FINANCIALS: Erste Bank - Q1 25 Earnings Headlines

Risk-off price action has been driven by tariff worry ahead of “Liberation Day” (Wednesday) and source reports pointing to the potential for deeper U.S. tariffs.

• A move away from lows in European equities & crude oil pushed bonds off session highs.
• Bund futures traded through key resistance at 129.41, peaking at 129.59, before fading back to 129.30 last. A fresh extension higher would target 130.00.
• Yields ~4bp lower across the German curve.
• Regional level German CPI data points to an inline national reading later today, while Italian CPI topped expectations.
• Eurozone HICP is tracking a little below consensus (+2.1-2.2% Y/Y vs. BBG median of +2.2%).
• EGB spreads to Bunds little changed to 2bp wider given the risk-off theme.
• There was no real initial reaction in OATs (both outright and in spread vs. Bunds) as RN leader Le Pen was found guilty in the RN embezzlement case. French political uncertainty and fiscal risks are set to remain evident in the near term, irrespective of who leads the RN through the next election cycle.
• Gilt futures have breached last week’s high and traded above 92.00.
• Initial Fibonacci resistance (92.17) protects trendline resistance drawn off the March 4 high (91.55).
• Yields 3-4bp lower across the UK curve.
• Dovish repricing in both the EUR (~85% odds of a cut showing for next month, 64bp cuts priced through Dec) & GBP (54bp of cuts showing through Dec) short ends given the prevailing risk-off theme.
• Comments from ECB’s Lagarde & Panetta failed to move markets.

• The final shape and structure of Trump's reciprocal tariffs pledge on Wednesday remains to be seen, with little clarity from the White House on whether Liberation Day will entail blanket tariff rates set against all imports, or more targeted levies against specific countries. Should convention for the previous phases of tariffs be followed, tariffs will come into effect at 0001ET/0501BST on Wednesday - leaving a tight timeline for the White House to provide further details.
• As a result of the tariff-tied uncertainty, equities are slipping alongside high-beta, growth-oriented currencies - keeping AUD and NZD at the bottom of the G10 pile. the USD Index is lower, markets are still above the mid-March lows, meaning the 200-dma resistance holds firm for now; just above last week's 104.683 highs at 104.925.
• This has boosted the JPY in early trade, confirming the risk-off picture. US equity futures are markedly lower, and growth sensitive tech names are the hardest hit - keeping the NASDAQ future off 1.3% at typing. AUD/JPY is being pressed toward support of Y93.32 - the 61.8% retracement of the upleg posted off the March 11th low.
• The MNI Chicago PMI release for March is the data highlight Monday, with markets expecting activity to remain subdued across the month. Dallas Fed manufacturing activity follows shortly afterward - with to remain the key focus given the light central bank speaker slate today. 

• Italy HICP surprised to the upside coming in a 2.1%Y/Y - but we note the Bloomberg consensus was 2.0%Y/Y while Reuters consensus was 1.8%Y/Y - so there is a bit of a disparity between the size of the surprise here, depending upon which survey you follow.
• Assuming that Dutch and German HICP come in in line with consensus and there are no big changes to the Y/Y rates of Austria, Ireland and Portugal (the former two out at 11:00BST) we see the EZ print tracking at broadly 2.1-2.2%. The Bloomberg median is at 2.2% - but there are more analysts forecasting 2.3%Y/Y than 2.1%, so there may be some very modest downside risks.
• Looking more at Italian HICP, core under the Eurostat definition (ex energy, food, alcohol and tobacco) came in at 1.8%Y/Y (1.5% prior) while under the Istat definition of ex energy and unprocessed food, it rose from 1.8%Y/Y to 1.9%Y/Y.
• Services rose 2.7%Y/Y in March (2.6% in February) with energy increasing 3.3%Y/Y (0.6% prior), "food, alcohol and tobacco" 2.7%Y/Y (from 2.4%) and core goods (non-energy industrial goods) increasing 0.5%Y/Y (versus a 0.1%Y/Y decline in February).
• Istat notes that core goods prices were boosted by the end of winter sales of clothing and footwear (which rose 1.3%Y/Y in March versus -0.6%Y/Y in February).