Morning Brew April 2 2025

Good morning,

Today is what Trump calls "Liberation Day" and most likely marks the end of free trade as we know it. There is an announcement scheduled for 16:00 EDT, which is 22:00 CET, right after the US market closes. Remember, you are able to trade US equities until 23:00 CET if you wish.

What to expect?

• Immediate effect (April 3rd)
• The Washington Post suggests a 20% universal tariff on imports, but details remain unclear.
• It seems that tariffs will stack up, so if there are 20 tariffs on German goods and steel imports are also hit with 25%, steel from Germany would be hit with 45%.
• Expect significant nervousness heading into the release.

Steve Sosnick summarises the situation well: "I can't recall a situation where the stakes were this high and yet the outcome was so unpredictable."

After the Wisconsin Supreme Court election, which was a humiliating loss for Elon Musk and Trump, expect backlash to deflect from the loss.

Markets are in limbo waiting for clues. Yesterday, the Dow closed down 0.03%, the S&P 500 up 0.38%, and the Nasdaq up 0.87% in volumes near the 20-day average. Johnson & Johnson fell 5.7% after a judge rejected its bankruptcy attempt. The DAX could rise to 22,570.

Yields were lower as the ISM and job openings in the US disappointed, but the USD Index rose to 104.24 as EUR/USD fell to 1.0790, Cable to 1.2913, and USD/JPY to 149.90. Gold and silver are taking a little break at 3,117 and 33.80.

Other Headlines:

• Marco Rubio asks the EU not to exclude US manufacturers from rearmament programmes.
• China continues war games around Taiwan.
• Ukraine peace talks are stuck, according to US officials.
• The deadline regarding TikTok expires Saturday, and the White House is meeting today to decide on a path forward.
• After the Wisconsin Supreme Court election, which was a humiliating loss for Elon Musk and Trump, expect backlash to deflect from the loss.
• Tesla will report first-quarter sales numbers today.

Trade safely and be ready for severe reactions after the announcement and through the night as details become clear.

Wednesday, April 2, 2025

• Germany Retail Sales (February): Reflects consumer demand trends (08:00 AM CET).
• US ADP Employment Change: A preview of labour market conditions ahead of the NFP report (08:15 AM ET).
• US EIA Crude Oil Stocks Change: Key for energy markets (10:30 AM ET).
• Federal Reserve Chair Jerome Powell: Addressing US economic conditions and monetary policy at the Economic Club of Chicago (12:30 PM ET).
• US Tariff Announcement 22:00 CET.

Thursday, April 3, 2025

• Eurozone Unemployment Rate (February): Labour market update for the EU (11:00 AM CET).
• US Initial Jobless Claims: Weekly labour market data (08:30 AM ET).
• US ISM Services PMI: Insights into the service sector's health (10:00 AM ET).
• Andrew Bailey (BoE Governor): Speaking on financial stability and inflation risks at a London forum.

Friday, April 4, 2025

• Germany Industrial Production (February): A measure of industrial activity in Europe’s largest economy (08:00 AM CET).
• US Non-Farm Payrolls & Unemployment Rate (March): The most closely watched labour market report globally (08:30 AM ET).
• Tiff Macklem (BoC Governor): Discussing trade dynamics and monetary policy implications in Toronto.