The first wave of the trade war shock will arrive this week, with the Port of Los Angeles bracing for disruptions that will ripple through Southern California’s Inland Empire warehouse network and pile new pressure onto the struggling trucking industry. Depending on inventory levels at importers and retailers, high-volume Chinese-made staple goods may soon be disappearing from store shelves or racks at e-commerce warehouses, as 145% tariffs on Chinese goods entering the US have triggered a massive slowdown in trans-Pacific shipping activity. 

Let’s begin with our reporting that started about one week ago:

• “West Coast On Tipping Point”: Los Angeles Port Set For Steep Drop In Traffic

• First Tariff Shock Set To Hit Port Of Los Angeles, With Ripple Effects Across The Broader Economy

• Trade War Shock Looms For Port Of Los Angeles As Goldman Identifies Most-Impacted Products

After a weekend of … 

• All Quiet On The Western Ports… Is This The Calm Before The Trade War Storm?

The latest data from Port Optimizer, a tracking system for vessel operators, shows that scheduled import volumes at the Port of Los Angeles began sliding on Sunday and are expected to worsen through mid-May. The slowdown in shipments from China reflects a lag: from when a Chinese factory halts shipments to when goods complete the trans-Pacific journey on a container ship, typically taking around 30 days or slightly longer.

In a note to clients, Goldman analysts Patrick Creuset, Theodora Beadle, and others published a chart pack highlighting the latest global shipping data.

Two charts stood out, including this one, citing data from the US National Retail Federation showing expected import cargo volumes to plunge over the next two months.

Inventories remain stable for now, but that could change once the trade impacts on imported cheap Chinese junk become widely publicized. 

In a separate report, the Financial Times quoted Hapag-Lloyd, one of the world’s largest container shipping lines, as saying Chinese exporters have canceled about 30% of their bookings out of the world’s second-largest economy because of the trade barriers—the highest in a century—to entering the US market.

Last week, Goldman’s Jack McFerran provided clients with a “China Export Tracker” produced by Trina Chen, head of China research and Asia commodities at Goldman. 

“She has created a tracker and working with 46x corporates with products representing 70% of the China export value to gauge the speed and size of changes as they happen,” McFerran said.

Trina Chen’s export tracker shows clients which products from China are most likely to be impacted if shortages materialize over the next couple of months. 

“Luxury goods are the least likely to be impacted. It’s the high volume staples that are about to dry up,” FreightWaves CEO Craig Fuller wrote on X. He offered good news: “Good news, however, is that food and gasoline are largely unaffected.”

Luxury goods are the least likely to be impacted. It’s the high volume staples that are about to dry up.

Good news, however, is that food and gasoline are largely unaffected. https://t.co/4KZACyMAhz

— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) April 28, 2025

Fuller continued:

China was 2% of global GDP in 1980. Today it is 18%.

The vast majority of the industries that China now leads were created in the United States and Europe, often through the theft of intellectual property by American and European companies.

China would steal our intellectual property, avoiding all the research and development in technology and market research, and then sell us the same products back at a much cheaper price.

China was able to grow its economy so rapidly because of the peacetime dividend afforded by America’s unchallenged superpower status and global policing—the age of Globalization.

That world ended in 2022, and we are now transitioning into a multipolar world, where increased conflict is expected.

The Second Cold War is here, and Supply Chains are the front lines.

China was 2% of global GDP in 1980. Today it is 18%.

The vast majority of the industries that China now leads were created in the United States and Europe, often through the theft of intellectual property by American and European companies.

China would steal our…

— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) April 28, 2025

The takeaway is that the trade war shock for imported Chinese goods is underway. Imported volumes of high-volume staples are likely to crater through the end of June, which may spark shortages. 

The days of choosing from 150 different types of Chinese Bluetooth speakers on Amazon are ending. And, Oh, what a shame for the consumer. Maybe it’s back to a time when there were just a few dozen – and many of those speakers were of great quality – not today’s junk that fuels the ‘plastic throw away culture’. Shouldn’t the ‘green’ activists be all about this?

Authored by Peter Hitchens via The Daily Mail,

In my trade I have long grown used to the way governments lie and get others to lie for them. 

It is what they do.

But I have seldom seen such a cloud of lies as we face now. Hardly anyone in this country knows the truth about Ukraine. 

There has been nothing like it since we were all lied to about the Iraq invasion, with bilge about fictional ‘Weapons of Mass Destruction’. The liars were caught out. 

And they learned from it. They learned to lie more skillfully.

Meanwhile, many of those in our society who knew how to challenge such lies died off or retired and were not replaced.

We have never had a debate about the Ukraine crisis which started from the beginning. Did anyone in power ever tell you truthfully how, when or why this war began? No. Did anyone in power explain why Britain, crime blighted, decrepit, rubbish-strewn, rat-infested, broke Britain, had to get involved in it? Never.

You have just been fed propaganda rubbish about ‘democracy’, freedom and an invented Russian menace. Here are some of the lies you have repeatedly been told.

The war, they say, was not provoked. Seldom in history has a war been more provoked.

Russians, nice ones like the liberal, democratic politician Yegor Gaidar, and nasty ones like the bloody despot Vladimir Putin, begged the West to stop trundling its military alliance, Nato, eastwards towards Russia.

ALL Russians, including the great anti-Communist author Alexander Solzhenitsyn, had been shocked and angered when Nato in 1999 abruptly gave up its defensive posture and launched attacks on Yugoslavia – which had not attacked a Nato member.

These protests reached their peak in February 2007, when Putin made a dramatic speech in Munich. He said Nato expansion was ‘a serious provocation that reduces the level of mutual trust. We have the right to ask: against whom is this expansion intended?’

Look, if someone as gaunt as Putin spoke to you like that in a pub late in the evening, you’d take it as a warning that he was seriously riled. And unless you wanted a fight, you’d back off. But we didn’t back off.

US President George W.Bush, the genius who invaded Iraq, deliberately raised the temperature the following year. Can it be that Bush likes wars?

In April 2008, Bush said that Ukraine should be placed on the path towards joining Nato. Even the Guardian, the Liberal Warmonger’s Gazette, conceded that this was ‘likely to infuriate the Kremlin’. And so it did. I suspect we were on the path to war from that moment.

I am always accused, when I say that, of making excuses for Putin. I am not. 

I think he was stupid as well as wrong to be provoked. Wise men ignore provocations. But to claim he was not provoked is just to lie.

Another lie we are repeatedly told is that Russia attacked Georgia later in 2008. But anyone can find, on the web, a 2009 Reuters news agency story headlined ‘Georgia started war with Russia: EU-backed report’.

The dispatch summarises an inquiry by the respected Swiss diplomat Heidi Tagliavini. She had been asked by Brussels to look into that war. That is what she said. But, somehow or other, a lot of Western media outlets failed to find space for it. I still meet supposedly informed people who have never heard of Ms Tagliavini or her report.

And then there is the claim that this is about democracy and freedom. It isn’t. The more the West claims to care for these things, the less it does to help them.

Some examples: 

Ukraine’s elected president was lawlessly overthrown by a mob in 2014. Britain and the USA condoned this shameful event because they preferred the illegal rebels to the elected government. You just can’t do that and pretend to be the guardian of democracy. But then, we aren’t anyway.

You will search in vain for protests against the treatment of Romania’s presidential candidate, in a country that is in the EU and Nato.

CALIN Georgescu’s election was annulled by judges in December when he looked like winning the first round. And he has been banned from standing in the second round – all because he has the wrong kind of politics. And if that’s not enough, look at the West’s deep, shaming silence over the frightening, thuggish behaviour of Turkey’s President Recep Erdogan.

A few weeks ago, this Turkish Putin arrested and jailed Ekrem Imamoglu, an opposition politician who looked likely to beat him at the polls.

Mr Imamoglu joined the many journalists and democrats who already rot in Turkish prisons.

Erdogan has crushed free media, free speech and the freedom to protest. But his country is still allowed to stay in Nato, and Western states have made less noise than an angry vole guarding its nest. They’re scared of Erdogan.

