Strong safe haven flows see Gold pass $3.5K as US Dollar status is questioned

EU mid-market update: Strong safe haven flows see gold pass $3.5K as US dollar status is questioned; Equities seen drifting sideways to lower until trade dispute resolved

Notes/observations

- Europe returns from extended Easter weekend and turns red, following weak US session on Monday. FTSE outlier, holding green. Risk sentiment soured from lack of progress on trade talks and agenda of Trump admin. US dollar weakening trend continues as confidence collapses in US creditability. Treasury yields climb. Latest doubt comes from Pres Trump, who repeated calls for Fed Chair Powell to lower rates, calling him a ‘loser’. Analysts see a premature exit triggering ‘a major market backlash’.

- No finalized trade deals on tariffs yet. Over 20 countries, including India, Japan, and South Korea, are in talks. To continue this week. Trump’s attendance to Pope’s funeral could accelerate deal with Italy/EU.

- Tier1 analysts on Port of Los Angeles: Amid tariff uncertainty, importers have deferred back-to-school and holiday bookings rather than front-loading shipments, leaving early May 2025 bookings under 700 K TEUs (–9 % YoY; –25 % from peak). Note that there’s no clear evidence yet that apparel firms are front-loading from Vietnam too. About 40–45 % of imports still come from China, followed by Japan, Vietnam, Korea, Indonesia and other Southeast Asian sources.

- Corporate earnings was light for EU, but road ahead sees substantial acceleration in volume.

- Asia closed mixed with Hang Seng outperforming +0.8%. EU indices +0.3% to -0.5%. US futures +0.9-1.1%. Gold +0.8%, DXY +0.1%; Commodity: Brent +1.3%, WTI +1.5%; Crypto: BTC +1.1%, ETH -0.8%.

Asia

- Japan Fin Min Kato stated that would hold discussions with US on forex.

- BOJ said to see little need to change its rate stance at the present time.

Global conflict/tensions

- Russia President Putin said to be open to peace initiatives with Ukraine. Proposed bilateral talks with Ukraine for the first time since the early days of the conflict.

- US, Ukraine, Europe allies to meet Wednesday (Apr 23rd) on peace plan.

Americas

- WSJ's Timiraos wrote that President Trump was signaling that he would blame the Federal Reserve for any economic weakness that resulted from his trade war if the central bank did not cut interest rates soon.

- Rep. Frank Lucas (R-OK.) said the task force had discussed the importance of Fed independence and how to build "the walls higher and stronger and taller."

- Moody's Chief Economist Zandi noted that most likely scenario for the next 12 months was that we entered a self sustaining economic expansion; It won't be a soft landing, it would be a little bumpy and ugly. Trump administration’s policies were set to severely diminish the economy, not only for the next few months but for years. Administration’s trade war was undermining the global safe-haven status of the US.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.41% at 504.36, FTSE +0.14% at 8,287.17, DAX -0.27% at 21,147.96, CAC-40 -0.35% at 7,260.08, IBEX-35 +0.33% at 12,961.00, FTSE MIB -0.59% at 35,768.00, SMI -0.83% at 11,564.70, S&P 500 Futures +0.96%].

Market focal points/key themes: European indices open modestly lower across the board and remained generally downbeat through the early part of the session; Cyprus closed for holiday; markets seen in holding pattern as trade negotiations carry on; better performing sectors include financials and real estate; while technology and industrials are among the underperforming sectors; Helvetia and Balois propose merger of equals; Ypsomed sells its diabetes care unit to TecMed; Biotage to be acquired by KKR; earnings expected in the upcoming US session include Tesla, GE Aerospace, SAP and Verizon.

Equities

- Consumer discretionary: L’Oreal [OR.FR] +2.5% (earnings).

- Energy: Schneider Electric [SU.FR] -3.5%, Siemens Energy [ENR.DE] -2.0% (Wells Fargo and Cowen flag AWS data center leasing pause), Orsted [ORSTED.DK] -8.0% (Barclays cuts to underweight; Equinor suspended offshore construction activities for the Empire Wind project in accordance with a halt work order issued by the US govt), ITM Power [ITM.UK] +11.5% (raises FY guidance).

