Market Quick Take – 15 April 2025

Market drivers and catalysts

• Equities: Tariff exemptions boost US, European stocks; autos, electronics, and banks outperform
• Volatility: VIX declines significantly; short-term indicators ease but caution persists
• Digital Assets: Bitcoin and Ethereum rise; MicroStrategy Bitcoin accumulation notable
• Currencies: USD sideways after choppy session yesterday
• Fixed Income: US long treasury yields drop back sharply after their recent surge
• Commodities: Crude stabilising with focus on IEA, Gold holds near record highs
• Macro events: Germany April ZEW Survey Expectations, US April Empire Manufacturing

Macro data and headlines

• US President Trump announced plans to impose tariffs on imported pharmaceuticals soon, highlighting that the US does not produce its own drugs. He also reiterated that the EU is taking advantage of the US and emphasized that the EU needs to negotiate, which they are attempting to do.
• UK retail sales rose by 0.9% in March 2025, exceeding the 0.5% forecast. Unseasonably warm weather and Mother's Day boosted spending on gardening, DIY, food, and health products. Food sales grew by 1.6%, while non-food sales increased by 0.6%.
• US consumer inflation expectations for the next year rose to 3.6% in March 2025, up from 3.1% in February. Expectations increased for food, medical care, and rent, but decreased for gas, college education, and home prices. Three-year expectations stayed at 3%, while five-year expectations dropped to 2.9%.
• Treasury Secretary Bessent rejected speculation that foreign nationals are dumping their US Treasury Holdings, instead attributing the recent selloff to deleveraging, saying the Treasury has tools to address dislocation if needed.

Macro calendar highlights (times in GMT)

0600 – UK ILO Unemployment Rate
0900 – Germany April ZEW Survey Expectations
1000 – IEA’s Oil Market Report
1230 – US April Empire Manufacturing

Earnings events

• Today: Johnson & Johnson, Bank of America , Citigroup, United Airlines, Ericsson, Interactive Brokers
• Wednesday: ASML, Abbot Laboratories, Progressive Corporation
• Thursday: TSMC, UnitedHealth, Netflix, American Express, Blackstone, Charles Schwab, Marsh & McLennan, ABB

Equities

• US: US stocks gained Monday, bolstered by temporary exemptions on certain tariffs. The S&P 500 (+0.79%), Dow Jones (+0.78%), and Nasdaq (+0.64%) rose as electronics, notably Apple (+2.2%) and Dell (+4%), benefited from tariff relief. Auto manufacturers, including Ford and GM (+3%-6%), rallied as Trump suggested potential adjustments to auto tariffs. Goldman Sachs (+1.9%) reported strong earnings, lifting financials. Futures edged lower Tuesday morning as investors awaited earnings reports from Johnson & Johnson, Bank of America, Citigroup, and others, cautious about tariff-driven uncertainties.
• Europe: European stocks surged sharply Monday following tariff exemptions from the US. STOXX 50 (+2.4%) and STOXX 600 (+2.6%) advanced significantly, driven by banks and insurers like BNP Paribas and Munich Re (up 4%-6.5%). DAX (+2.85%) and CAC 40 (+2.45%) rose, buoyed by easing trade tensions and the upcoming ECB policy decision, expected to yield a 25-basis-point rate cut. Gains were broad-based, with particular strength in financials and insurers amid improving sentiment and narrowing yield spreads.
• UK: The FTSE 100 gained sharply (+2.14%) Monday amid broader European optimism and hopes for an ECB rate cut. Notable movers included Melrose (+5.1%), Convatec Group (+4.9%), and Standard Chartered (+4.7%). Investors await UK retail sales, labor data, and inflation reports this week, assessing the economic outlook amidst continued global trade concerns.
• Asia: Asian equities mostly rose Tuesday, driven by optimism around tariff exemptions, especially in autos and tech. Japan’s Nikkei (+1%) and South Korea’s KOSPI (+1%) advanced, benefiting from strong performances in automakers like Honda and Hyundai. Chinese markets, however, remained cautious, fluctuating amid continued trade tensions with the US. Hong Kong's Hang Seng (+0.19%) was mixed, with gains in consumer stocks offsetting tech and pharma sector losses. Investors remain focused on forthcoming Chinese GDP and industrial data.

Volatility

Volatility continued to decline, with the VIX down 17.8% to close at 30.89. VIX1D (-47.4%) notably dropped below the VIX, signaling easing short-term anxiety. However, VIX9D remained above VIX, suggesting expectations of potential near-term fluctuations. Futures markets showed continued backwardation, reflecting persistent caution despite declining immediate fear levels. Today’s volatility may be subdued, barring surprises from corporate earnings reports or unforeseen policy updates.

Digital Assets

Cryptocurrencies rose Monday, mirroring equity market optimism. Bitcoin (+1.11%) reached $85,507, and Ethereum (+1.07%) climbed to $1,641. Crypto stocks had mixed performance; MicroStrategy surged (+3.82%) after using common stock sales to acquire additional Bitcoin. Investors closely monitor Bitcoin’s critical $82,024 support level amidst market uncertainty. SEC delays on Ethereum ETF staking approval added cautious undertones to market optimism.

Fixed Income

• US treasury yields dropped back sharply at the long end of the curve after their recent surge, with the 10-year benchmark down near 4.36% after starting the week yesterday at 4.48%. The 2-year benchmark is down some 10 basis points from last week’s close, trading this morning near 3.86% ahead of tomorrow’s US Retail Sales numbers for March.
• Japan’s 2-year government bond yield bounced back 4 basis points overnight to 0.64%. Overnight, Japan’s Finance Minister ruled out adding a supplementary budget measures at this time, saying that the government would only implement the extra budget from last year and the initial budget for the current financial year, which started April 1. The 10-year JGB yield benchmark rose 3 basis points to 1.37% overnight.

Commodities

• Crude prices trade steadily for a second day with gains in stocks and bonds supporting broader risk sentiment and short covering. Not least Brent, which according to the latest COT data had seen a record one-week reduction in the week to 8 April. Ahead of IEA’s monthly ‘Oil Market Report’, OPEC said they still expect to see global demand rise by around 1.3 million barrels per day this year
• Gold remains bid despite a pre-Easter improvement in market risk sentiment, trading just below an all-time high set on Monday at $3245. The yellow metal has rallied by around 23% already this year against the dollar, less against other major currencies, supported by strong demand, not least in Asia, with tariff uncertainty driving growth concerns while weakening the dollar lower.
• CBOT Corn, not gold, is the strongest performing commodity this month, trading up almost 7% at $4.87, supported by strong weak dollar-led export demand, and lower stocks after the USDA recently downgraded both US and global inventories.

Currencies

For a global look at markets – go to Inspiration.