I won’t even try to explain how Germany recently recalled its old, dead parliament to push through laws the newly elected parliament would not pass. This was done to allow the spending of extra billions on the Ukraine war. But I hope you get my drift.

Demand proper debate. Demand the truth. Don’t be dragged into more stupidity, or we will end up with bomb craters as well as potholes.

*  *  *

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

The ‘soft’ data decoupling from strengthening ‘hard’ data just went to ’11’ as this morning’s Dallas Fed Manufacturing survey results were in a word – atrocious.

While Current Production remained positive, manufacturers in the Dallas Fed region have a dour outlook for business activity ahead (printing -35.3, below the lowest analysts expectation)…

Stagflationary trends persist under the hood as New Orders plunged as Prices Paid surged:

The respondents all had one thing on their minds – tariffs!

• “This has been a crazy few weeks in the news.”

• “There is really no way to predict anything accurately six months out or even six weeks out now for our industry due to the tariff and trade uncertainty.”

• “President Trump, tariffs and maximum business uncertainty [are issues affecting our business]. [We see a] probable recession soon.“

• “There is no stability in business, so it is difficult to plan. “

• “The current economic environment is confusing. President Trump keeps things in turmoil, and we do not know what he will do next. “

• “Tariffs and tariff uncertainty are wreaking havoc on our supply lines and capital spending plans.”

• “Due to tariffs, we do not know what to expect.“

• “There is too much uncertainty all over for any increases [in business] soon.”

• “Tariffs may drive us out of business.”

• “Tariffs. Tariffs. Tariffs. There was a better way to do this.“

• “The tariff issue is a mess, and we are now starting to see vendors passing along increases, which we will have to in turn pass along to our customers. Because of this, we are very concerned about general business activity for the next six to nine months or until these trade agreements get worked out.”

DOGE was also mentioned:

“Chaos at the federal level, tariffs and resulting raw ingredient costs, decimation of partner relationships due to canceled contracts “for convenience” along with stagflation concerns [are issues affecting our business]. 

DOGE [Department of Government Efficiency] is needed.

The DOGE without a follow-up plan does nothing for the domestic tranquility needed (stable arena for business to function within).“

And finally, one respondents reached out to The Fed directly for relief:

“Please lower interest rates. We need it in order to boost the economy due to the uncertainty and tariffs.”

“There is too much uncertainty, including a possible recession. Interest rates are too high. The Federal Reserve always seems to be late for their own party.“

Interestingly, these responses were receiuved AFTER the ‘pause’ on reciprocal tariffs were announced (and stocks rebounded from post-Liberation Day lows).

Huawei Technologies is preparing to test its most powerful artificial intelligence chip, the Ascend 910D, which is designed to replace advanced Nvidia chips in the Chinese market. This comes after six years of U.S. efforts to blacklist Huawei and restrict its access to advanced semiconductors amid a deepening AI race and trade war between the two economic superpowers. 

The Wall Street Journal reported Monday that Ascend 910D’s technical feasibility will be conducted over the next several weeks. People familiar with the new chip said that these processors will be much more powerful than Nvidia’s H100 chips, which are used for training AI models.

However… 

The company’s new chip uses packaging technologies to integrate more silicon dies together to boost performance, said people familiar with the matter. The 910D is power hungry and is less power-efficient than Nvidia’s H100, the people said.-WSJ 

Huawei has shown resilience in the face of Washington’s chip restrictions over the last six years. In 2023, it launched the Mate 60 smartphone powered by a advanced domestically produced chip. By late 2024, Huawei launched the Mate 70, which stunned Washington. 

Here’s more color on Ascend 910D’s development via WSJ’s source:

The development is still at an early stage, and a series of tests will be needed to assess the chip’s performance and get it ready for customers, the people said.

Huawei hopes that the latest iteration of its Ascend AI processors will be more powerful than Nvidia’s H100, a popular chip used for AI training that was released in 2022, said one of the people. Previous versions are called 910B and 910C.

After the Trump administration banned H20 chips in China, Nvidia’s rivals, such as Huawei and Cambricon Technologies, have gained momentum. Huawei plans to deliver over 800,000 Ascend 910B and 910C chips this year to state-owned telecommunications carriers and AI companies, such as TikTok parent ByteDance, according to the sources.

Huawei’s development of advanced chips to rival the Nvidia H20 chip appears to be a win, but the company has encountered production woes by being cut off from the world’s largest chip foundry, Taiwan Semiconductor Manufacturing Co. (TSMC).

Instead of TSMC, Huawei turned to Semiconductor Manufacturing International Corporation (SMIC), a domestic chipmaker that also faces restrictions on acquiring the most advanced chip-making equipment.

Research firm SemiAnalysis commented on the new chip: “Having five times as many Ascends more than offsets each GPU being only one-third the performance of an Nvidia Blackwell … the deficiencies in power are relevant but not a limiting factor in China.”

Meanwhile… 

🚨🇨🇳🇺🇸The Release of Deepseek-R2 is imminent. The US tried to kill off Huawei by launching a huge sanctions package against them in 2019 under Trump’s first term, but it failed. Huawei are about to start trials of their Ascend 910D, and mass production of 910C.

DeepSeek R2: Unit… https://t.co/nog4EzKTV8

— Barrett (@BarrettYouTube) April 28, 2025

. . .  

Authored by Chris Summers via The Epoch Times,

A Houthi-controlled ministry said on Monday that a U.S. airstrike killed at least 68 Africans at a migrant detention center in northern Yemen.

The Yemen News Agency (Saba) said it received a statement from the civil defense department of the Ministry of Interior, reporting that the strike in Saada governorate, a Houthi stronghold, killed at least 68 and wounded 47 African migrants.

The Epoch Times reached out to the U.S. Department of Defense for comment but did not receive a response by publication time.

Migrants from Eritrea, Ethiopia, and other African countries often cross the Bab el-Mandab Strait to Yemen en route to oil-rich Saudi Arabia, seeking work.

Graphic footage broadcast by the Houthi-controlled Al-Masirah satellite news channel showed what appeared to be dead bodies.

The Epoch Times was unable to verify the claims or the footage.

On March 15, President Donald Trump ordered airstrikes on Houthi-held areas in Yemen, vowing to use “overwhelming lethal force” until the Iran-backed terrorists end their attacks on a critical sea lane.

U.S. aircraft have been consistently hitting targets across Houthi-controlled areas of Yemen over the last six weeks in what is known as Operation Rough Rider.

“Since March 15, U.S. Central Command (USCENTCOM) forces have conducted an intense and sustained campaign targeting the Houthi terrorist organization in Yemen to restore freedom of navigation and American deterrence,” U.S. Central Command said in an April 27 statement.

“These operations have been executed using detailed and comprehensive intelligence ensuring lethal effects against the Houthis while minimizing risk to civilians.”

‘Minimizing Risk to Civilians’

“To preserve operational security, we have intentionally limited disclosing details of our ongoing or future operations. We are very deliberate in our operational approach, but will not reveal specifics about what we’ve done or what we will do.”

The statement said Central Command has struck over 800 targets since the start of Operation Rough Rider. These strikes have killed hundreds of Houthi fighters and numerous Houthi leaders, including senior Houthi missile and UAV [unmanned aerial vehicle] officials, according to Central Command.

Iran has supplied drones and drone technology to its allies in the so-called Axis of Resistance, which includes the Houthis in Yemen and the terrorist group Hezbollah in Lebanon.

Both have used drones against Israel, although the Houthis have tended to target shipping in the Red Sea and the Bab el-Mandab Strait.

In Oct. 2024, Central Command sent B-2 Spirit stealth bombers to target underground bunkers in Yemen which it said were used by the Houthis to store missiles and drones.

The Houthi terrorist group draws members from northern Yemen’s Shiite Muslim Zaydi community.

Officially known as Ansar Allah, they have controlled the Yemeni capital, Sanaa, and a swath of territory in north and west Yemen since 2014.

On March 4, Ansar Allah was formally designated a terrorist organization by the U.S. Department of State.

In a statement announcing the designation, the State Department said, “Since 2023, the Houthis have launched hundreds of attacks against commercial vessels in the Red Sea and Gulf of Aden, as well as U.S. service members defending freedom of navigation and our regional partners. Most recently, the Houthis spared Chinese-flagged ships while targeting American and allied vessels.”

