Attorney General Pam Bondi said on Wednesday that the FBI is reviewing “ens of thousands of videos of [Jeffrey] Epstein with children or child porn,” and that there are “hundreds of victims,” as she addressed a question about the delay in releasing the full case files.

“No one victim will ever get released. It’s just the volume and that’s what they’re going through right now. The FBI is diligently going through that,” Bondi told reporters outside the White House, saying that the sheer volume of evidence is the reason more files have yet to be released. 

🚨 BREAKING: AG Pam Bondi says that the FBI is reviewing the Epstein Files.

“There are tens of thousands of videos of Epstein with children or child p*rn, and there are hundreds of victims.”

“No one victim will ever get released. It’s just the volume and that’s what they’re… pic.twitter.com/xxr3lbWwOn

— Eric Daugherty (@EricLDaugh) May 7, 2025

Bondi’s comments come after a very lame ‘Epstein Files’ release in February, in which the DOJ handed out “phase 1” binders to a group of influencers that did not contain any new information.

Epstein, the disgraced pedophile financier who was found dead in a New York prison cell in 2019 while awaiting trial on sex-trafficking charges, is known to have had extensive recording devices throughout his various properties.

200 Alleged Predators Arrested

During the same presser, FBI Director Kash Patel announced that over 200 alleged child sex predators were arrested as part of Operation Restore Justice. 

KASH PATEL: If you harm our children, there is no place we won’t hunt you down—and no cage we won’t put you in.

Under this administration and Attorney General Bondi, child predators are finally being treated like the monsters they are. pic.twitter.com/R78PaayeFs

— Erica Knight (@_EricaKnight) May 7, 2025

The arrests saw 115 children rescued across the US as part of the “historic” and “unprecedented” joint DOJ / FBI operation, Bondi and Patel said.

“These depraved human beings, if convicted, will face the maximum penalty in prison, some life,” said Bondi, adding “We will find you. We will arrest you, and we will charge you. If you are online targeting a child, you will not escape us. The FBI and the Department of Justice will come after you. And we will prosecute you.“

“For the last week, the FBI and DOJ have been quietly surging operations across 55 field offices to take down criminals who target kids,” Patel posted on X.

“Our agents, support teams and partners did excellent work — rescuing 115 children across the country in the process. Their work undoubtedly saved lives and protected vulnerable kids from further horrific crimes.”

*  *  *

Now in stock – 400lb of 80/20 grass-fed, grain-finished beef. 

Authored by Steve Watson via Modernity.news,

MSNBC’s most desperate to stay on the air show Morning Joe brought on a legal expert guest Tuesday who they likely believed would corroborate the latest leftist narrative that “due process” has to be followed in order to deport illegal aliens, but he ended up doing the exact opposite.

Legacy media talking heads are parroting the notion that constitutional law demands full immigration court hearings for all suspected illegal immigrants.

Attorney Danny Cevallos pointed out, however, that this simply isn’t the case.

MSNBC LEGAL ANALYST BREAKS THE TRUTH TO MORNING JOE — ILLEGAL ALIENS ARE NOT OWED DUE PROCESS.

Democrat Media repeated this bullshit about due process for two weeks and never even bothered to look it up and study.

Guess what, Trump is right.pic.twitter.com/pJVXfY9ke8

— Citizen Free Press (@CitizenFreePres) May 6, 2025

“Federal law allows for broader and even speedy removal [of illegal immigrants] and has been used in the past,” Cevallos noted.

He added that “expedited removal as you talked about allows for summary removal. That means there’s no entitlement even to a hearing, possibly within 24 hours.”

“It hasn’t been used as broadly as say the Trump administration might want to use it, but under the status it is permissible to remove aliens who arrive at the border and even those who have been here for two years,” the attorney further emphasised.

Everyone seems to be reciting “due process” as an incantation to a spell. But what exactly IS due process in the context of removals, habeas petitions, and the Alien Enemies Act? My latest on Substack #BriefLegals https://t.co/YAz5AZZ5Qg

— Danny Cevallos (@CevallosLaw) May 5, 2025

Cevallos pointed to Trump advisor Stephen Miller, once again, as the person in the President’s inner circle who has found a way to interpret immigration law in a way that allows deportations without delays of legal proceedings.

“Just because it isn’t used very often doesn’t mean it’s not a part of federal law that can be used, and it will be used because it’s permitted under federal law,” Cevallos urged.

He continued, “The Congress, in its infinite wisdom, decided that aliens who arrive at the border — and they define people who arrive at the border within two years — if they don’t have documents, if they have insufficient documents, they can be removed in an expedited fashion unless they seek asylum.”

all 114 of them

— Tipping Odds Podcast. Mitch 🇺🇸🇮🇱 (@TippingOddsLV) May 6, 2025

MSNBC viewers getting slapped in the face by reality this morning … with Trump being RIGHT

— Long Live Texas! (@TPnTexas) May 6, 2025

They get due process. The process is. We identify who you are. You are here illegally. You are deported. Or you claim assylum, denied. You are deported.

— JRC1729 (@JRC1729) May 7, 2025

Maybe they realized they had better get an expert on before they get sued for lying again and act like they were “partly right.”

— 🇺🇸 Rolan Nyan 🇺🇸 (@TheFrenchiePug) May 7, 2025

Trump told NBC News Sunday that he has been advised not all illegal immigrants are entitled to constitutional protections.

“I’m going to just follow what the lawyers say,” Trump stated, adding “They say that we’re allowed to do that, and I’m all for it. But everything I say is subject to the laws being 100 percent adhered to.”

Trump has deported somewhere in the region of 150,000 illegals so far in his second term. Barack Obama deported over three million, and returned a further two million plus, including entire families. And the same process was employed, using expedited removal through the DHS and ICE.

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Apple Senior Vice President of Services Eddy Cue testified that the company is “actively exploring” a redesign of its Safari browser to prioritize AI-powered search engines, amid potential fallout from its deal with Google, according to Bloomberg.

Cue disclosed these new details Wednesday while testifying in the U.S. Justice Department’s antitrust lawsuit against Alphabet. The case centers on Apple and Google’s $20 billion-a-year deal that designates Google as the default search engine in Apple’s Safari browser.

Cue revealed that Safari search volumes declined for the first time in April, prompting the company to evaluate alternatives. He specifically mentioned Perplexity and Anthropic as potential options.

More from Bloomberg: 

Technology is changing fast enough that people made not even use the same devices in a few years, Cue said. “You may not need an iPhone 10 years from now as crazy as it sounds,” Cue said in a court.

“The only way you truly have true competition is when you have technology shifts. Technology shifts create these opportunities. AI is a new technology shift, and its creating new opportunities for new entrants.”

Cue said that, in order to improve, the AI players would need to improve their search indexes. But, even if that doesn’t happen quickly, they have other features that are “so much better that people will switch.”

“There’s enough money now, enough large players, that I don’t see how it doesn’t happen,” he said, referring to a switch from standard search to AI. Cue also said that large language models — the underlying technology for generative AI — will continue to improve, giving users more reason to switch.

Still, he believes Google should remain the default in Safari, saying that he has lost sleep over the possibility of losing the revenue share from their agreement.

Here are the latest headlines: 

• APPLE’S CUE: LOST SLEEP OVER POSSIBILITY OF LOSING REV. SHARE

• APPLE’S CUE: BELIEVES PERPLEXITY, ANTHROPIC COULD BE OPTIONS

• APPLE LOOKED AT ANTHROPIC, DEEPSEEK, GROK, PERPLEXITY FOR AI

This news sent Google shares sinking as much as 5%.

Apple shares fell to a session low of 1.7%. 

Sliding Apple and Google price action sent US main equity futures lower. 