- Financials: Baloise [BALN.CH] +4.5% (Helvetia and Baloise propose merger of equals to form "Helvetia Baloise Holding Ltd").

- Healthcare: Novo Nordisk [NOVOB.DK] -8.5% (Eli Lilly oral weigh-loss pill trial results), Roche [ROG.CH] -1.5% (to invest $50B in pharmaceuticals and diagnostics in the United States over the next five years).

- Industrials: BMW [BMW.DE] -0.5% (cut to neutral at Redburn).

Speakers

- ECB Survey of Professional Forecasters (SPF) raised the 2025 HICP (EU Harmonized CPI) from 2.1% to 2.2% (**Note: ECB Mar Staff forecast is 2.2%) and raised the 2026 HICP (EU Harmonized CPI) from 1.9% to 2.0%. Survey cut the 2025 GDP growth from 1.0% to 0.9% (**Note: ECB Mar Staff forecast is 0.9%) and cut 2026 GDP growth from 1.3% to 1.2%.

- ECB's Rehn (Finland) stated that inflation was stabilizing at 2% target; Total tariff impact on Euro Area was modest.

- BOE’s Greene noted that market pricing reflected global factors, not just UK. Saw both dis-inflationary and inflationary factors but was more concerned about supply side.

- Japan LDP policy chief Onodera said to urge govt to cut gasoline prices as a means of buffering the economy against potential impacts from US tariffs and to mitigate the impact of inflation.

Currencies/fixed income

- USD began the session on the defensive over concerns about Fed independence. Over the weekend Trump adviser Hassett stated aid Trump is still studying whether to fire Fed Chair Powell Spot gold hit a fresh record high above the $3,500 mark. WSJ simply put it that President Trump was signaling that he would blame the Fed for any economic weakness that resulted from his trade war if the central bank did not cut interest rates soon.

- EUR/USD tested as high as 1.1547 before retreating.

- GBP/USD hovering around the 1.34 level.

- USD/JPY hit a 7-month low below 140 before consolidating. Focus on upcoming meeting between Japan Fin Min and US Treasury Sec Bessent. Talk of potential for US demands to lower the dollar.

- 10-year German Bund yield at 2.46% and 10-year Gilt yield at 4.56%. 10-year Treasury yield at 4.42%.

Economic data

- (NL) Netherlands Apr Consumer Confidence: -37 v -34 prior.

- (NL) Netherlands Mar House Price Index M/M: 0.7% v 0.1% prior; Y/Y: 10.6% v 10.6% prior.

- (SE) Sweden Mar Unemployment Rate: 8.5% v 9.4% prior; Unemployment Rate (Seasonally adj): 8.1% v 8.7%e; Trend Unemployment Rate: 8.8% v 9.0% prior.

- (DK) Denmark Apr Consumer Confidence: -17.0 v -15.5 prior.

- (CH) Swiss Mar M3 Money Supply Y/Y: 2.8 v 2.5% prior.

- (ZA) South Africa Feb Leading Indicator: 114.2 v 114.4 prior.

- (TR) Turkey Apr Consumer Confidence: 83.9 v 85.9 prior.

- (MY) Malaysia mid-Apr Foreign Reserves: $118.4 v $117.5B prior.

- (ES) Spain Feb Trade Balance: -€3.4B v -€6.2B prior.

- (CH) Swiss Weekly Total Sight Deposits (CHF): 448.3B v 446.9B prior; Domestic Sight Deposits: 439.7B v 438.4B prior.

- (PL) Poland Mar Sold Industrial Output M/M: 8.6% v 9.2%e; Y/Y: 2.5% v 3.6%e; Construction Output Y/Y: -1.1% v +5.6%e.

- (PL) Poland Mar Employment M/M: -0.1% v -0.1%e; Y/Y: -0.9% v -0.9%e.

- (PL) Poland Mar Average Gross Wages M/M: 5.1% v 5.3%e; Y/Y: 7.7% v 7.8%e.