On April 18, a U.S. strike on the port of Ras Isa killed at least 74 people and wounded 171 others.

In its latest statement, Central Command said, “U.S. strikes destroyed the ability of Ras Isa Port to accept fuel which will begin to impact Houthi ability to not only conduct operations, but also to generate millions of dollars in revenue for their terror activities.”

Last year, the State Department published a status report on human trafficking in Yemen, part of which country is controlled by the Saudi-backed Republic of Yemen Government (ROYG). The ROYG fought a long war against the Houthis, paused in 2022 after the United Nations brokered a cease-fire.

The report said, “The sustained insurgency by the Houthis continued to be a significant obstacle to the ROYG’s ability to combat all forms of human trafficking, including the recruitment or use of child soldiers.”

Via Remix News,

Vienna’s regional parliament election saw the Austria Freedom Party (FPÖ) achieve a historic success, achieving a second-place result in the traditional left-wing city. The party almost tripled its support to over 20 percent compared to the previous election. The result could further destabilize the Austrian People’s Party (ÖVP), which shunned the FPÖ to form a national government with left-wing parties.

Despite a drop in support, the Social Democratic Party (SPÖ) remained in first place to continue leading the Austrian capital. 

Sámuel Ágoston Mráz, director of the Nézőpont Institute, told Magyar Nemzet that the strengthening of the FPÖ could have a serious impact on the rest of the country, as well as internationally. Coalition negotiations have now begun, and the party leaders have also assessed the results.

🇦🇹 BREAKING: Austria’s right-wing FPÖ party has TRIPLED its support in Vienna.

It is now the 2nd-strong party after city-wide elections, but the left still dominates.

SPÖ: 39.4%
FPÖ: 20.4%
Greens: 14.6%
ÖVP: 9.7%
NEOS: 9.7%
Left Party: 4.1% pic.twitter.com/DV3PoqyrF5

— Remix News & Views (@RMXnews) April 27, 2025

In particular, the ÖVP saw its support in Vienna crater. The chancellor’s party plummeted to 9.6 percent—a drop of 10.8 percentage points compared to 2020. There is already speculation in Viennese party circles about a possible resignation of the 70-year-old city party chairman, Karl Mahrer. Despite the defeat, the People’s Party is determined to govern alongside the SPÖ.

Michael Ludwig, the socialist mayor of Vienna, made it clear in a statement on Sunday evening that the SPÖ remained the strongest party in the elections and that negotiations will begin with several parties about possible cooperation.

🇦🇹 This is now Vienna on a warm day. The Austrian city is often labeled the “most livable” city in the world.

Yet, the Viennese vote overwhelmingly for more mass immigration, even as the city becomes more packed every year.

45.4% of its residents are now of foreign origin. pic.twitter.com/7M7EsfTMTT

— Remix News & Views (@RMXnews) April 27, 2025

“We want to form a stable city and provincial government before the summer,” Ludwig said while ruling out the possibility of a coalition with the FPÖ.

A continuation of the red-green coalition seems likely, but cooperation with NEOS is not ruled out.

On behalf of NEOS, Bettina Emmerling indicated that they would be happy to continue the “progress coalition” with the SPÖ, especially building on cooperation on education policy. The party’s secretary general, Douglas Hoyos, also welcomed the result, highlighting that NEOS achieved almost 10 percent, a historic high for the party in Vienna. 

Judith Pühringer, leader of the Greens, said the party’s themes were in line with the SPÖ’s goals. Werner Kogler, the party’s national chairman, also confirmed that the Greens were ready to actively participate in shaping Vienna’s future.

Although the Austrian People’s Party (ÖVP) suffered heavy losses, party leader Karl Mahrer stated that if the mayor wanted to pursue a policy committed to the political center, economic stability, and social cohesion, the ÖVP was open to negotiations.

The Vienna leader of the Austrian Freedom Party, Dominik Nepp, told broadcaster ORF:

“The huge vote of confidence from the voters has been clearly demonstrated. We have tripled our support. This is a clear sign that people want change. From our perspective, a red-blue coalition would be what many people want. Mayor Ludwig must finally abandon his exclusionary policies. We will consistently monitor the functioning of Vienna!”

Herbert Kickl, national chairman of the FPÖ, also spoke: 

“The strong result of Dominik Nepp and the FPÖ shows that people in Vienna also want change, and change that puts the people back at the center of politics. The people are sovereign, and this sovereign has given a clear signal in Vienna today.”

Read more here…

US equity futures are little changed, reversing earlier losses as much as 0.5%, as global markets are broadly in the green amid a burst of positive sentiment, which even pushed JPM’s recently bearish trading desk to turn tactically bullish this morning (more in a subsequent post). As of 8:00am ET, S&P and Nasdaq futures are down 0.1%, but well off session lows. Nvidia shares fell 1% in premarket after the Wall Street Journal reported China’s Huawei Technologies is getting ready to test a new and powerful artificial intelligence processor that the company hopes can replace some products made by Nvidia; other Mag7 names are mixed with Cyclicals/Semis under pressure and Defensives catching a bid. Europe’s Estoxx advanced 0.5% over early London session with gains led by info tech and consumer staples; Asian stocks were also broadly higher with Japan erasing all post-Liberation day losses.  US equities are focused this week on the tech sector, with Microsoft, Apple, Meta and Amazon all reporting earnings. The week also includes the April US jobs report, due Friday. Bond yields are higher as the curve bear steepens and the USD starts the session stronger. This is a data-heavy week but today’s focus is on regional Fed activity but the key’s this week are NFP, JOLTS, ISM-Mfg, and 25Q1 metrics.

In premarket trading, Nvidia shares slip after the WSJ reported that Huawei is getting ready to test an artificial intelligence processor that the Chinese tech giant hopes can replace some Nvidia products; others Mag7 stocks are Alphabet 0.06%, Meta Platforms +1%, Amazon +0.1%, Tesla +0.8%, Nvidia -1.5%, Microsoft -0.2%, Apple 0.6%. Boeing rises 1.5% as Airbus SE agreed to take over some assets and sites from Spirit AeroSystems, clearing the way for Spirit to be acquired by Boeing. Also, Bernstein upgraded Boeing to outperform, noting that the aircraft maker is now “making the progress it needed for the growth trajectory.” Eli Lilly slips 1.6% after HSBC double downgraded the stock to reduce — a sell-equivalent rating — from buy, saying the drugmaker’s risk-reward “is not attractive.” Here are some other notable premarket movers:

• CG Oncology (CGON) soars 40% after presenting data on cretostimogene grenadenorepvec monotherapy data at the American Urological Association annual meeting.
• Jack in the Box (JACK) rises 4% after Stifel upgrades to buy, saying new CEO Lance Tucker “has created a viable plan to strengthen the balance sheet.”
• Peloton Interactive (PTON) gains 6% after Truist Securities upgraded the fitness company to buy, saying the stock is finally nearing a point where the company’s improving fundamentals should support a recovery in shares.
• Revolution Medicines (RVMD) climbs 5% after presenting initial data from a Zoldonrasib study in patients with non-small cell lung cancer.

US futures posted modest moves as investors awaited reports from American companies worth $20 trillion, including four mega tech names AAPL, AMZN, MSFT and META, and watched for progress in US trade talks with Asian partners. Wild gyrations sparked by Trump’s April 2 tariff announcements have eased somewhat, but investors will be scrutinizing this week’s key company reports for the earnings impact of US trade policies. Fresh readings on the state of the American economy may support hopes of earlier-than-expected Federal Reserve interest-rate cuts. 

Four of the Mag 7, Microsoft, Apple, Meta and Amazon,  are due to report earnings this week. Analysts expect the group to deliver an average of 15% profit growth in 2025, a forecast that’s barely budged since the start of March despite the flareup in trade tensions. In terms of market capitalization, it’s the busiest week of the year for earnings, with S&P 500-listed companies worth $20 trillion reporting.

Investors are also watching for any signs of progress in US trade negotiations after Trump suggested another delay to his higher tariffs was unlikely. Asian economies, facing some of the highest US “reciprocal” tariffs, are leading the way over their western counterparts in talks with the administration.