*Developing…  

Authored by Andrew Korybko via substack,

Everyone has the right to make up their own minds about these tensions and the Kashmir Conflict that lies at their core, but they should also know that there’s more to all this than what they might be led to be believe by the organized pro-Palestinian movement and the Alt-Media Community.

India carried out several surgical strikes against Pakistan on Wednesday morning as part of “Operation Sindoor”, which is its response to last month’s Pahalgam terrorist attack that saw the allegedly Pakistani-affiliated culprits slaughter over two dozen Hindu tourists, who were targeted on the basis of their faith. Casual observers might be overwhelmed by the deluge of information being spread by both sides’ online advocates amidst the resultantly escalating tensions so here are ten points for them to keep in mind:

1. The British Role In Indo-Pak Tensions Is A Relic Of The Past

It’s true that the Indian Subcontinent’s imperfect division between Hindus and Muslims was authorized by the departing British, but the roots of this policy rest in some Muslim independence activists splitting from their Hindu comrades decades earlier to pursue their community’s own interests in this campaign. While the Brits exploited this for post-colonial divide-and-rule purposes, they no longer exert anywhere near the same degree of influence over Pakistan, which has much more independent agency nowadays.

2. Strategic, Religious, & Political Factors Are Behind Pakistan’s Claims

Pakistan’s claims to all of Kashmir are driven by the region’s hydrological importance, its majority-Muslim population, and the military’s interest in rallying the nation behind it on these grounds. These interests are typically ignored by activists in favor of drawing attention to the democratic and humanitarian dimensions of the conflict from the Pakistani perspective. This narrative diversion is meant to make their claims appeal to the widest possible array of people across the world for putting more pressure on India.

3. The Organized Pro-Palestinian Movement Largely Supports Pakistan

In connection with the above, the organized pro-Palestinian movement largely supports Pakistan due to their similar democratic-humanitarian messaging but also out of religious solidarity, though this is only rarely acknowledged due to concerns that it could discredit these movements’ incipient convergence. The reason this is relevant is because casual observers can therefore expect more pro-Pakistani content from pro-Palestinian activists-influencers, including that which disparages India as a “Zionist puppet”.

4. Israel Is Irrelevant To This Conflict No Matter What Alt-Media Claims

The Alt-Media Community (AMC) is mostly favorable to the organized pro-Palestinian movement so its leading voices might amplify the aforesaid allegation even though it’s bereft of truth. Many among their audience want to imagine that every major development across the world is somehow tied to a “Zionist plot”, but that’s not the case with this one. India’s closeness with Israel doesn’t mean that Israel controls it, just like Israel doesn’t control Russia, which is closer to Israel than India is and has been so for longer.

5. The Same Goes For Claims That This Is All About Sabotaging BRICS

Many in the AMC are also as obsessed with BRICS as they are with Israel so casual observers should prepare for a flood of claims about how these tensions are supposedly meant to sabotage BRICS. The reality though is that BRICS isn’t a bloc, in fact, it’s just a talking club that discusses how to accelerate financial multipolarity processes and issues purely perfunctory joint statements every year. It’s therefore just as irrelevant to this conflict, which is driven by side’s conception of national interests, as Israel is.

6. India & Pakistan Accuse Each Other Of Terrorism But Respond Differently

Casual observers might soon hear about how Pakistan accused India of being behind March’s Jaffar Express terrorist attack, which builds upon years-long claims that they might also learn about, yet Pakistan didn’t kinetically retaliate against India like India just kinetically retaliated against Pakistan. This can be interpreted either as Pakistan having made up that claim (and earlier ones) for reasons of domestic political convenience or lacking the military confidence to initiate surgical strikes against India.

7. It’s Worth Recalling January 2024’s Tit-For-Tat Iranian-Pakistani Strikes

Iran and Pakistan carried out tit-for-tat strikes in January 2024 against alleged terrorists before patching up their problems. Even though terrorist attacks have since surged in Pakistan’s Balochistan region, Islamabad no longer blames Iran, let alone bombs what it claims to be terrorists there. This is worth recalling since it suggests that Pakistan either lied about Iran’s ties to terrorists or started ignoring them, with either explanation equivalent to politicizing terrorism, thus casting doubts on its claims about India.

8. Pakistan Consistently Seeks To Multilateralize Its Disputes With India

In contravention of the 1972 Simla Accord, which it recently suspended, Pakistan consistently seeks to multilateralize its disputes with India as a means of rebalancing their power asymmetries. The trade-off though is that some of Pakistan’s partners try to use it against India on this pretext, the partial client state role of which its leadership willingly accepts in exchange for support. This insight directly leads into the last two points for casual observers to keep in mind amidst escalating Indo-Pak tensions.

9. There Are Double-Standards Towards Pakistan’s Nuclear Saber-Rattling

The world united to express disapproval to varying extents of what was popularly portrayed as Putin’s nuclear saber-rattling throughout the course of the Ukrainian Conflict yet few have condemned Pakistan much more explicitly doing the same via its Ambassador to Russia and Defense Minister. These indisputable double standards lend credence to former Indian Ambassador to Russia Kanwal Sibal’s assessment that “Pak is given a pass as if the West and others want India to hear Pak’s message.”

10. Some Forces Might Be Trying To Knock India Out Of The Great Power Game

India’s rapid rise scares the US “deep state’s” liberal-globalist policymaking faction, their European subordinates, China, and some in the Ummah like Turkiye’s Erdogan, the Qatari Emir, and ultra-hardline members of Iran’s IRGC. Just like the West tried to use Ukraine to inflict a strategic defeat on Russia for knocking it out of the Great Power game, so too might the aforesaid six actors be using Pakistan for the same goal against India or to at least contain it to their strategic benefit due to their shared interests.

These points should help casual observers better understand the dynamics behind the escalating Indo-Pak tensions and the Kashmir Conflict that lies at their core. Everyone has the right to make up their own minds, but they should also know that there’s more to all this than what they might be led to be believe by the organized pro-Palestinian movement and the AMC. India’s future as a Great Power and all that entails for the global systemic transition will depend on how it manages Pakistani-emanating threats.

Oil pries pumped and dumped back tro unchanged ahead of this morning’s official inventory and supply data after hopeful (demand) signs of US-China trade talks battled with fearful (supply) signals from OPEC*+.

“There is a fear that the trade negotiations in Switzerland with China could backfire and turn into a demand destruction event,” said Robert Yawger, director of the energy futures division at Mizuho Securities USA. Building market sentiment that a rate-cut is not in the cards anytime soon is also weighing on prices, he added.

Oil has trended lower since late January due to escalating trade frictions and plans by OPEC+ to keep boosting idled supply, but prices have moved away from their lows in the last couple of days.

DOE

• Crude -2.03mm

• Cushing -740k

• Gasoline +188k – first build since mid-Feb

• Distillates -1.10mm

While gasoline stocks built for the first time in 10 weeks, Crude and Distillates inventories drewdown last week…

As Bloomberg’s Alex Longley reports, total inventories of crude and petroleum products, excluding the SPR, climbed for a second week this week, but the buildup was fairly small. The drop in crude and distillates was countered by another increase in natural gas liquids. That said, the pace of NGL builds slowed after bumper increases in previous weeks. 

Despite the ‘drill, baby, drill’ narrative, US crude production slipped significantly over the past couple of weeks…

Source: Bloomberg

Most of that drop was due to rebalancing the weekly numbers against the latest monthly figures published in the latest Short-Term Energy Outlook, which reduced the weekly figure by 81,000 barrels a day. 

The drop in production comes as the number of rigs drilling for oil fell, with four units taken out of operation last week, according to Baker Hughes. That reduced the rig count to its lowest since January.

