EQUITIES: Estoxx Call Spread vs Put

• Fed funds implied rates are 0-1.5bp higher today for 2025 meetings, aided by the WSJ reporting after the close yesterday that Trump is expected to soften the impact of auto tariffs.
• It modestly pares yesterday’s rally with help from some further recovery in equity futures.
• Cumulative cuts from 4.33% effective: 2.5bp May, 17bp Jun, 37.5bp Jul, 57.5bp Sep and 91.5bp Dec.
• In SOFR futures, the terminal yield remains in the U6 (3.06%), with the contract currently leading the day’s losses at -4.5. At 96.940, it’s off yesterday’s high of 96.990 after clearance of 96.97 (Apr 21 high) saw highs since levels prior to the 90-day tariff pause announcement on Apr 9.
• Today sees advance trade data for March at 0830ET, with Bessent set to speak at the same time, before JOLTS and the Conference Board consumer survey at 1000ET.
• There are also multiple earnings releases still to come today plus potential for Trump headlines in reaction to the WSJ report on autos yesterday plus Politico today reporting Amazon as being set to display the impact of Trump tariffs on each product. 

The EC’s sentiment index slipped to 93.6 in April, below the 94.5 consensus and 95.0 prior for the lowest since October 2023. The results underscore ECB Governing Council concerns around the growth outlook, with few positive signals across the business and consumer sides of the survey.

• Both industry (-11.2 vs 10.4 cons, -10.7 prior) and services (1.4 vs 2.2 cons, 2.2 prior) were weaker than expected.
• Within the industry survey, the expected production component was 0.0, its weakest level YTD. There were no obvious signs of tariff front-running in the export orders component.
• The retail confidence reading also softened to -8.9 (vs -7.0 prior). The future business activity component fell for a fourth consecutive month.
• The expected employment indicator was steady at 96.5, the weakest since February 2021. Meanwhile, expected price metrics ticked up modestly across industries.
• Consumer confidence was confirmed at -16.7 (vs -14.5 prior). All of the forward-looking components (financial situation, economic situation, unemployment expectations, capacity to save and major purchase intentions) weakened in April.