“Ultimately, it seems that we’re moving towards a place where these policies start to make a little more sense,” Themistoklis Fiotakis, global head of FX strategy at Barclays Plc, told Bloomberg TV. “If this starts shaping up in a place where markets can understand it, can quantify it, then I think that things are going to normalize.”

To help manage the next steps, the Trump team has drafted a framework to handle negotiations with about 18 countries, including a template that lays out common areas of concern to guide the discussions. US Treasury Secretary Scott Bessent said the administration is working on bilateral trade deals with 17 key partners, not including China. Bessent reiterated the administration’s argument that Beijing will be forced to the negotiating table because China can’t sustain Trump’s latest tariff level of 145% on Chinese goods. Its standoff with China will likewise limit the potential benefits the US can reap from deals with Asian trading partners, according to Phoenix Kalen, global head of emerging markets research at Societe Generale SA.

“Already there has been a lot of investor sentiment and positioning for some deals to be done, especially with Japan, especially with South Korea,” Kalen told Bloomberg TV. “But the scope is going to be relatively limited and hampered. The concern especially for Asian trade partners around how China will respond to the terms will limit the extent to which they can agree to certain terms with the Trump administration.”

Meanwhile, Friday’s US non-farm payrolls figures will also turn attention to the health of the American economy. “In general I think this week’s data won’t be too bad for the economy because it really precedes the announcement of tariffs,” Kathy Jones, chief fixed income strategist at Charles Schwab & Co., told Bloomberg TV. “The inflation numbers shouldn’t be too bad. But I’ll really be watching the ISM numbers at the end of the week and of course, the jobs data where we could see some softness.”

The S&P 500’s recovery month-to-date from a 14% drop to -1.5% as of Friday’s close is one of the best rebounds since 1950. Still, the bounce has been too narrow to instill much confidence in a sustainable longer-term rally. Traders may stay cautious as gains have been largely headline and short-covering driven. Volatility is abating but remains elevated. It’s also coming up to the 100-day mark for Trump’s presidency.

In Europe, the Stoxx 600 is set to extend its winning streak to a fifth session as it climbs 0.7%, boosted by M&A news out of Italy as Mediobanca made a €6.3 billion ($7.1 billion) offer for the wealth management arm of Italian insurer Assicurazioni Generali SpA.  Food & beverage, travel & leisure and bank stocks are leading gains while real estate and industrials lag. Here are some of the biggest movers on Monday:

• Deliveroo stock soars as much as 18% to 173p after the food-delivery firm said that DoorDash has made a cash takeover proposal at 180p a share, and it would be “minded to recommend such an offer” to shareholders.
• Traton shares rise as much as 5.5% after the German truckmaker posted first-quarter results, with analysts welcoming a strong order intake.
• Interpump shares rise as much as 4.1% in Milan trading after BNP Paribas Exane analysts upgraded the Italian hydraulics and pumps manufacturer, saying it is “an overlooked M&A story with positive risk/reward.”
• ITV shares drop as much as 3.8% after a report that France’s Banijay Group is working on plans for a takeover offer for the entire broadcaster or its studio arm. Analysts note reports of interested bidders are building, but a deal isn’t a certainty.
• Fraport drops as much as 4.5% after Jefferies downgrades the airport services provider to underperform from hold, saying it’s overexposed to slowing transatlantic and business traffic.
• Nagarro shares fall as much as 16%, to a record low, after the German IT services firm postponed the publication of its full-year results.
• BoneSupport falls as much as much as 6.6% after the company announced its CEO Emil Billback is stepping down after more than seven years in the role.
• Valneva shares drop as much as 20% after French regulators decided to suspend the use of its chikungunya vaccine Ixchiq for people aged 65 years and older.

Earlier in the session, Asian shares also rose as focus shifted to a slew of major earnings from the region, while signs that trade tensions may have peaked, at least for now, helped sentiment.  The MSCI Asia Pacific Index rose as much as 0.8%, adding to last week’s 2.2% gain. Japanese benchmarks outperformed following a report on Toyota Motor Corp. chairman’s proposal to buy out Toyota Industries. Indian shares resumed their climb amid foreign inflows, while Chinese stocks were range-bound as officials reiterated their plan to strengthen support for employment and the economy. The flood of tariff-related headlines has slowed somewhat, and investors are turning their attention to earnings to gauge how Asian firms are prepared to tackle higher levies. The region is facing its busiest earnings week this season, with China’s biggest banks including Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. set to release results. 

“Broadly, we’re seeing some relief positioning as there is some refocusing on fundamentals, which I would say is tariff fatigue,” said Billy Leung, senior investment strategist at Global X ETFs in Australia. On China’s earnings, markets want to see more commentary from corporates on domestic confidence, he added.

In rates, treasuries were cheaper across the curve, with futures extending a drop into the early US session as investors digest news around US trade talks with Asian partners.  US yields were cheaper by 2bp to 5bp across the curve, with intermediates underperforming slightly, flattening 5s30s spread by 2bp on the day. US 10-year yields traded around 4.27%, down 4 bps from Friday’s close; European bonds also decline with bunds lagging by 1bp and gilts outperforming 1bp. Next Treasury coupon auction is scheduled for May 5.  

In FX, the Bloomberg Dollar Spot Index is flat; New Zealand dollar lags G-10 peers and the pound leads gains, rising 0.3% against the greenback.

In commodities, spot gold falls $42 to around $3,278/oz. Oil prices are steady with WTI just below $63 a barrel. 

In crypto, bitcoin rose 1.1% to $95,344.86; ether rose 0.9% to $1,819.53.

Looking at the US economic calendar, it’s quiet – we only have the April Dallas Fed manufacturing activity at 10:30am. Fed officials are quiet due to blackout period. This week also includes JOLTS, consumer confidence, PCE, GDP, ISM manufacturing and April payrolls. Fed’s external communications blackout ahead of the May FOMC meeting started Saturday.

Market Snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.2%
• Russell 2000 mini -0.3%
• Stoxx Europe 600 +0.6%
• DAX +0.7%
• CAC 40 +0.8%
• 10-year Treasury yield +3 basis points at 4.26%
• VIX +0.7 points at 25.51
• Bloomberg Dollar Index little changed at 1226.26
• Euro -0.2% at $1.1347
• WTI crude -0.2% at $62.92/barrel

Top Overnight News

• Trump posted on Truth that “When Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year. Also, massive numbers of jobs are already being created, with new plants and factories currently being built or planned. It will be a BONANZA FOR AMERICA!!! THE EXTERNAL REVENUE SERVICE IS HAPPENING!!!”. Trump also posted that “…this is a crucial week to work on “THE ONE, BIG, BEAUTIFUL BILL,” which will contain Massive Tax Cuts, Strong Border Security Measures, Major Military Advancements, Dramatic Deregulation, Powerful Spending Reforms, and more!”
• Trump will meet with House Speaker Johnson at 2pm ET and will be signing executive orders focused on restoring law and order and securing the homeland at 5pm ET on Monday.
• Mark Carney is seeking a fourth Liberal win in Canada in today’s election. Pierre Poilievre’s Conservatives chipped away at his lead in the final days of the campaign, but surveys still point to a probable Liberal victory. BBG
• Ukraine’s Volodymyr Zelenskiy said he’s hopeful for a lasting peace after talking with Trump, who questioned whether Vladimir Putin genuinely wants to end the war, and floated further sanctions. BBG
• Huawei is developing an AI processor that it hopes may replace some Nvidia products, the WSJ reported. BBG
• Trump’s trade war with Beijing is starting to affect the wider US economy as container port operators and air freight managers report sharp declines in goods transported from China. FT
• The drastic reduction in goods from China hasn’t been felt by many Americans yet, but that’s about to change. By the middle of May, thousands of companies — big and small — will be needing to replenish inventories. Giant retailers such as Walmart Inc. and Target Corp. told Trump in a meeting last week that shoppers are likely to see empty shelves and higher prices. BBG
• China’s top economic officials said the country could do without American farm and energy imports as they vowed to achieve a 5% GDP growth target for the year despite the trade war with the US. FT
• China has rejected US President Donald Trump’s claims that he received a phone call from Chinese leader Xi Jinping. The Trump administration has repeatedly asserted over the past week that the US president had spoken by phone with Xi and trade talks took place. SCMP
• A senior South Korean government official ruled out on Monday that Seoul would agree to a trade package with Washington by the time the country holds a presidential election on June 3, and flagged challenges to reaching a deal even before early July. RTRS