The decline production should not be a surprise to readers following DiamondBack’s recent warning:

“This will have a meaningful impact on our industry and our country,” Diamondback Chief Executive Officer Travis Stice wrote.

“We believe we are at a tipping point for U.S. oil production.”

WTI is slipping lower this morning, extending losses after the official data…

When will the lower crude prices ripple through to lower pump prices?

And lower inflation (and expectations for all those UMich-responding Democrats).

Though aerial fighting between the nuclear-armed rivals does not appear to be sustained and ongoing at this point, Pakistan has closed its airspace for nearly all flights on Wednesday, in the aftermath of the Indian cross-border strikes which killed at least 26 people – including a 3-year-old girl – and wounded at least 46 other people, Pakistani authorities say based on the latest revised death toll. International carriers have also canceled flights to the region, and access to social media, including X, was temporarily blocked in Pakistan amid the assault. Heavy shelling is being reported along the Line of Control (LOC) separating the historic enemy nations.

The true casualty toll could be higher, as a Pakistani militant chief targeted in the attacks on ‘terror camps’ said 10 of his relatives, including five children, were killed. The Islamist group Jaish-e-Mohammed (JeM) was one of the groups targeted, and its leader Masood Azhar said his older sister, brother-in-law, his nephew and niece are among the dead.

Pakistan says that civilians were harmed and targeted that mosques were hit across six locations in its territory, and so has the right to respond to aggression. Indian has said it attack nine terror sites, but has been careful to stipulate these were non-military locations, and is now seeking de-escalation.

Pakistani Prime Minister Shehbaz Sharif has ordered his armed forces to prepare a plan for “self-defense” with “corresponding actions” in order “avenge the loss of innocent Pakistani lives”. The order was issued after an emergency National Security Commitee (NSC) meeting on Wednesday.

What India has dubbed ‘Operation Sindoor’ is intended to be limited, Indian leaders have said, but it’s highly questionable whether it was a ‘success’ – given that India lost at least one or possibly up to five fighter jets.

The conflict between India and Pakistan has begun.

Israel encouraged India to do this, because it benefits strategically in various ways, that involve Turkey/Iran. It also may be the death nell for China’s belt and road initiative if Syria wasn’t alreadypic.twitter.com/yIh8rRBiac

— Syrian Girl (@Partisangirl) May 7, 2025

Social media images and footage, including issued by AFP, appear to confirm that aircraft were downed but without further clear or verified details:

Pakistani military sources later said they shot down five Indian Air Force jets and one drone in “self-defense,” claiming three Rafale jets – sophisticated multi-role fighters made in France – were among those downed as well as a MiG-29 and an SU-30 fighter.

A local resident and government official told CNN that an unidentified fighter aircraft had crashed on a school building in Indian-administered Kashmir.

“Pakistani officials released a video showing smoke rising from apparent wreckage that officials claimed was one of the downed planes,” Washington Post also writes. “The claims could not be independently verified, and the Indian government had no immediate response.”

While India has hailed the operation an appropriate response to the terror attacks in Indian-administered Kashmir which left 25 Indians and one Nepali dead, New Delhi is assuring the world that it will “retaliate resolutely” if Pakistan strikes back.

But Pakistan could be readying to do just that, as it is now a no-fly zone for the next 48 hours.

According to a regional source, “During, and shortly after India’s strikes on Pakistani terror camps – between 1:05 am IST and 1:30 am IST – all flights to Islamabad and Lahore were diverted to Karachi Airport, where flight ops came under severe stress. Following this, the entire airspace was shut down, except few essential flights.”

Below are some notable quotes from Pakistan’s PM Sharif in his emergency address to the country’s parliament:

• “On April 22, Pahalgam … had a sad incident. Indian media and politicians went on to make false allegations against Pakistan. They tried to show the world that, God forbid, Pakistan is behind this incident.”
• “I said [at the time] Pakistan has no linkages with this incident, and I went on to say that if anyone has any issues, then they should go ahead with an international commission and Pakistan will cooperate so that things could come clear.”
• “Last night, they [India] had, all in all, 80 jets with which they attacked six places in Pakistan, including two in [Pakistani-administered Kashmir].”
• “The Pakistani side was completely ready. …Our jets did not [leave] our airspace.”
• “The moment the Indian side released payloads, we engaged their jets and shot five Indian jets … some of which fell in Indian-occupied Kashmir and one in Bathinda.”

Increasing the state of tensions further, India on Wednesday is holding mock air raid and other emergency drills across dozens of districts near the Pakistani border considered high risk, the Indian Express newspaper reports.

Strike locations via Al Jazeera map:

Below is a compilation of reactions from world leaders via CNN:

• United States: President Donald Trump called India’s military operation against Pakistan “a shame.” US Secretary of State Marco Rubio spoke to the national security advisers from India and Pakistan and urged “both to keep lines of communication open and avoid escalation.”
• United Arab Emirates: The UAE has asked for India and Pakistan “to exercise restraint, de-escalate tensions, and avoid further escalation that could threaten regional and international peace.”
• United Nations: UN Secretary-General António Guterres has “expressed deep concern over Indian military operations across the Line of Control and the international border with Pakistan.”
• Japan: Yoshimasa Hayashi, Japanese chief cabinet secretary, said Tokyo was “deeply concerned this incident could incite retaliation and escalate to a full-scale military conflict” and urged both India and Pakistan “to exercise restraint and stabilize the situation through dialogue.”
• China: China has expressed regret over India’s military action against Pakistan and said it’s concerned about the current developments. “India and Pakistan are neighbors that cannot be moved, and both are also China’s neighbors,” a spokesperson for China’s Foreign Ministry said in a statement Wednesday. China has been trying to improve relations with India as part of a broader diplomatic push to counter pressure from the Trump administration. Pakistan, meanwhile, is one of China’s closest partners and a key supporter of its Belt and Road Initiative.
• Russia: Russia’s foreign ministry said it was deeply concerned about the growing military confrontation between India and Pakistan and called for both countries to show restraint, Russian state media TASS reported. The Kremlin has close relations with both India and Pakistan, but has been historically close to New Delhi, dating back to the Soviet era. Russia is also one of India’s key arms suppliers.
• Turkey: The Turkish Ministry of Foreign Affairs said it was following the developments “with concern,” warning that India’s overnight attacks “raises the risk of an all-out war.” “We condemn such provocative steps as well as attacks targeting civilians and civilian infrastructure.” It added that it echoed Pakistan’s calls for an investigation into the April 22 terrorist attack.

Shelling is reportedly ongoing near the Line of Control (LOC), and social media users have captured daytime explosions in border villages and towns.

CONFIRMED: Pakistan used Chinese long-range air-to-air missile PL-15E against India.

Parts of the missile fell in Hoshiarpur, Punjab, India. Photo (1st and 2nd) provided by Indian media.

The PL-15 has a range of 200-300 km for the domestic version and about 145 km for the… pic.twitter.com/51YXEuFrAv

— Clash Report (@clashreport) May 7, 2025

Meanwhile, Bloomberg observes of regional south Asian markets that “Pakistan stocks slumped as India conducted targeted military strikes against the nation. Shares in India were relatively steady after the strikes.” And the Philippines’ key stock index “gained as much as 1.8% after the country’s central bank chief said further reductions in interest rates were on the table for this year.”

Authored by Zachary Stieber via The Epoch Times,

A federal judge on May 6 blocked the U.S. Department of Education from canceling more than $1 billion in funding that was allocated to help address the impact of the COVID-19 pandemic on primary schools and students.

U.S. District Judge Edgardo Ramos entered a preliminary injunction that prohibits the Department of Education from enforcing its recission of extensions for the funding that had been granted in January by the prior administration.

Education officials also cannot modify the previously-approved extensions without giving the states at least 14 days notice, the judge said.

