Morning Brew April 10 2025

Good morning,

As I will be off for the next three days, I have requested Team Orange to calm the markets a little, and it seems to be working.

Joking aside, the change in the tariff policy caused a stunning recovery in beaten-down assets. Donald Trump announced that global tariffs would be lowered to 10% for at least 90 days, while those on China will be raised to 125% immediately. The Dow surged almost 8%, the Nasdaq 12%, and the S&P 9.5%. AUDUSD jumped 3%, Oil +4.6%, and Gold and Silver 3.3% and 4.4%. It was one of the greatest relief rallies in a very long time.

It is unclear what caused the change of mind, but it was likely a combination of pressure from within the US that the tariffs were hurting America the most and the abnormalities in the bond markets, as we also pointed out yesterday. Fox News' Jessica Tarlov stated regarding Trump's tariff pause, the bond market forced him to cave. "He didn't just flinch, he ducked. There are trillions still lost."

The sudden change of policy and sharp market moves call for an urgent SEC investigation into insider trading – let us hope there is someone left. Germany has concluded the coalition talks and is looking to have the new government in place by early May.

Going forward, it will be curious to see how markets digest the change in policy and the fact that the tariffs are now lower than implemented yesterday morning but still massively higher than a week ago:

• Auto, Steel, and Aluminium tariffs are still in place
• The global 10% remains
• China is still hit with tariffs of 125%

Are traders in a glass-half-full or half-empty kind of mood? The Chinese reaction will be of significant importance going forward, and I still expect nervous trading over the next few days at least as details are digested. Longer term, this episode will have caused a massive blow to the US economy, having proven its complete unreliability. Economic data such as the US CPI and PPI will be watched but will not have great significance until we see the first tariff impacts included.

We are getting ready for the Q1 earnings season, and the outlooks the companies present will be met with great interest.

Trade safely!

Thursday, April 10, 2025

- U.S. Core CPI & CPI (March): Critical inflation data release

- Multiple Federal Reserve Officials Speak: Bowman, Schmid, Harker, Goolsbee provide commentary post-CPI data

- China Implements Tariffs on U.S. Goods (34%)

Friday, April 11, 2025

- U.S. Core PPI & PPI (March): Key producer price inflation indicators

- UK Monthly GDP Estimate Released

- Istanbul Mayor Ekrem Imamoglu Appears in Court

 Monday, April 14, 2025

• China Trade data

Tuesday, April 15, 2025

- UK labor data

- France, Canada  CPI,

- Germany ZEW,

- Empire State Manufacturing Survey for April

- Imports and Exports Data for March

 Wednesday, April 16, 2025

- China Retails Sales

- Advance Retail Sales for March

- Industrial Production and Capacity Utilization for March

- Business Inventories for February