Tariffs/Trade

• Chinese President Xi and US President Trump have not had a call recently, according to China’s Foreign Ministry; says the US and China have not conducted negotiations and consultations on tariffs.
• USTR’s office was reported on Friday to have prepared a framework for staggered reciprocal trade negotiations aimed at streamlining talks with 18 partners on a rolling basis over the next 2 months until the US’s July 8th deadline, according to WSJ.
• US Treasury Secretary Bessent said he had interaction with his Chinese counterpart in Washington last week and thinks the Chinese will see the tariff level as unsustainable and he also thinks there is a path to an agreement with China on tariffs, according to ABC News. It was separately reported that Bessent had met with Japanese Finance Minister Kato on Thursday and held productive discussions across a broad range of bilateral issues including reciprocal trade, while he was said to be encouraged by discussions with South Korean officials that focused on an ‘expanded equilibrium’ which encourages rather than restricts trade.
• US Agriculture Secretary said the US is holding daily conversations with China over tariffs.
• China has reportedly quietly exempted some US-made products from tariffs with Beijing said to have been canvassing companies and waiving duties on US goods in sectors where there is a lack of alternatives, according to WSJ.
• Shein is said to have raised US prices on some items by as much as 377% ahead of tariff increases, according to Bloomberg.
• Fox’s Gasparino posted on X that the Trump Administration would like to roll out trade deals this week, at least the outlines that have been agreed upon, citing sources close to the matter.” However, he also noted there are a lot of moving targets that could delay matters, while the deals on deck include India, Japan and maybe South Korea and Australia, although the White House spokesperson didn’t respond to a request for comment.
• Pershing Square CEO Ackman posted on X that the US could choose to unilaterally pause China tariffs to better facilitate US companies transitioning supply chains out of China, while he believes the US and China are incentivised to take tariffs down to more reasonable levels of 10%-20% as quickly as possible.
• South Korean’s Vice Industry Minister says no chance of reaching an agreement on a trade package with the US before the June 3rd snap elections.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed amid a lack of major catalysts from over the weekend and with a very quiet calendar to start a busy week of earnings results and key data releases including the latest US NFP report. ASX 200 was led higher by outperformance in tech, healthcare and energy, while miners lagged after mixed production updates. Nikkei 225 advanced at the open as participants digested earnings releases and M&A news in which Toyota Motor’s  chairman and founding family made a takeover proposal for Toyota Industries. However, the index has since pulled back from today’s peak after failing to sustain a brief return above the 36,000 level. Hang Seng and Shanghai Comp lagged amid some disappointment from Beijing’s press conference on policies and measures for stabilising employment, ensuring stable growth and promoting high-quality development which was conducted by the deputy heads of government agencies and the PBoC and lacked any major concrete policy measures. Japan’s TOPIX Index erases all losses since the April 2nd US tariff announcement.

Top Asian News

• China held a press conference about policies and measures on stabilising employment, ensuring stable growth and promoting high-quality development which was attended by deputy heads of Chinese government departments and the PBoC.
• PBoC Deputy Governor said China will cut RRR and interest rates at an appropriate time, as well as guide financial institutions to guarantee financing demand for foreign trade firms. Furthermore, the PBoC is studying plans to enrich policy kits and will roll out new policies when needed, while it will boost financing support for private firms, allowing private firms to issue more debts.
• MOFCOM Vice Minister Sheng said China will further improve the second-hand car markets and will smooth consumption of used car market this year, while China will push the expansion of healthcare and childcare services and actively expand imports.
• China NDRC vice chief said will closely monitor domestic and external changes and improve policy toolkits, while they will unveil new policies based on changes in the economic situation and some new policies will be rolled out in Q2.
• China’s Finance Minister said China will adopt more proactive macroeconomic policies to promote the realisation of the growth target and that China is willing to further open up its super large markets to the world to achieve mutual benefits.
• China’s Cabinet passed the draft law of China’s medical security and will submit it to the NPC Standing Committee for deliberation, while it also approved the Sanmen nuclear power plant in Zhejiang province.
• China issued a notice on further improving tax refund policies for foreign tourists to boost inbound consumption and will promote the expansion of tax refund stores at shopping centres, scenic spots, airports and hotels.
• Chinese President Xi said China will use various policies to support development, while he urged for the healthy and orderly development of AI.
• China’s top market regulator said regarding a media report of separating the Panama Port from the CK Hutchison (1 HK) deal, that they are paying close attention to the transaction and will review it in accordance with the law. Furthermore, the regulator said parties to the transaction must not use any means to avoid a review.
• TikTok owner ByteDance plans to enter online shopping in Japan as it seeks to expand outside of the US.
• Huawei approached some Chinese tech companies about testing the technical feasibility of the new chip called Ascend 910D, according to WSJ.
• Rumours were circulating in social media that DeepSeek’s R2 AI model is nearing release which is set to feature double the parameters of R1.
• Following the Politburo statement on Friday, which flagged further interest rate cuts, a Reuters source close to the PBoC said it was in no rush to trim rates as the impact of tariffs is still unclear.
• BoJ Quarterly Schedule of Outright Purchases of JGBs: pace maintained for May.

European bourses (STOXX 600 +0.4%) opened modestly firmer across the board, and have traded rangebound throughout the morning thus far given limited fresh macro drivers. European sectors hold a strong positive bias, but with the breadth of the market fairly narrow. Food Beverage & Tobacco takes the top spot, joined closely by Autos. Real Estate sits at the foot of the pile, given the relatively higher yield environment today.

Top European News

• BoE Governor Bailey and US Treasury Secretary Bessent held discussions on financial markets and the regulatory environment.
• ECB’s Centeno said uncertainty is dominating economic analysis which was largely being caused by US trade policy.
• ECB’s Kazaks urged cautious steps and said the ECB should only lower interest rates into accommodative territory if the growth outlook continues to deteriorate much further, according to Bloomberg.
• ECB’s Knot said the ECB June meeting is going to be really complicated, according to European press cited by Bloomberg.
• ECB’s Simkus said the ECB may have to cut rates a couple of more times as US tariffs weigh on economic growth and as inflation continues to slow, according to Bloomberg.
• ECB’s Villeroy says he “does note see any extra inflation for Europe; says we still have margin for rate cuts in Europe”.
• ECB policymakers reportedly are becoming increasingly confident about a rate cut in June although there is little to no appetite for a big move, according to six sources cited by Reuters. It was also reported that the central bank established a task force to simplify banking regulation.
• SNB adjusts the remuneration of sight deposits; lowers the threshold factor to 18 (prev. 20), effective June 1st.

FX

• A choppy session for the Dollar, but ultimately flat on spot month end in what has been the quiet before the storm in terms of news flow thus far, with the rest of the week packed with risk events including the first look at Q1 USD GDP and the US labour market report. There was minimal major and new tariff news, but US consumers may soon feel the impact (e.g. Shein raising prices by up to 377%, logistics slowdown in air freight and imports). DXY currently resides in a relatively tight 99.46-99.84 range.
• EUR is subdued, albeit marginally, against the backdrop of a string of relatively dovish ECB rhetoric, whereby policymakers are becoming increasingly confident about a rate cut in June. EUR/USD resides in a 1.1330-80 range.
• Flat trade for the JPY amidst a lack of major updates over the weekend. US Treasury Secretary Bessent met with Japanese Finance Minister Kato on Thursday and held productive discussions across a broad range of bilateral issues including reciprocal trade. USD/JPY resides in a 143.29-143.90 range.
• GBP is slightly firmer in a quiet session thus far to start the week. In terms of UK trade headlines, UK Chancellor Reeves said she met with US Treasury Secretary Bessent, says the goal is reaching an agreement that is in both their national interests. GBP/USD trades in a 1.3280-1.3346 range.
• Antipodeans are lower intraday amid the cautious risk tone alongside ongoing tariff uncertainty between the world’s two largest economies, whilst domestic updates have been light. AUD/USD dipped under Friday’s trough in a 0.6369-0.6406 intraday range.