Congress allocated funds to states to distribute to schools to address problems stemming from the pandemic. The more than $276 billion was distributed to states through an education stabilization fund. Under laws passed by Congress, states had until Sept. 30, 2024, to designate the money, and until Jan. 28, 2025, to access funds to achieve the designations.

States could ask for extensions for the latter deadline, and a number did so. The Department of Education granted extensions to at least 16 states, and Washington, enabling them to access the money through March 2026. 

Education Secretary Linda McMahon informed the states in March that the extensions were being rescinded because additional review had determined they were “not justified” in part because the pandemic is over, although the states could reapply for extensions.

The plaintiffs—New York, Oregon, 13 other states, Washington, and Pennsylvania Gov. Josh Shapiro—said that they were facing being cut off from more than $1 billion if a preliminary injunction was not entered.

In a memorandum in support of their motion for an injunction, they said that the Department of Education’s shift with regards to the extension requests was arbitrary and capricious, in violation of federal law. The change “assumes incorrectly that all [the] appropriations were intended only for use during the pandemic” and “lacks any reasoned explanation,” they wrote.

Lawyers for the government said in response that the actions were not arbitrary and capricious.

“The Department’s actions are not arbitrary, capricious, or contrary to law because recission of the prior extension was within the Department’s discretion and did not conflict with the relevant appropriations statutes,” they said in a brief.

The lawyers also said that the plaintiffs would not be irreparably harmed absent an injunction because they can still reapply for a fresh extension, but have chosen not to do so.

The Department of Justice, which represents agencies in court, did not respond to a request for comment on the ruling by publication time.

New York Attorney General Letitia James, a Democrat, said in a statement that “this is a major win for our students and teachers who are counting on this funding to help them succeed.”

US equity futures are higher while global market are mixed ahead of the FOMC decision later today, following news tariff talks between the US and China will begin, and after a surprise stimulus by China. As of 8:00am, S&P and Nasdaq futures are 0.6% higher (though off the highs) on reports Bessent will meet Chinese Vice Premier He Lifeng in Switzerland this weekend in the first confirmed talks between the two superpowers. Bessent later said on Fox News that the meeting will be more about de-escalation than any sort of big trade deal. In premarket trading Mag7 names and Semis are leading the markets higher while RTY appears to be squeezing into outperformance. Cyclicals are poised for a strong session, too. Overnight China’s PBOC cut its reverse repo rates and lowered lender reserve ratio to help stimulate growth. India conducted military strikes in Pakistan in which Pakistan said it shot down five Indian jets. Attention shifts to the Powell and the FOMC at 2pm which is expected to yield no surprises as the CB preaches patience. Focus during the 2:30pm press conference will be on any commentary on how long Powell intends to wait for further clarity re tariffs/impacts (reminder no SEP). Bond yields are higher alongside a stronger USD which snapped three days of declines as the Taiwan Dollar slid for a second day. Commodities are bid higher led by Ags and Energy; gold/silver are modestly lower after another powerful breakout earlier this week.

In premarket trading, Magnificent Seven stocks are all higher (Tesla +1.3%, Apple +1.2%, Amazon +1.2%, Meta +0.9%, Nvidia +0.6%, Alphabet +0.6%, Microsoft +0.5%). Advanced Micro Devices (AMD) rose 1.6% after Nvidia’s closest rival in AI processors gave a strong revenue forecast for the current period, boosted by demand for high-end computers capable of creating and running AI software. Sarepta Therapeutics plunged 19% after the maker of rare disease treatments cut its net product revenue forecast for the year. Here are some other notable premarket movers:

• Apellis Pharmaceuticals (APLS) falls 13% after posting disappointing 1Q revenue.
• Arista Networks (ANET) declines 5% as analysts note that the company’s forecast is being clouded by a tariff overhang and will prove to be conservative.
• Charles River Laboratories (CRL) rises 15% after the company entered a cooperation agreement with Elliott Investment Management. The company also launched a strategic review.
• Electronic Arts (EA) gains 4% after the video-game company issued annual net bookings guidance that came ahead of consensus expectations.
• Klaviyo (KVYO) climbs 4% after the marketing automation company boosted its full-year revenue forecast.
• Marvell (MRVL) falls 7% after the company narrowed its first quarter 2026 guidance range to be about $1.875 billion within a range of plus or minus 2%, versus the prior range of plus or minus 5%.
• ODP Corp. (ODP) rises 8% after the office products company reported sales for the first quarter that beat the average analyst estimate.
• Oscar Health (OSCR) rallies 21% after the health insurer reported total revenue and adjusted Ebitda for the first quarter that beat the average analyst estimate.
• Porch Group (PRCH) rises 21% after the home-services software company reported first-quarter revenue that beat expectations and raised its full-year revenue forecast.
• Teradata (TDC) falls 5% after the infrastructure software company gave a second-quarter outlook that is weaker than expected.
• Uber Technologies Inc. (UBER) drops 2% after posting weaker-than-expected quarterly gross bookings and slower gains in its rideshare business, raising the possibility of a consumer pullback amid souring sentiment about the economy.
• Vestis (VSTS) tumbles 25% after the uniform services firm issued a revenue forecast for the current quarter that trailed Wall Street expectations. The company also eliminated its dividend in an effort to strengthen its balance sheet.
• Walt Disney Co. (DIS) gains 6% after reporting fiscal second-quarter results that beat Wall Street estimates and raising its outlook for the full year, citing strong performances from theme parks and streaming TV.
• Zeekr’s US-listed shares (ZK) rallies 11% as Geely Auto said it wants to take the Chinese electric vehicle company private.

Today’s highlight is the FOMC decision, where the Fed is expected to do nothing (full preview here): Powell will repeat the message that tariffs pose risks to both sides of the Fed’s dual mandate and they intend to wait for further clarity. While the FOMC appears to be setting a higher bar for rate cuts than during the 2019 trade war, Goldman does not think that high inflation would deter it from cutting if the unemployment rate begins to trend higher as the tariff shock hits the economy (full FOMC preview here).

“The Fed will bang on the same message again: they won’t cut rates, and they will try to push back the moment where they will need to as long as possible,” said François Rimeu, senior strategist at Credit Mutuel Asset Management. “In that sense, there is somehow a disconnect between the market expecting multiple cuts this year and inflation expectations which remain high for the second half of the year.”

Overnight sentiment was boosted after US and Chinese officials announced they will meet this week in Switzerland. Treasury Secretary Scott Bessent told Fox News the meeting will focus on de-escalation rather than reaching a deal, but said the current tariff rates aren’t sustainable. Sentiment was also lifted by a reduction in China’s policy rate, as Beijing unveiled several measures to support its economy. 

“It’s clear that the US and China want to have some sort of de-escalation and the rhetoric has eased a little bit, so the move upwards can definitely continue,” said Justin Onuekwusi, chief investment officer at St James’s Place. The Chinese rate cut is an added positive, showing that “China recognizes the need to prevent a slowdown in growth,” he said. 