- (PL) Poland Mar PPI M/M: -0.3% v -0.2%e; Y/Y:-1.1 % v -1.1%e.

- (TW) Taiwan Mar Export Orders Y/Y: 12.5% v 16.2%e.

- (TW) Taiwan Mar Unemployment Rate: 3.4% v 3.4%e.

- (HK) Hong Kong Mar Unemployment Rate: 3.2% v 3.2%e.

- (EU) Euro Zone 2024 Preliminary Govt Debt/GDP Ratio: 87.4% v 87.3% prior.

- (BE) Belgium Apr Consumer Confidence: -14 v -10 prior.

Fixed income issuance

- (ES) Spain Debt Agency (Tesoro) sold total €2.725B vs. €2.0-3.0B indicated range in 3-month and 9-month bills.

Looking ahead

- (IL) Israel Apr 12-month CPI Forecast: No est v 2.4% prior.

- (MX) Mexico Citi Economists Survey.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (DE) Germany to sell €5.0B in new Jun 2027 Schatz.

- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €1.5-3.5B in 3-month and 6-month bills.

- 05:30 (CH) Switzerland to sell 3-month Bills.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bill.

- 05:30 (ZA) South Africa to sell combined ZAR3.75B in 2032, 2035 and 2053 bonds.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 06:00 (IE) Ireland Mar PPI M/M: No est v -0.9% prior; Y/Y: No est v -0.5% prior.

- 06:00 (IL) Israel Mar Trade Balance: No est v -$2.7B prior.

- 06:00 (IL) Israel to sell combined ILS2.85B in 2027, 2028, 2034, 2035, 2042 and 2051 bonds.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 08:00 (MX) Mexico Feb Gold Production: No est v 6.5K kg prior; Silver Production: No est v 345.0K kg prior; Copper Production: No est v 20.9K tons prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (US) Apr Philadelphia Fed Non-Manufacturing Activity: No est v -32.5 prior.

- 08:30 (CA) Canada Mar Industrial Product Price M/M: 0.3%e v 0.4% prior; Raw Materials Price Index M/M: 0.1%e v 0.3% prior.

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 09:00 (FR) France Debt Agency (AFT) to sell €5.8-7.4B in 3-month, 6-month and 12-month bills.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 IMF Updates World Economic Outlook (WEO): Previously saw 2025 GDP global growth at 3.3%.

- 09:00 (US) Fed's Jefferson at Economic Mobility Summit.

- 09:30 (US) Fed's Harker at Economic Mobility Summit.

- 10:00 (EU) ECB chief Lagarde.

- 10:00 (US) Apr Richmond Fed Manufacturing Index: -7e v -4 prior; Business Conditions: No est v -14.0 prior.

- 10:00 (EU) Euro Zone Apr Advance Consumer Confidence: -15.1e v -14.5 prior.

- 11:30 (US) Treasury to sell 6-Week Bills.

- 13:00 (US) Treasury to sell 2-Year Notes.

- 13:00 (ES) ECB’s De Guindos (Spain).

- 13:40 (US) Fed’s Kashkari.

- 14:30 (US) Fed’s Barkin.

- 15:00 (AR) Argentina Feb Economic Activity Index (Monthly GDP) M/M: No est v 0.6% prior; Y/Y: 5.5%e v 6.5% prior.

- 16:00 (NL) ECB’s Knot (Netherlands).

- 16:30 (US) Weekly API Oil Inventories.

- 17:00 (KR) South Korea Apr Consumer Confidence: No est v 93.4 prior.

- 18:00 (US) Fed’s Kugler.

- 19:00 (AU) Australia Apr Preliminary PMI Manufacturing: No est v 52.1 prior; PMI Services: No est v 51.6 prior; PMI Composite: No est v 51.6 prior.

- 20:30 (JP) Japan Apr Preliminary PMI Manufacturing: No est v 48.4 prior; PMI Services: No est v 50.0 prior; PMI Composite: No est v 48.9 prior.

- 23:00 (TH) Thailand to sell combined THB45B in 2030 and 2045 bonds.