Fixed Income

• USTs are contained, but do hold a downward bias. Newsflow on the tariff/trade front included indications of a potential path to a US-China agreement, however, specifics have been light with major catalysts ex-geopols a touch light. Amidst this, USTs find themselves in a thin 111-14+ to 111-22+ band. Ahead, the docket is focussed on the Dallas Fed Manufacturing Business Index before the Treasury Financing Estimates ahead of Wednesday’s Quarterly Refunding.
• Bunds are in-fitting with USTs and as such are also in a relatively modest 131.32 to 131.76 band. Developments for the bloc, ex-earnings, have been light. The slight underperformance seen in EGBs vs USTs/Gilts is likely a function of some concession into upcoming EZ supply where over EUR 5bln is expected to be sold across three lines. On the ECB front, Reuters reported that officials are increasingly confident on a June move, though there is little/no appetite for a big move.
• Gilts are essentially unchanged in a very narrow 93.10 to 93.33 band. As above, updates light as we await further details on the meeting between US Treasury Secretary Bessent and BoE Governor Bailey, a discussion on regulation and financial markets which was reported as being “good”.

Commodities

• Crude benchmarks have been trading very choppy on either side of the unchanged mark, as traders digest the latest US-Iran talks and Ukraine peace talks. On the former, talks are reportedly progressing, but there is still a lot of work to do. WTI and Brent trade at USD and 63.50 and 65.70/bbl respectively.
• Gold is softer, and underperforms within the metals space in a continuation of the sell-off from record highs, printed Tuesday at USD 3500/oz, currently, the yellow metal is trading either side of the USD 3,280/oz mark, with eyes on the USD 3300/oz mark, a level which it retreated from overnight.
• Base metals are mixed, given the flimsy risk tone and after China’s press briefing on policy underwhelmed. 3M LME Copper sits in a busy USD 9,316.15-9,402.85/t range.
• China is stockpiling oil amid Trump tariff shocks impacting crude prices as imports of crude to China surged in March and continued to accelerate in April with imports at nearly 11mln BPD vs 8.9mln BPD in January, according to FT citing Kpler data.
• China Q1 gold consumption fell around 6% Y/Y to 290.5 metric tons and gold production rose 1.5% Y/Y to 87.2 metric tons, according to the China Gold Association.

Geopolitics: Middle East

• Israel’s Defence Minister said Israel conducted an attack on a site in Lebanon’s capital of Beirut which stored precision missiles.
• Qatar’s PM said he saw some progress in Thursday’s Gaza talks.
• Iran’s Foreign Minister Araqchi said the next round of nuclear talks with the US could occur next Saturday with the venue to be decided by Oman, while he added that both sides are showing seriousness and determination. Furthermore, a senior US official said the third round of nuclear talks with Iran were positive and productive with progress made on getting a deal but noted there is still much to do.
• Oman’s Foreign Minister said US-Iran talks will continue with a further high-level meeting provisionally scheduled for May 3rd and core principles, objectives and technical concerns were all addressed in US-Iran talks on Saturday.
• Israeli PM Netanyahu called for the complete dismantling of Iran’s nuclear programme, insisting that any deal with Tehran must also address its ballistic missile capabilities, according to AFP News Agency.
• A huge explosion at a key Iranian port killed at least 40 and injured around 800 others. It was separately reported that an Iranian Defence Ministry spokesperson said there was no military material in the port affected by the blast, while – Russia will send several planes to Iran to help extinguish the fire at Iran’s port.

Geopolitics: Ukraine

• US President Trump met with Ukrainian President Zelensky at the Vatican for 15 minutes which Zelensky’s staff said was constructive, covered a lot of ground and they agreed to meet again, while the White House said the meeting was very productive.
• US President Trump said the meeting with Ukrainian President Zelensky went well and we’ll see what happens in the next days, while Trump is very disappointed with Russia and wants Russian President Putin to stop shooting and reach a deal. Furthermore, Trump said the confines of a deal are there and that Zelensky is calmer now and wants to make a deal, while it was separately reported that President Trump said he thinks Ukrainian President Zelensky is ready to give up Crimea, according to Al Arabiya.
• US President Trump said there was no reason for Russian President Putin to be shooting missiles into civilian areas, cities and towns over the last few days which makes him think that Putin doesn’t want to stop the war and is just ‘tapping’ him along, while Trump added too many people are dying and this has to be dealt with differently through banking or secondary sanctions.
• US Secretary of State Rubio said Russia and Ukraine are generally closer to a peace deal than in the last three years and a peace deal needs to happen soon, while he added that the US has options to hold responsible those that don’t want a Ukraine peace deal, according to NBC.
• Russian President Putin confirmed Russia’s readiness to negotiate with Ukraine without preconditions during a meeting with US envoy Witkoff, according to IFAX.
• Russian President Putin said Kyiv’s adventure in the Kursk region completely failed and Chief of General Staff Gerasimov said Ukrainian saboteurs in Russia’s Belgorod region have been liquidated. Furthermore, Russia’s military commander told Russian President Putin that scattered remnants of Ukrainian forces in Russia’s Kursk region will be destroyed soon, according to RIA.
• Russian Foreign Minister Lavrov said Russia will continue to target sites used by Ukraine’s military, foreign fighters and military instructors sent by Europe, while he added that Russia would be willing to store Iran’s enriched nuclear material if both the US and Iran believe that was useful.
• Ukrainian military said Moscow’s assertion it has ended Ukraine’s incursion into the Kursk region is not true and operations inside Kursk continue, while its forces are still on active operations in the Belgorod region.
• French President Macron said he had a very positive exchange with Ukrainian President Zelensky and that Ukraine is ready for an unconditional ceasefire, while the coalition of the willing will continue working on a ceasefire and lasting peace in Ukraine.
• German Defence Minister Pistorius said US demands for Ukraine to cede territory to Russia are going too far.
• North Korea confirmed troop deployment to Russia and said it will faithfully implement its agreement with Russia, according to Yonhap. Furthermore, South Korea said North Korea’s confirmation of Russia troop deployment is an admission of a criminal act and the US State Department noted it is concerned by North Korea’s direct involvement in Russia’s war in Ukraine, while it added that North Korea’s military deployment to Russia and any support provided by Russia to it in return must end.

Geopolitics: Other

• US President Trump said American military and commercial ships should be allowed to travel free of charge through the Panama and Suez Canals, while he asked Secretary of State Marco Rubio to immediately take care of and memorialise this situation.
• India test-fired missiles on Sunday as tensions rise with Pakistan following the Kashmir attack.
• China’s move to claim sovereignty over a disputed reef in the Spratly Islands by planting a flag triggered a stand-off with the Philippines in which the latter sent navy, coastguard and maritime police officers to Sandy Cay and two neighbouring sandbanks to uphold its sovereignty, rights and jurisdiction and displayed the national flag there, according to FT.

US Event Calendar

DB’s Jim Reid concludes the overnight wrap

It was a joyous but painful weekend as Liverpool won the Premier League for only the second time in my adult life but I broke a toe cooking the kids’ dinner! Given you’re no doubt wondering how, I basically caught my right little toe on the kitchen island as I was walking round it. It was extremely painful and ballooned up to nearly the size of a golf ball.
While trying to take my mind off the pain, this week will be the first for a while where data and earnings will compete with tariff headlines as it’s a bumper week on this front. In terms of data the main highlights in the US are payrolls (Friday), core PCE inflation and US GDP (Wednesday), ISM manufacturing (Thursday) and the latest JOLTS and consumer confidence tomorrow. In Europe flash CPI numbers get released from Spain tomorrow, Germany, France and Italy on Wednesday, with the Eurozone aggregate on Friday (our economists’ preview is here). On Wednesday, Q1 GDP reports are due for Germany, France, Italy and the Eurozone. In Asia, the focus will be on the BoJ meeting (Thursday – our preview here) and April PMIs in China (Wednesday).