In Europe, the Stoxx 600 falls 0.3%, led lower by health care and retail stocks while miners and auto stocks outperform. Pharmaceutical stocks followed their US peers lower after the US Food and Drug Administration named Vinay Prasad, a hematologist oncologist and critic of the Covid-19 vaccine for children, as the next director of the Center for Biologics and Research. Here are the most notable movers:

• Novo Nordisk shares rise as much as 6.5%, the biggest gainer in Europe’s benchmark Stoxx 600 gauge by index points, as some analysts say a guidance cut from the Danish drugmaker was already priced in.
• Ahold Delhaize shares gain as much as 5%, extending recent gains to hit a fresh 2002-high, after the Dutch retailer posted earnings ahead of expectations in the first quarter.
• Sampo shares jump as much as 3.7%, gaining for a sixth consecutive session and hitting a new all-time high, after the Finnish insurer delivered earnings that surpassed expectations in the first quarter.
• Pandora shares gain as much as 5.5% after the Danish jeweler reported a slight first-quarter earnings beat, with US like-for-like sales sequentially accelerating.
• Amplifon shares rise as much as 5.6%, adding to Tuesday’s 6.3% advance following the hearing-aid retailer’s 1Q results, reiterated guidance and expectations for strong French market growth from the second quarter onward.
• Auto1 shares rally as much as 11% to the highest since 2021, after the used car platform raised its full-year guidance for gross profit and adj. Ebitda.
• Pharmaceutical stocks follow US peers lower after Vinay Prasad, a hematologist oncologist and critic of the Covid-19 vaccine for children, was named as the FDA’s next director of the Center for Biologics and Research.
• Sea-freight stocks decline on the prospect of lower shipping rates after President Donald Trump said the US would stop its bombing campaign against Houthis in Yemen.
• Ambu shares slump as much as 13%, the most in six months, as performance by the Danish medical equipment company’s endoscopy businesses disappointed.
• Tomra shares drop as much as 13% following first-quarter results which came in significantly below expectations, with DNB Markets noting in particular “negative deviation” from the firm’s recycling segment.
• BioMerieux shares fall as much as 2.9% as RBC downgrades the French biotech company to sector perform from outperform, saying that risks to margin aren’t fully reflected in consensus estimates.
• Storebrand shares drop as much as 3.8% after the Norwegian insurer and asset manager reported profits below expectations in the first quarter, following a disappointing performance across its most important business lines.
• Fresenius SE shares slipped as much as 1.7% as an in line earnings update with unchanged guidance wasn’t enough to further fuel this year’s rally in the dialysis company.

Asian stocks fluctuated, as Chinese shares pared earlier gains driven by the central bank’s stimulus and a confirmation of trade talks with the US. The MSCI Asia Pacific Index erased a climb of as much as 0.7% to trade little changed, as concerns over trade uncertainties remained. TSMC, Hitachi and AIA Group were the biggest positive contributors, while Sony Group, Alibaba Group and Toyota Motor weighed most on the gauge. While Chinese stocks pared early gains sparked by a cut in interest rates and measures to support the economy, the onshore CSI 300 Index remained among the biggest gainers in the region. Sentiment also got a boost as senior officials agreed to hold trade talks with the US later this week. Prospects for a de-escalation in US-China trade tensions have also raised optimism over trade deals for other countries, helping to lift benchmarks in South Korea, Japan and Australia. Elsewhere, Pakistan stocks slumped as India conducted targeted military strikes against the nation. Shares in India were relatively steady after the strikes. Meanwhile, the Philippines’ key stock index gained as much as 1.8% after the country’s central bank chief said further reductions in interest rates were on the table for this year.

In FX, the Bloomberg’s dollar index rose 0.2% snapping a three-day losing streak; investors see a possibility that the talks will lead to a dialing back of tariffs between the two countries, which could support the dollar. Traders also awaited a Federal Reserve meeting later on Wednesday, where officials are expected to hold interest rates unchanged but could offer clues on this year’s monetary-easing path. The yen is the weakest of the G-10 currencies, falling 0.6% against the greenback as haven assets underperform.

In rates, treasuries fall ahead of the Federal Reserve decision, with losses led by the front-end, extending Tuesday’s late flattening move. US 2- to 7-year yields are 2bp-3bp higher on the day with long-end little changed, flattening 5s30s curve by about 2bp; the 10-year near 4.32% is about 2bp lower than Tuesday’s auction result. The Treasury auction cycle is on hiatus until Thursday due to Federal Reserve policy announcement at 2pm New York time and Chair Powell’s news conference 30 minutes later. Fed policy announcement is widely expected to produce no change in the fed funds target range; traders in recent days have been pushing rate-cut expectations into next year, collapsing SOFR Dec25/Dec26 spreads. Treasury auction cycle concludes Thursday with $25 billion 30-year new issue, following strong demand for the 10-year.

In commodities, oil prices advance, with WTI rising 0.8% and topping $60 a barrel at one stage for the first time in a week. Spot gold falls $57 to around $3,374/oz.

The US economic calendar includes March consumer credit at 3pm. We get earnings from Disney and Uber.

Market Snapshot

• S&P 500 mini +0.5%
• Nasdaq 100 mini +0.6%
• Russell 2000 mini +0.9%
• Stoxx Europe 600 -0.3%
• DAX -0.1%
• CAC 40 -0.6%
• 10-year Treasury yield +2 basis points at 4.32%
• VIX -0.4 points at 24.34
• Bloomberg Dollar Index +0.3% at 1220.28
• euro -0.1% at $1.1353
• WTI crude +0.7% at $59.5/barrel

Top Overnight News

• India conducted military strikes that hit nine targets in Pakistan, which said it shot down five jets in retaliation. New Delhi said it targeted known terror camps, but Islamabad said 26 civilians were killed and called the move an “act of war.” BBG
• US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will travel later this week to Switzerland for trade talks with China led by Vice Premier He Lifeng, seeking to de-escalate a tariff standoff that has threatened to hammer both economies. It will be the first confirmed trade talks between the countries since Trump’s early April tariff announcements. BBG
• Chinese authorities announced on Wednesday a raft of stimulus measures, including interest rate cuts and a major liquidity injection, as Beijing steps up efforts to soften the economic damage caused by the trade war with the United States. RTRS
• The yield gap between 10- and 30-year Japanese government bonds hit a record. BBG
• The UK and the US are close to agreeing a trade pact that would cushion the impact of Trump’s “liberation day” tariffs by granting lower-tariff quotas for British car and steel exports, according to officials in London and Washington. FT
• German factory orders rose 3.6% in March, beating forecasts and signaling strength in the run up to US tariff announcements. BBG
• Traders are betting on a slower pace of Fed rate cuts this year amid economic resilience. Money markets are pricing three quarter-point reductions in 2025, one fewer than at the start of April. BBG
• Watching Biotech: Group down ~8.5% yesterday (3 sigma) following the appointment of Vinay Prasad to be the director of CBER (this is the seat Peter Marks previously held). Biopharma was already heavy to start the week following the Trump pharma tariff commentary on Monday. A lot of focus centering around Prasad’s less industry-friendly views on accelerate drug approvals, negative views on vaccines among other criticisms of the FDA
• A more detailed look at global markets courtesy of Newsquawk

Tariffs/Trade

• China’s Ministry of Commerce confirmed US-China trade talks with Vice Premier He Lifeng to visit Switzerland from May 9th-12th and will visit France from May 12th-16th for economic and financial dialogue.
• Chinese Foreign Ministry (on Geneva talks) says meeting was requested by the US; US should stop threatening if it wants a deal. holding tariff talks with the US before curb’s removal, says, China’s position has not changed.
• US Treasury Secretary Bessent and Trade Representative Greer are to meet with China’s lead representatives on economic matters later this week in Switzerland, while Bessent confirmed he is meeting the Chinese team on Saturday in Switzerland and said they agreed to talk on Saturday and will agree on Sunday what they are going to talk about. Bessent said his sense is this will be about de-escalation and said they have got to de-escalate before they can move forward, as well as noted that the US doesn’t want to decouple from China over textiles and similar goods but does want to decouple over strategic industries. Furthermore, he said trade frictions can go down, Americans can get fairer deals, and everything is on the table.
• Mexico’s agricultural minister said he met with US counterpart Rollins and reached agreements that will be beneficial to both countries.

