Key Highlights

• Tariff Talks Lift Market Spirits

Investor confidence has picked up as there’s growing optimism that negotiations around U.S.-China tariffs are progressing. Could reduced trade barriers improve your import/export costs or supply chain reliability?

• China’s Politburo Keeps Markets Guessing

While markets were hoping for firm fiscal stimulus announcements, the Politburo meeting gave only vague commitments, leaving questions about how much support China’s economy will actually get. Are you exposed to Chinese markets or demand trends? How might this uncertainty affect your planning?

• Fed Signals Potential for More Rate Cuts

U.S. Fed officials Waller and Kashkari signalled that additional rate cuts are not off the table, citing evolving inflation and growth dynamics. How could lower U.S. rates affect your borrowing costs, investment returns, or USD exposure?

Market Recap:

Tariff Confusion Keeps Traders on Edge

Markets found a dose of optimism yesterday, with equities climbing as investors remained cautiously hopeful about the outlook for trade. Early signals from the White House pointed to potential new U.S. tariffs on China within weeks, yet that positivity was dampened by China’s later statement that no formal discussions had taken place.

Meanwhile, comments from Fed officials Hammack and Waller added a dovish twist—indicating they’d support rate cuts in June if tariffs start weighing on jobs. That shift in tone led to a pickup in U.S. Treasuries, pushing yields lower and softening the dollar slightly.

👉 What does this mean for you?

• Could a weaker USD affect your international payments or FX strategy?
• Are your assets positioned for the uncertainty still surrounding trade negotiations and rate moves?

🌍 Market Snapshot:

Trade Tensions Ease, Stimulus Hopes Build

Markets remain upbeat this morning following reports that China may suspend its 125% tariffs on certain U.S. imports, with parallel optimism around possible U.S. trade deals with Norway and South Korea. This lighter tone has helped risk assets hold onto recent gains, while the U.S. dollar attempts to consolidate after strengthening yesterday.

• 🇬🇧 UK Retail Sales Beat Expectations Stronger-than-expected UK retail figures had little effect on the pound, suggesting broader market focus remains on global trade and central bank developments. 👉 Could domestic resilience offer temporary FX support, or will global headlines dominate GBP flows?
• 📈 Risk Assets Continue to Rally A shift in rhetoric from U.S. officials suggests growing openness to trade resolution—particularly in Asia—with talk of near-term agreements with India and South Korea. China’s potential tariff suspension further lifted sentiment, helping the S&P 500 climb 2% and driving a broad rally across Asian equities. 👉 Are your portfolios aligned with improving risk sentiment, or are they still positioned for defensiveness?
• 🏦 China’s Politburo Promises Support—But Lacks Detail While President Xi pledged new tools to boost the economy and help lower-income households, markets were underwhelmed by the lack of specifics, leaving questions around fiscal stimulus unresolved. 👉 If you're exposed to China or emerging markets, how are you factoring in stimulus uncertainty?
• 📉 Fed Officials Turn Dovish Amid Trade Risks Fed speakers including Chris Waller and Neel Kashkari expressed concern over the economic impact of prolonged trade uncertainty—citing potential layoffs and inflation pressures. While rate expectations were little changed, markets are still pricing in substantial cuts by year-end. 👉 Is your interest rate risk strategy prepared for potential policy shifts?

24th April 2025

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