An avalanche of corporate earnings will centre around results from Microsoft and Meta on Wednesday and Apple and Amazon on Thursday. This will contribute to a whopping 40% of S&P 500 market cap reporting this week. It’s fair to say that these Mag-7 earnings will go a long way to dictating the tone of the week. As I mentioned last week remember that before Liberation Day the main theme bubbling in the background was the Mag-7 underperforming due to DeepSeek, worries about extreme levels of Capex needed to power AI forward, valuations and a disappointing Q4 reporting season around the end of January. Three months on we’ll see what earnings look like.

Elsewhere we see the federal election in Canada today. Remember the ruling Liberal Party were frequently 25pp behind in the polls in early-mid January even after Trudeau had announced his resignation as leader. However after the “51st state” rhetoric and aggressive tariffs, the rally round the flag movement has propelled the Liberals into a 3-4pp lead in current poll of polls which if replicated today would likely give them a small majority. So a remarkable turnaround. Elsewhere in politics, Wednesday will mark President Trump’s first 100 days in office. So expect lots of reflections on this landmark. The UK holds local elections on Thursday with the main point of interest being how well the populist Reform Party does given they have recently edged ahead of the ruling Labour Party in national polls.

So its fair to say its a busy week. Let’s go into more detail on some of the main data points. Firstly, in terms of payrolls, our economists forecast that headline (+125k forecast vs. +228k previously) and private (+125k vs. +209k) payrolls will mean revert after a strong March, particularly within the leisure/hospitality and retail sectors. Our econ team point out that March and April can get whipped around due to the timing of Easter and school spring breaks. Unemployment should remain steady at 4.2% though.

Wednesday’s advance Q1 GDP will be interesting as the consensus suggests only +0.4% annualised growth in the quarter (+1.1% expected at DB vs. +2.4% in Q4) so that will raise some concerns if it materialises. At the same time we see March personal income (+0.5% DB vs. +0.4% last month) and spending (+0.6% DB vs. +0.4%) data. This will also contain the latest reading on the core PCE deflator (+0.1% vs. +0.4%) which is expected to be on the softer side this month. This will be welcome but remember this is all largely pre-tariffs.

The day by day week ahead is at the end as usual, including the highlights from a busy week for earnings on both sides of the Atlantic. One final thing to note is the US Treasury’s updated borrowing estimates (today) and the subsequent refunding announcement (Wednesday). This normally gets released without too much fuss but remember that in Summer 2023 (end July/early August) this quarterly announcement helped cause brief but great stress in markets due to higher than expected borrowing and more long-dated issuance. Since then the Treasury has managed the process with a view to minimising market fears but in an era of large borrowings these events are always worth keeping an eye out for. Our strategists’ preview and forecasts are here.

Asian equity markets are mixed this morning with local markets mostly higher but US futures notably lower. As I check my screens, the S&P/ASX 200 (+0.81%), the Nikkei (+0.51%) are comfortably higher with the KOSPI (+0.15%) seeing more minor gains. Chinese equities are mostly trading around the flatline but S&P 500 (-0.52%) and NASDAQ 100 (-0.60%) futures are lower.

Recapping last week now and markets put in a strong performance thanks to several factors. First, Trump signalled that he wanted to make a deal with China, and he said that tariffs on China could fall “substantially” from the 145% level at present. Second, Trump rowed back on his previous criticisms of Fed Chair Powell, saying that he had “no intention” of firing him, which reassured investors concerned about central bank independence. And third, there were increasing signs that the US economy was still holding up relatively well in the circumstances, as data like the weekly jobless claims and the April flash PMIs weren’t signalling a recession.

Against that backdrop, the S&P 500 recovered +4.59% over the week (+0.74% Friday) to close at its highest level since Liberation Day. In fact, the latest moves now leave the index just -2.57% beneath its level on April 2. That move was supported by a very strong performance for the Magnificent 7, which surged +9.17% (+2.86% Friday). And that strength wasn’t just confined to the US, as last week also saw gains for the STOXX 600 (+2.77%), the Nikkei (+2.81%) and the MSCI EM index (+2.67%).

That easing in market stress was evident from several other indicators last week. For instance, US HY credit spreads tightened for a third consecutive week, falling -38bps (-8bps Friday) to 360bps. US real yields also fell back, with the 10yr real yield down -12.3bps (-4.8bps Friday) to 1.97%, closing beneath 2% for the first time in over two weeks. In addition, the VIX index of volatility was down for a third consecutive week, ultimately falling -4.81pts (-1.98pts Friday) to 26.33pts, marking its lowest closing level since Liberation Day.

With the more positive headlines on tariffs and the economy, US assets more broadly began to stabilise, including the US Dollar itself. That saw the dollar index finally post a modest weekly gain after 4 consecutive declines, up +0.24% (+0.09% Friday). Similarly, US Treasury yields moved lower, particularly at the long-end of the curve, and the 10yr yield fell -8.9bps over the week (-8.0bps Friday) to 4.24%, marking its second consecutive weekly decline.

Justin Trudeau’s far-left regime in Canada has finally come to an end as the politician exits leadership in disgrace.  His legacy includes authoritarian governance during the pandemic, whereby he threw Christian church goers and pastors in prison for refusing to stop congregations.  He called for mass forced vaccinations, and he locked the bank accounts of protesters speaking out against the covid mandates.  His admin compared people donating to the cause to “terrorists”. 

His socialist economic policies helped to exacerbate Canada’s inflation crisis and his open immigration policies greatly expanded the the flood of third-world foreigners, driving up housing prices, crushing the labor market and straining social services.  By most accounts, the majority of Canadians were ecstatic to see Trudeau exit the stage. 

But what if they still haven’t learned their lesson?  How is that even possible?

According to recent polls for the 2025 election set for April 28th, it is likely that Canadians have very short memories or they’re gluttons for punishment.  Why?  Because Mark Carney and the Liberal Party are projected to make considerable gains.  Carney has rebranded himself as a “centrist” in order to win public favor, but nothing could be further from the truth.  Mark Carney is, in fact, worse than Trudeau on every level.

What should Canadians expect under a Carney regime?  More mass immigration, not less.  Higher inflation and a suffocating housing market.  Increasing political and economic tensions with the US, which Canada is dependent on for 75% of its export market (and there is no replacement).  Policies pressuring Canadians into a cashless system.  The detrimental institution of carbon controls and climate change rules for industry and energy.  And, even less national sovereignty as Canada is made more beholden to the EU.

Lets start with immigration…

While Carney claims he wants caps on immigration, his advisor choices suggest Canadians will get more of the same.  The central banker has tapped Mark Wiseman, co-founder of the Century Initiative lobby group as part of his policy council.  The Century Initiative under the former BlackRock executive publicly endorsed the Trudeau government’s moves to take in 500,000 new immigrants per year by 2025. 

It should be noted that as Canada increased immigration their economy suffered exponential decline. Between 2015 and 2024, Canada’s ranking in the Human Development Index plummeted from 9th to 18th, while the country fell behind Italy in the average growth of real GDP per capita.  Canada’s housing market and social services are essentially broken.

And how about individual freedom?

It’s no secret that the Liberal Party widely supported the lockdowns and mandatory vaccinations.  However, where did Carney stand on the issue?  

Carney acted as an “informal adviser” to Trudeau throughout the covid event and supported the mandates wholeheartedly.  In an opinion article for The Globe And Mail titled ‘It’s Time To End The Sedition In Ottawa By Enforcing The Law And Following The Money’,  Carney wrote in reference to the Trucker Protests against the mandates:

“No one should have any doubt…This is sedition. That’s a word I never thought I’d use in Canada. It means incitement of resistance to or insurrection against lawful authority.” 

“The constant blaring of horns at all hours, the harassment of people, the culture of fear have been making residents’ lives hell, will bankrupt our businesses and if left unchecked would help achieve the Convoy’s goal of undermining our democracy…Anyone sending money to the Convoy should be in no doubt: you are funding sedition. Foreign funders of an insurrection interfered in our domestic affairs.”  