APAC stocks traded mostly higher as participants digested the PBoC’s announcement to loosen monetary policy and reports of upcoming US-China talks this week but with the gains capped amid geopolitical escalation between India and Pakistan. ASX 200 eked mild gains as outperformance in the commodity-related sectors was partially offset by losses in healthcare and tech, while the top-weighted financials industry was kept afloat post-NAB earnings. Nikkei 225 was underpinned at the open as Japanese markets reopened from the four-day weekend although momentum waned shortly after in the absence of any major pertinent catalysts for Japan. Hang Seng and Shanghai Comp were underpinned following reports that the US and China will meet for talks on Saturday involving US Treasury Secretary Bessent, USTR Greer and Chinese Vice Premier He Lifeng, while there was also encouragement from the briefing by Chinese officials where PBoC Governor Pan announced to cut RRR by 50bps and the policy interest rate by 10bps.

Top Asian News

• PBoC Governor Pan announced to cut RRR by 50bps effective May 15th and to cut the policy interest rate by 10bps effective on May 8th with the 7-day reverse repo rate lowered to 1.40% (from 1.50%) and interest rates on Standing Lending Facility across all tenors lowered by 10bps. Pan stated that the policy rate cut will lead to a Loan Prime Rate cut of 10bps and the RRR cut will release about CNY 1tln in liquidity. Pan also noted that they will cut the personal housing provision fund rate by 25bps and will set up CNY 500bln in re-lending loans for elderly care and service consumption. Furthermore, the total quota of two monetary policy tools to support capital markets will be raised to CNY 800bln and they will lower interest rates on structural policy tools by 25bps with re-lending rates lowered by 25bps effective today, while Pan also stated that China will use multiple policy tools to make dynamic adjustments and will guide commercial banks to lower deposit rates.
• China’s financial regulator said they will expand the pilot scheme to allow insurance companies to invest in stock markets and will take further steps to stabilise the property market, while they will guide financial institutions to maintain steady financing support for the property market, guide banks to provide financing support for foreign trade companies affected by US tariffs and will approve CNY 60bln in long-term insurance funds into the stock market.
• China’s securities regulator said US tariff policy has brought great pressure to China’s capital markets but added that they will consolidate good momentum in capital markets and that China will roll out reform measures for tech boards. Furthermore, they will forcefully promote long-term capital into the stock market and said ample preparations have been made for dealing with external shocks.
• RBNZ Financial Stability Report stated that risks to the financial system have increased over the past six months and while the global economic environment has become more volatile, New Zealand’s financial institutions are in a strong position to support the economy. RBNZ also stated that banks have strong capital and liquidity buffers in place to maintain credit flows even if conditions deteriorate further.
• PBoC says FX reserves USD 3.282tln end-April (prev. USD 3.241tln), gold reserves USD 243.59bln end-April (prev. USD 229.59bln)

European bourses (STOXX 600 -0.3%) opened mostly lower and has traded sideways throughout the morning thus far. There have been a few updates to keep traders busy; 1) US and China are set to hold talks in Switzerland over trade, 2) China announced new easing measures amid global economic uncertainty; the PBoC is to cut its RRR by 50bps and reduce its 7-day reverse repo by 10bps (other measures were also announced), 3) India launched air strikes on Pakistan. European sectors are mixed and with the breadth of the market fairly narrow aside from the top/bottom performers. Autos takes the top spot, lifted by post-earning strength in BMW (+3.5%). Healthcare is pressured as traders react to the FDA appointing Vinay Prasad as its new vaccine chief. Elsewhere, Novo Nordisk (+5%) gains despite reporting a mixed set of Q1 results, cutting guidance and said it would not be conducting a buyback programme in 2025.

Top European News

• German Defence Minister Pistorius is reportedly seeking a drastic increase in German annual defence budget; aims for over EUR 60bln/year in defence spending from 2025, according to Reuters sources.
• Germany’s BaFin says financial institutions are generally currently in a strong position; uncertainty is extremely high and will remain so; possibility that problems in the non-banking sector have an impact on banks cannot be ruled out.
• Germany’s VDMA says March orders +4% Y/Y (domestic -3%, foreign +6%).

FX

• DXY is attempting to claw back some of Tuesday’s losses that were seen alongside a pullback in US yields. Recent optimism has been spurred by news that US and China trade talks are to take place in Switzerland from May 9th-12th. For today’s US agenda, US Treasury Secretary Bessent is due to testify before the House. Thereafter, all eyes will be on the FOMC whereby expectations are for the Bank to stand pat on rates with Fed Chair Powell continuing to note that the Fed is well-positioned to wait for greater clarity before considering altering its policy stance. DXY is currently tucked within yesterday’s 99.17-100.09 range.
• EUR is flat vs. the USD after a session of gains on Tuesday which saw the pair advance from an opening level of 1.1314 to a peak at 1.1381 alongside a softening in US yields. From a domestic perspective, CDU Leader Merz was elected Chancellor in the second-round parliamentary vote.
• JPY the laggard across the majors with USD/JPY back above the 143 mark. The domestic story for Japan is a quiet one as market participants returned from the four-day weekend. USD/JPY has ventured as high as 143.35 but is still some way off Tuesday’s best at 144.27.
• GBP is a touch softer vs. the USD and EUR, giving back some of yesterday’s gains which were triggered by a Reuters report that the EU and UK have agreed to hold annual summits to discuss their relationship. Shortly after, the UK reached a free trade agreement with India, with India set to cut tariffs on 90% of UK imports. Thereafter, reports suggested that the UK is closing in on US trade pact with lower tariff quotas for cars and steel. The totality of the potential deals underpinned Cable sending the pair to a 1.3402 peak before returning to a 1.33 handle; currently oscillating around the 1.3350 mark.
• Antipodeans are both softer vs. the USD and unable to benefit from the PBoC’s decision to cut the RRR by 50bps, the 7-day reverse repo rate by 10bps and other easing measures. From a domestic perspective, NZ published mixed Employment data and a softer-than-expected Labour Cost Index but had little follow-through into NZD.

Fixed Income

• USTs traded without direction overnight but as traders digest the latest US-China trade talk updates and China’s latest monetary policy package, US paper has been coming under some modest pressure. USTs are at the bottom end of a relatively narrow 111-04 to 111-11+ band. Focus for today will be on the FOMC (expected to keep rates steady).
• Bunds were initially firmer, but only modestly so and unable to make a foothold above the 131.00 handle. As such, Bunds are shy of Tuesday’s 131.08 best when Merz failed to become Chancellor in the first vote – but secured the role in a second vote. Similar to USTs, Bunds were pressured in the European morning and found themselves back towards their 130.79 base. Thereafter a strong outing from France saw Bunds bounce back towards a session high of 131.09.
• Gilts opened higher by a handful of ticks given the read across from peers at the time. However, the benchmark then waned in-line with peers but with magnitudes slightly less pronounced; nonetheless, Gilts briefly took out Tuesday’s 92.82 base to a 92.79 low. Before making its way back above 93.00 on a strong auction.
• France sells EUR 12bln vs. exp. EUR 10-12bln 3.20% 2035, 1.25% 2038, 4.50% 2041 OATs.
• UK sells GBP 4.5bln 4.375% 2030 Gilts: b/c 3.23x (prev. 2.95x), average yield 3.977% (prev. 4.142%) & tail 0.4bps (prev. 1.0bps).

