weakness and rose to just shy of the 1.1400 handle with the upside in the single currency also facilitated by better-than-expected German IFO data.
GBP steadily advanced and returned to the 1.3300 territory with comments from BoE officials doing little to shift the dial, although Governor Bailey
BlackRock CEO Fink is buying up ‘undervalued’ UK assets, and he is more confident about the investment prospects for the UK than this time last year
JPY strengthened against the dollar but with gains capped as risk appetite dampened haven demand.

FIXED INCOME

T-notes caught a bid across the curve and were supported by dovish comments including from Fed’s Waller who continued to suggest he is willing to look through price increases, as well as warned that data focus brings a risk of being late on policy action and stated that rate cuts could come from rising unemployment. Furthermore, Fed’s Hammack said that it is too early to consider a move at the May FOMC but opened the door to a cut in June, while a weak 7yr note auction had little effect on prices.

COMMODITIES

Oil prices were choppy but ultimately eked mild gains with prices buoyed by the risk-on sentiment in a day of heavy headline newsflow.
European Commission President von der Leyen said will present a roadmap in two weeks with concrete measures to phase out all imports of Russian fossil fuels, while she added LNG imports from the US remain of strategic importance for the EU.

GEOPOLITICAL

MIDDLE EAST

Israeli army issued evacuation orders to all residents of the Beit Hanoun and Sheikh Zayed areas in the northern Gaza Strip.
Iranian Foreign Minister Araghchi told White House envoy Witkoff during nuclear talks on Saturday that it might not be possible to reach a final nuclear accord on President Trump’s proposed timetable and wants to focus on reaching a comprehensive deal within 60 days, according to Axios sources.
US President Trump said they are having very serious meetings with respect to Iran and thinks they are doing well with Iran.
US State Department Director of Policy Planning Anton and Special Envoy Witkoff will be in Oman for a technical meeting with Iran on Saturday, while the IAEA plans to send a team to Iran this week.

RUSSIA-UKRAINE

US President Trump posted “I am not happy with the Russian strikes on KYIV. Not necessary, and very bad timing. Vladimir, STOP! 5000 soldiers a week are dying. Lets get the Peace Deal DONE!”
US President Trump repeated he was not happy with the Russia strike and is putting a lot of pressure on both sides, while he would prefer to answer questions about Russia sanctions in a week and thinks it will be very difficult for Ukraine to get Crimea back. Furthermore, Trump said that both sides want peace now and he doesn’t think Russia is an obstacle to peace.
US is to demand Russian President Putin accept Ukraine’s right to military force, according to Bloomberg.
Ukrainian President Zelensky said the overnight Russian strike that hit a residential building in Kyiv used a North Korean missile.
Ukraine’s Finance Minister Marchenko said the US and Ukraine made progress on the critical minerals deal, but won’t seal a deal this week, while it was also reported that US Treasury Secretary Bessent wants the issue of frozen Russian assets to be part of broader discussions.
Russia said it may resume nuclear tests in response to similar measures from Washington, according to Al Arabiya.

OTHER

India has reportedly cancelled the ceasefire with Pakistan with immediate effect and asked all Pakistanis to leave its territory by April 29th, according to Sky News Arabia.
Pakistan said all trade with India including to and from any third country via Pakistan is suspended and Pakistan’s airspace will be closed with immediate effect for all Indian owned or Indian operated airlines. Pakistan also warned that any attempt to violate its rights in the lower river will be considered an act of war.
Pakistan’s Defence Minister said they have information that India is planning acts of terrorism in different cities and if India conducts acts of terrorism in Pakistani cities, it will be a tit for tat and Pakistan will make it that way.

ASIA-PAC

NOTABLE HEADLINES

PBoC Governor Pan met with BoJ Governor Ueda on Wednesday, while the two sides exchanged views on macroeconomic and financial situations, as well as financial cooperation.
PBoC is to sell CNY 600bln of 1yr Medium-term Lending Facility loans on Friday April 25th.
China’s Customs said China will optimise inspection and monitoring methods for lithium battery exports.
WTO panel said the EU did not demonstrate that China acted inconsistently with WTO rules in an intellectual property rights dispute.

EU/UK

NOTABLE HEADLINES

BoE Governor Bailey said they see the impact of tariff uncertainty coming through to business investment and consumers although he noted the impact of tariffs on exchanges has not been that large for the UK. Bailey said they are focused on the growth shock from tariffs and doesn’t think UK economy is close to a recession, while he added the last GDP data was quite encouraging and weak PMI data reflects companies’ uncertainty.
BoE’s Lombardelli said it is prudent to assume more frequent and larger shocks in the future, while she added there is a case for including a wider range of scenarios in forecasting.
ECB’s Lane said he does not expect trade fallout to trigger a recession and there is no reason to say that we are always going to do the default 25bps moves. Lane said QE is to only be used at the lower bound and that uncertainty can mean going small or big with policy.
ECB’s Holzmann said rate cuts must wait for some more tariff certainty and there was “broad consensus” around lowering rates, but some disagreement at the margin, while he added there may be further cuts this year but the number is still outstanding.
ECB’s Knot said the medium-term impact of tariffs on inflation is unclear and it is way too early to take a position if June is a cut or a hold, according to CNBC.
ECB’s Nagel said “We are fairly certain that the inflation effect of tariffs will be stronger in the US than in Europe”, while he added the effect of tariffs on growth will be significant in Europe and Germany.
ECB’s Rehn said should not rule out a larger rate cut and risks are beginning to materialise, while he added there are few good arguments to pause rate cuts. Rehn also said that tariffs have a dampening effect on inflation in the short and medium term, while fiscal spending will only have an effect from 2026 onwards.
ECB is to consider changing strategy to enable more nimble moves to price shocks as the global environment becomes increasingly volatile, while the ECB review is to find that all tools remain appropriate. ECB Governing Council members will discuss the case for such a shift at an informal retreat on May 6th-7th in Porto, Portugal, where they will conduct their first in-depth debate on an ongoing review of their strategy.