These are the words of an authoritarian, using “democracy” as a cover to institute a sweeping crackdown on public freedoms. 

Where does Carney stand on the economy?

Mark Carney is a long time Davo elitist, and as such he is an adherent of Klaus Schwab’s “4th Industrial Revolution” theory and the concept of the “Great Reset”.  Specifically, Carney is an avid champion of the WEF’s climate change agenda and their efforts to make “climate consciousness” inseparable from business culture.  Meaning, Carney will undoubtedly bury Canada in climate controls and carbon taxes, snuffing out their industry and energy base just as the globalists have been doing in Europe.   

Furthermore, Carney is deeply involved in the push for national and global Central Bank Digital Currencies (CBDCs).  In his 2021 book ‘Values”, Carney calls for revolutionary centralization of the global monetary system and the launch of CBDCs as the new standard.  He has actively campaigned against cryptocurrencies like Bitcoin and any form of decentralized money, claiming instead that the future requires a global digital currency to replace the dollar system (NOTE: Carney did not come up with this idea, this has been a ongoing plan within the BIS and IMF for decades).

“If properly designed, a CBDC could serve all the functions to which private cryptocurrencies and stablecoins aspire while addressing the fundamental legal and governance issues that will, in time, undermine those alternatives…”

At bottom, Carney is calling for a cashless society controlled by the banking oligarchy.  Without cash or an independent form of trade, all personal economic freedom dies.  Carney licks his chops over this prospect when he states (in reference to the covid crisis):

“With fear on the march, people were willing to surrender to Hobbes’ ‘Leviathan’ such basic rights as the freedom to leave their homes. And so it is with money. People will support the delegation to independent central banks of the tough decisions that are necessary to maintain the value of money provided the authorities deliver monetary and financial stability…”

This is not the man Canadians should be voting for if they have any interest in changing the current Orwellian path their country is on.  Critics claim that it’s Donald Trump’s tariffs that are to blame for the shift in the polls in Carney’s favor. Yet, if Carney is elected he would be the most disastrous choice in negotiating a settlement with the US.  The situation will only become more ugly for Canada in every way.

This is not a “new boss, same as the old boss” scenario.  Carney is far higher up on the totem pole of degradation than Trudeau and much more devious.

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Via SchiffGold.com,

The CME Comex is the Exchange where futures are traded for gold, silver, and other commodities. The CME also allows futures buyers to turn their contracts into physical metal through delivery. You can find more detail on the CME here (e.g., vault types, major/minor months, delivery explanation, historical data, etc.).

The data below looks at contract delivery where the ownership of physical metal changes hands within CME vaults. It also shows data that details the movement of metal in and out of CME vaults. It is very possible that if there is a run on the dollar, and a flight into gold, this is the data that will show early warning signs.

Gold

The Comex has seen unprecedented delivery volume in gold since the election as highlighted in previous articles. This has been driven by an arbitrage between the spot and futures market. This can be seen in the chart below. It has normalized some, but is still showing erratic behavior.

Figure: 1 Spot vs Futures

The chart below shows the total delivery volume for major months in gold. As can be seen, April had the second highest delivery volume on record, clocking in at 64,514 contracts delivered, equivalent to $21.3B!

Figure: 2 Recent like-month delivery volume

There was something particularly wild about April. The chart below shows a few metrics:

• The contracts outstanding the day before delivery starts (blue)

• The contracts on delivery day (green)

• • This is usually a big step down from the day before as contracts roll

  • This number is the sum of contracts open + delivered on day 1 to show what the outstanding amount was on day 1 of delivery

• Net new contracts opened during the month for immediate delivery (red)

• Delivered contracts (orange)

As highlighted above, you typically see a big drop in contracts from the day before to the day of, presented by the blue and green bars respectively. This month the opposite happened! On the final day, someone took on a huge position. The next day, they then settled these without delivery. This is represented by the negative red bar as the contracts were cash settled rather than delivered.

Figure: 3 24-month delivery and first notice

This activity can also be seen below. A huge number of contracts came into the first delivery day but then cash settled.

Why? What happened? Is it possible someone was smelling blood in the water and wanted to test the Comex? Did someone get incentivized to cash settle since there might not have been enough physical gold to satisfy demand? If so, I bet they got paid a big premium to do cash settle.

Unfortunately, the data can only tell us so much. We can conclude that something happened behind the scenes in a way that has never happened before. The pressure continues to build!

Figure: 4 Cumulative Net New Contracts

Even with the large cash settlement, we then saw over 10k contracts open for immediate delivery (upward slop the in the red line above). This would have ranked second all-time behind only the large amount from February ~17k contracts.

Switching to physical inventories….

Inventory levels have actually dropped since the beginning of April. This could be tied to the event from above. Maybe someone was promised some gold and some cash for cash settling. That suspected investor(s) apparently pulled the physical right out of the vault.

Figure: 5 Inventory Data

Once gold and silver were announced to be excluded from tariffs, people started suggesting that the arbitrage would collapse and movement of gold from London to the US would be halted. While inventory levels have stabilized and even dropped some, demand for futures and physical delivery is not slowing. First, as shown above, April was a huge month. As we approach May, we are seeing an increase of demand into the delivery period. See chart below.

Figure: 6 Open Interest Countdown

With the massive surge in inventory the open interest relative to physical stocks is not as massive as the raw number.

Figure: 7 Open Interest Countdown Percent

Silver

Silver is a minor month in April. While delivery volume was elevated (second only to February), it was a big step down from where it was in April.

Figure: 8 Recent like-month delivery volume

A similar situation took hold in silver with the large cash settlement (albeit on a smaller scale).

Figure: 9 Cumulative Net New Contracts

Silver inventories have continued to increase unlike gold which has leveled off.

Figure: 10 Inventory Data

Registered silver is also seeing a massive increase.

Figure: 11 Inventory Data

As we approach April, the silver contract is right in line with recent trends.

Figure: 12 Open Interest Countdown

On a relative basis, open interest is actually quite low because of how much the Comex has restocked silver inventories.

Figure: 13 Open Interest Countdown Percent

Conclusion

The data continues to show that there is a lot of movement going on behind the scenes in the gold market. The price of gold has reflected this, hitting new all-time highs multiple times in April before seeing some profit taking.

This is not your ordinary gold market. The market is under pressure and there are a lot of people fighting over limited supply of physical gold. The tariff exclusion did not seem to slow the demand of physical.

It may take several more months for all this to play out, but one thing is for sure… the fireworks are not slowing. The Comex data is sending up loud signals. Physical gold is in demand. Do you have enough?

About a month after Elon Musk’s xAI Holdings acquired the X platform in an all-stock deal valuing the social media company at $33 billion, whispers have emerged that xAI is in talks with investors to raise $20 billion — a move that could push the startup’s valuation north of $120 billion. 

Citing anonymous sources, Bloomberg News reported Friday that xAI is in talks with investors to raise $20 billion. According to PitchBook data, the deal would mark the second-largest startup funding round on record, behind only OpenAI’s $40 billion raise earlier this year. The funding would push xAI’s valuation north of $120 billion if successful. 

Last week, sources told CNBC’s David Faber that Musk was seeking to place a “proper value” on xAI.

Here’s more color on Faber’s conversation with sources:

The comments came during a call with xAI investors last week, sources familiar with the matter told Faber. While the Tesla CEO didn’t explicitly address an upcoming funding round, the sources interpreted the comments as a sign that xAI is getting set up for a significant capital raise in the near future.

. . .

The sources also said the company discussed revenue at a potential run rate of $1 billion or more on the call.

Back to the Bloomberg report, Musk and xAI executives have been probing investors about their appetite for a $20 billion funding round. One source said the funding round could be much higher. 

The latest Bloomberg data shows Musk’s net worth at around $335 billion. Year-to-date, his net worth has declined by about $100 billion, with Tesla’s market capitalization halving due to gloomy sales figures and Democrats’ war on the company.

Late last year, Musk’s rocket company, SpaceX, became the most valuable startup after a private transaction valued the company at $350 billion. 

Musk’s companies include many of the technologies that will dominate 2030 and may even determine the fate of the US empire as the great power fight with China rages on.