Commodities

• Firm trade across the crude complex (albeit with futures recently waning off highs) despite a relatively quiet market, softer Dollar pre-FOMC, and amid modest gains across most equity bourses, with the gains largely facilitated by developments overnight in trade, geopolitics, and with China loosening its monetary policy. WTI resides in a USD 58.94-60.26/bbl range while Brent sits in a USD 62.41-63.25/bbl parameter.
• Spot gold reverted to beneath the USD 3,400/oz level with pressure seen shortly after futures trading resumed as markets were jolted by reports that US and Chinese officials are to conduct talks later this week in Switzerland. Spot gold trades in a USD 3,360.20-3,422.14/oz range at the time of writing vs Tuesday’s USD 3,322.76-3,4335.06/oz parameter.
• Copper futures swung between gains and losses overnight and ultimately declined and remained subdued heading into European hours despite the PBoC’s RRR and policy rate cut announcements, albeit following a short rally since the end of April. 3M LME currently resides in a USD 9,446.95-9,584.08/t range awaiting the FOMC in the absence of macro impulses.
• US Private inventory data (bbls): Crude -4.5mln (exp. -2.5mln), Distillate +2.2mln (exp. -2.7mln), Gasoline -2.0mln (exp. -1.5mln), Cushing -0.9mln.
• Venezuela restarted a key gasoline production unit at its second-largest refinery after being shut down for a year.

Geopolitics: Middle East

• US President Trump said Houthis decided that they don’t want to do this anymore and that he told the military to stop attacks against Houthis, while he added that he is not planning to stop in Israel during his Middle East trip and they are talking to Israeli PM Netanyahu about a lot of things right now. Trump said it is crunch time for Iran and he hopes Iran does what is right, as well as stated that Iran will not have nuclear weapons.

Geopolitics: Ukraine

• Explosions were heard in Kyiv after Ukraine’s air force warned of a missile attack, while Ukraine’s military reported apartments are on fire after a Russian drone attack.

Geopolitics: India vs Pakistan

• An Indian missile attack on Pakistani-controlled territory has killed at least 26 civilians and left 46 injured, Pakistan officials have said, via Sky News.
• India launched ‘Operation Sindoor’ in which it hit terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir, while the Indian army announced that Pakistan violated the ceasefire agreement again in the Poonch-Rajouri area and it was responding appropriately in a calibrated manner. Furthermore, a Pakistan military spokesman noted there were exchanges of fire with Indian troops at multiple places along the ceasefire line in Kashmir and announced that five Indian aircraft were shot down.
• Pakistan’s Army Chief said they will respond to India at the time, place and in a way of Pakistan’s choice, via Sky News Arabia.
• Pakistan Government Security Committee says India has “ignited an inferno in the region”, the responsibility for ensuing consequences shall lie squarely with India. Authorised the military to undertake corresponding action.

Economic Data :

• 7:00 am: May 2 MBA Mortgage Applications, prior -4.2%
• 2:00 pm: May 7 FOMC Rate Decision (Upper Bound), est. 4.5%, prior 4.5%
• 2:00 pm: May 7 FOMC Rate Decision (Lower Bound), est. 4.25%, prior 4.25%
• 3:00 pm: Mar Consumer Credit, est. 9.39b, prior -0.81b

Central Banks

• 2:00 pm: FOMC Rate Decision (Upper Bound)

DB’s Jim Reid concludes the overnight wrap

Feel free to file this under first world problems but after renovating a wonderful but old house 7 years ago, things are slowly requiring maintenance. Roof leaks, paintwork peeling, windows mysteriously cracking, and lights going without obvious replacement bulbs have been the main ones. However over the weekend the tumble dryer “conked out” irrepairably. I grumbled at the cost of a new one, but accepted it, only to find that we built our kitchen area units around the specific size of this tumble dryer and that they now only make bigger ones or far too small ones. So if I want dry clothes from now on we have to redesign the kitchen units and get them remade. As such if you see me over the next few months (or years) don’t be surprised if I’ve refused and just walk around in wet clothes.

As we hit another FOMC day, market sentiment has seen another round trip (unlike my defunct tumble dryer) over the past 24 hours, with the S&P 500 (-0.77%) falling back for a second day as concerns about the economic outlook resurfaced but with futures erasing most of these losses overnight on news that US and China will this week begin talks to de-escalate the tariff standoff. The sides announced talks in Switzerland on Saturday and Sunday, led by Treasury Secretary Bessent and Trade Representative Greer on the US side and Vice Premier Lifeng on China’s. This would mark the first substantive talks between the world’s two largest economies since the prohibitive 125% tariffs were introduced a month ago. Bessent suggested last night that the talks would focus on de-escalation rather than a big trade deal “but we’ve got to de-escalate before we move forward”. China’s Commerce Ministry called on the US to “show sincerity” in the talks. Markets have advanced on the news, with futures on the S&P 500 and NASDAQ +0.60% and +0.66% higher respectively as I type.

Sticking with China, overnight the PBOC announced a package of support measures, including a 10bps policy rate cut, a 0.5pp reserve requirement ratio cut and a expansion of lending facilities for the services and consumer sectors. The moves signal a clear shift towards looser monetary policy in response to the trade shock and have similarities to the PBOC response last September, when China moved to announce a broad set of support measures to address its growth slowdown.

Chinese stocks are leading gains in Asia with the Hang Seng +0.50% after spiking over +2% at the open with the Shanghai (+0.64%) seeing similar moves. Elsewhere, the KOSPI (+0.35%) and the S&P/ASX 200 (+0.48%) are also gaining with the Nikkei (+0.09%) lagging a bit after a holiday. Indian equities have turned slightly positive after being lower earlier post military strikes on Pakistan “terror camps”. Pakistan claimed to have shot down Indian fighter planes in response. Obviously this is an incredibly tense situation with both countries being nuclear powers so one to watch closely. There is an Indian press conference at 10.30am local time where it’s expected they’ll call the action proportionate and will respond to claims Pakistan shot down fighters in response.

In terms of overnight data, the final au Jibun Bank Japan Services PMI for April returned to growth, climbing to 52.4 from March’s flat 50.0. This figure, which surpassed the preliminary 52.2, indicates stronger orders within the service sector, a marked difference from the persistent challenges faced by manufacturers.

Looking back to yesterday’s market losses now, those were in part a reaction to some weak corporate earnings, but investors were also wondering when we’d actually start to see the results of any trade deals, with the S&P 500 initially down over -1% in the first half hour of trading. That was then pared back after Treasury Secretary Bessent said some “very good” offers had been made in trade negotiations by other countries, while the FT reported that the US and UK were close to a deal that would cushion the impact of tariffs by granting lower-tariff quotas for British car and steel exports. There was a brief pop higher just after Europe went home that nearly took back flat for the day on Trump’s quotes over an announcement that will be “as big as it gets” between Thursday and Monday. It’s not clear whether this is the overnight China talks news or whether something else is in the wings. However intriguing this was, the pop soon faded. On top of that, there was more news on the retaliation front too, as Bloomberg reported that the EU were planning to hit around €100bn of US goods with tariffs if the trade talks failed.

This concern was evident across multiple asset classes. For instance, investors priced in more rate cuts from the Fed this year, with the amount expected by December up +5.1bps on the day to 81bps. In turn, that led front-end yields to fall back too, with the 2yr Treasury yield down -4.9bps to 3.78%. The 10yr yield (-4.8bps) was steady until a decent auction helped it rally and close at 4.30%. Lower yields added to a renewed decline in the US dollar, which lost ground against all G10 currencies, though this morning the dollar index (+0.30%) is on course to erase about half of yesterday’s -0.59% decline.

Even as investors were pricing in more rate cuts, inflation concerns again mounted, with the 1yr US inflation swap up +4.9bps on the day to 3.32%. That came as oil prices staged a recovery, with Brent crude up +3.19% on the day to $62.15/bbl, picking up from their 4-year low on Monday, after a major independent US oil producer predicted that US shale production will drop in the coming months. And gold prices (+2.93%) rose to a new record close of $3,432/oz, though they are -1.42% lower overnight following the news of the US-China talks.

Elsewhere, there was plenty happening yesterday in Germany as Friedrich Merz was confirmed as the new Chancellor by the Bundestag. However that doesn’t tell anything like the full story, as in a big surprise, he failed to obtain enough support on the first ballot, which is the first time that’s happened since WWII. In that initial vote, Merz only won 310 votes, short of the absolute majority of 316, despite the fact that the coalition parties hold 328 seats between them. As it was a secret ballot, it was unclear which lawmakers were responsible, and German equities slumped in the aftermath, with the DAX hitting an intraday low of -2.07%. That was even more aggressive for the MDAX of German mid-caps, which slumped to an intraday low of -3.13%. In essence, the fear was that if the coalition couldn’t even confirm their new leader then it would raise doubts over how it could push through the more difficult parts of its policy agenda and govern effectively. However, after initially being told that no second vote could happen before Friday, the situation evolved and Merz was then confirmed with 325 votes in a second ballot, and German equities pared back their losses, with the DAX only closing -0.41% lower. Our economists note that if the new government now swiftly implements its 100-day program with the urgently needed relief measures for the German economy, the fact that it took two attempts to elect a chancellor will quickly fade into the background. However a warning shot has possibly been fired.

Elsewhere in Europe, there was a bit more optimism after the final PMIs came in stronger than the flash readings. So that suggested the economic damage from the tariff uncertainty wasn’t as strong as feared . For instance, the Euro Area composite PMI came in at 50.4 (vs. flash 50.1), and the services PMI was revised up to 50.1 (vs. flash 49.7), putting it back in expansionary territory. So that helped European markets see more of a risk-on move yesterday, with the STOXX 600 only down -0.18%. Strikingly, the UK’s FTSE 100 (+0.01%) just about managed to maintain its longest-ever winning run, having now risen for 16 consecutive sessions. Meanwhile on the rates side, yields on 10yr bunds (+2.3bps), OATs (+2.2bps) and BTPs (+2.5bps) all moved higher.

Looking forward, the main highlight today will be the Fed’s latest policy decision. They’re widely expected to leave rates unchanged, but this is the first meeting since Liberation Day and the subsequent market turmoil, so it’ll be really important to gauge how the Fed are thinking about it and their reaction function. Our US economists think that the overall tone is likely to echo comments from Chair Powell and his colleagues in recent weeks. So he’s likely to emphasise the inflation side of the dual mandate, which could include repeating his comment that the Fed has an “obligation” to ensure tariff-driven inflation does not become more persistent. The signal will be that the labour market needs to weaken for the Fed to contemplate cuts.

In terms of the rest of the day ahead, data releases include Euro Area retail sales and German factory orders for March. And earnings releases include Walt Disney and Uber

A 335.5-meter container ship has been adrift off the U.S. East Coast for more than a week after an engine room explosion knocked out its propulsion system.

“The MAERSK SANA, a containership en route from Newark, USA to Singapore, remains not under command in the Atlantic off Bermuda” after “an engine room explosion disabled her propulsion on April 28,” the ship tracking website MarineTraffic wrote on X.

MarineTraffic provided more clarity on Sana’s status:

“The vessel came to a halt at 13:35 UTC that day and has been drifting ever since. MarineTraffic data confirms no signs of resumed movement, and her remote mid-ocean position has delayed the arrival of salvage assistance. A tug was dispatched from Mexico, according to reports, but with the  Maersk Sana positioned in the middle of the ocean, response time has stretched over days.” 

According to Maersk’s statement, a towage vessel is expected to make contact with the Maersk Sana this week. At the time of the engine room explosion, the 8,450-TEU vessel, built in 2004 and flagged in Singapore, was sailing Maersk’s Transpacific TP11 service. 

“Safety is of paramount importance, and we will take the learnings from our investigation to avoid similar incidents in the future,” Maersk said.

No details were provided about the source of the engine room explosion.

Novo Nordisk shares surged as much as 6.5% in European trading, making it a top performer on the Stoxx 600, as Wall Street analysts said the Danish drugmaker’s guidance cut was largely priced in—and pressures on Wegovy sales from compounded anti-obesity drugs may soon ease. 

Investor sentiment was also buoyed by expectations that Wegovy sales, will rebound in the second half, as the availability of compounded copycat versions declines.

“We have reduced our full-year outlook due to lower-than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the U.S. We are actively focused on preventing unlawful and unsafe compounding and on efforts to expand patient access to our GLP-1 treatments,” Novo CEO Lars Fruergaard Jorgensen wrote in a statement. 

Jorgensen told CNBC in an interview earlier, “Compounders took a part of our business away,” adding, “We now expect that compounding will be knocked off, so to say, and we get that business growth going forward.”

For 2025, NOVO forecasted sales growth of 13% to 21% at constant exchange rates, below the February forecast of 16% to 24%. Operating profit growth is expected to be between 16% and 24%, compared with an earlier estimate of 19% to 27%. 

“The updated sales outlook reflects lower-than-planned penetration of branded GLP-1 treatments in the U.S., impacted by compounded GLP-1s. Novo Nordisk is focused on preventing unlawful compounding and further expanding access in the U.S.,”  Novo explained.  

Novo reported better-than-expected net profit results in the first quarter, coming in at 29.03 billion Danish kroner, ahead of the Bloomberg Consensus estimate of 27.91 Danish kroner. 

Sales of Wegovy rose 85% annually at constant exchange rates to 17.36 billion Danish kroner, missing the estimate of 18.98 billion Danish kroner. 

Some on Wall Street suggest the surge in compounded anti-obesity drug availabilities largely drove the guidance cut. Now, with those formulations beginning to exit the U.S. market as Wegovy-related shortages ease, analysts see a potential inflection point for Novo’s sales in the second half. 

Wall Street commentary (courtesy of Bloomberg):

JPMorgan (overweight)

• The cut to guidance has already been priced into the shares, analyst Richard Vosser writes in a note
• Any share-price weakness today would be a buying opportunity “ahead of the potential for improving Wegovy growth as the compounders exit the US market”

UBS (buy)

• The guidance downgrade was “broadly expected by the market,” analyst Jo Walton writes in a note
• UBS estimates for FY sales and Ebit growth are “well within the new range”

Intron Health (sell)

• Even though the outlook has been cut, Intron’s estimates are “unlikely to change” given they were already below guidance, analyst Naresh Chouhan writes in a note
• The price for Ozempic in the U.S. only fell 5% in 1Q, “which helps explain the 3% beat versus consensus”
• Still, it’s unclear whether “that price is better or that there was a one off”

Morgan Stanley (equal weight)

• The new forecast suggests “meaningful uplift of Wegovy volumes” in 2H, analyst Thibault Boutherin writes in a note
• Sees consensus FY Ebit expectations moving by -6% at the mid- point

BMO (market perform)

• The cut to guidance was likely expected by many investors, but could still pressure the shares, analyst Evan David Seigerman writes in a note 
• The obesity care miss and guidance cut overshadowed a relatively in-line topline performance, as well as a bottom line beat, in 1Q

Barclays (overweight)

• The impact of compounding will be in focus on the call, analyst Emily Field writes in a note
• Wegovy pricing and group profitability when it comes to recent telehealth and CVS announcements will also be in focus

Jefferies (underperform)

• The 2025 outlook cut is “slightly greater than expected,” analyst Benjamin Jackson says in a note
• Sees scope for consensus expectations to be downgraded even further on FX

Signs that the compounded drug threat may be easing gave Novo shares a boost, sending them up as much as 6.5% in European trading. The stock is still down 55% from its peak of 1,000 Danish kroner last summer and now trades at 16 times expected earnings—down from 40 times a year ago.

Paging Goldman’s James Quigley (a Novo super bull) … Is it time to buy the dip?