MNI US OPEN - US, China Send Mixed Signals on Talks
EXECUTIVE SUMMARY
- TRUMP SAYS US TALKING WITH CHINA ON TRADE AFTER BEIJING’S DENIAL
- FED'S KASHKARI WORRIED ABOUT UNCERTAINTY, LAYOFFS
- CHINA POLITBURO CALL FOR RRR AND INTEREST RATE CUTS
- UK RETAIL SALES SEE CONSUMER BOOST IN Q1
Figure 1: Tokyo CPI bounces in April
Source: MNI/Bloomberg
NEWS
US/CHINA (BBG): Trump Says US Talking With China on Trade After Beijing’s Denial
President Donald Trump said his administration was talking with China on trade, after Beijing denied the existence of negotiations on a deal and demanded the US revoke all unilateral tariffs. “They had a meeting this morning,” Trump said Thursday during a meeting with Norway’s prime minister when a reporter asked about the Chinese statement. Pressed on which administration officials were involved in discussions, the US president said, “it doesn’t matter who ‘they’ is. We may reveal it later, but they had meetings this morning, and we’ve been meeting with China.”
US/CHINA (BBG): China May Exempt Some US Goods From Tariffs as Costs Rise
China’s government is considering suspending its 125% tariff on some US imports, people familiar with the matter said, as the economic costs of the tit-for-tat trade war weigh heavily on certain industries. Authorities are considering removing the additional levies for medical equipment and some industrial chemicals like ethane, the people said, asking not to be identified discussing private deliberations.
US/RUSSIA (BBG): Trump Envoy Witkoff Arrived in Moscow, Interfax Reports
US President Donald Trump’s special envoy arrived in Moscow, according to the Interfax news service, as Washington intensifies its push for a deal to end Russia’s war on Ukraine. Steve Witkoff landed at the city’s Vnukovo airport on Friday morning, the news agency reported, citing a person it didn’t identify. Witkoff is set to raise with Russian President Vladimir Putin a US demand that Ukraine have the right to develop its own army and defense industry as part of any peace agreement, Bloomberg News reported earlier.
US/INDIA (BBG): US Seeks India Trade Deal on E-Commerce, Crops and Data Storage
A US-India trade agreement under discussion will cover 19 categories, including greater market access for farm goods, e-commerce, data storage and critical minerals, people familiar with the matter said, the first step toward a deal that may help the South Asian nation evade higher tariffs on its goods. The terms of reference for a bilateral deal, which was finalized by both sides this week, includes trade in goods as well as services, the people said, asking not to be identified as the discussions are private.
US/S.KOREA (BBG): Bessent Sees US, Korea Trade ‘Understanding’ by Next Week
The US and South Korea could reach an “agreement of understanding” on trade as soon as next week, Treasury Secretary Scott Bessent said Thursday, following talks between the two nations. “We had a very successful bilateral meeting,” Bessent told reporters during an Oval Office meeting between President Donald Trump and the prime minister of Norway. “We may be moving faster than I thought, and we will be talking technical terms as early as next week as we reach an agreement on understanding as soon as next week.”
FED (MNI): Fed's Kashkari Worried About Uncertainty, Layoffs
Minneapolis Fed President Neel Kashkari said Thursday he is worried that a prolonging of trade uncertainty from Washington could result in layoffs from businesses, but he is not seeing an uptick in firing notices yet. "What I'm a little bit worried about right now is there's enough overhanging uncertainty in the economy then maybe businesses are going to start laying people off. We haven't seen it yet," Kashkari said in Q&A at an University of Minnesota event.
CHINA (MNI): China Politburo Call for RRR and Interest Rate Cuts
MNI (Beijing) China will take further measures to stimulate the economy, stabilize equity and real estate markets and defuse risks from local government debt, according to the latest Politburo meeting chaired by President Xi Jinping on Friday. A statement on Xinhua News Agency noted that the meeting called for the People’s Bank of China to timely reduce reserve requirement ratio and interest rates while ensuring ample liquidity. Fiscal authorities should speed up the issuance and utilization of local government special bonds and ultra-long-term special government bonds, Xinhua noted.
CHINA (MNI): PBOC's Pan Calls for Global Policy Coordination
MNI (Beijing) People’s Bank of China will implement a moderately accommodative policy to support China’s economic growth and major economies should strengthen policy coordination to safeguard against global economic and financial stability, PBOC governor Pan Gongsheng said in Washington at the Spring Meetings of the International Monetary Fund (IMF) and the World Bank.
ECB (BBG): ECB’s Holzmann Sees Disinflationary Impact From US Tariffs
European Central Bank Governing Council member Robert Holzmann said the fallout from the US tariff announcements will probably weigh on consumer prices in the euro zone rather than create a new bout of inflation. The hawkish Austrian policymaker also said the lack of clarity over the situation means the ECB’s next interest-rate decisions are “completely open.” “We don’t know where we’ll end up,” Holzmann said in an interview in Washington, where he’s attending the IMF’s spring meetings.
UK/EU (FT): UK Must Pay to Join EU Defence Fund, Says Brussels
The UK will be expected to pay a fee to guarantee British companies access to a €150bn EU weapons fund to buy weapons, under plans being discussed by diplomats in Brussels. The EU and UK are set to sign a broad defence and security pact at a May 19 summit, but a second, more detailed agreement will be required before companies such as BAE Systems can win contracts funded by the Security Action For Europe (Safe) fund, according to diplomats and officials involved in the negotiations.
SPAIN (MNI INTERVIEW): Spain Unsure on Fiscal Escape Clause for Defence
MNI interviews Spanish Finance Minister Carlos Cuerpo in Washington - On MNI Policy MainWire now, for more details please contact sales@marketnews.com
SNB (MNI): Schlegel Sees Lower Swiss Growth in AGM; Otherwise Common Themes
SNB Chairman Schlegel flags Swiss growth risks and highlights the SNB will intervene in FX markets if "price stability is threatened" in his speech at the Annual General Meeting - nothing hugely significant that hasn't been said before. Key highlights: An "economic slowdown cannot be ruled out. Growth is likely to be lower than was expected just a few weeks ago" (SNB real GDP forecast was 1.0-1.5% for 2025, 1.5% for 2026 in March meeting). FX intervention is "not about achieving a specific exchange rate target. In principle, Switzerland has flexible exchange rates.
CORPORATE (FT): Apple Aims to Source All US iPhones From India in Pivot Away From China
Apple plans to shift the assembly of all US-sold iPhones to India as soon as next year, according to people familiar with the matter, as President Donald Trump’s trade war forces the tech giant to pivot away from China. The push builds on Apple’s strategy to diversify its supply chain but goes further and faster than investors appreciate, with a goal to source from India the entirety of the more than 60mn iPhones sold annually in the US by the end of 2026.
DATA
UK DATA (MNI): UK Retail Sales See Consumer Boost in Q1 - ONS
- UK MAR RETAIL SALES +0.4% M/M, +2.6% Y/Y
- UK MAR RETAIL SALES EX-FUEL +0.5% M/M, +3.3% Y/Y
UK total retail sales rose 0.4% in March, following a rise of 0.7% in February, data released by the Office for National Statistics Friday showed. Clothing and outdoor retailers reported that good weather boosted sales. These increases were partly offset by falls in supermarket sales. Looking at the quarter, sales volumes rose by 1.6% in Q1 compared with Q4, and by 1.7% when compared with Q1 2024. It was the biggest Q/Q gain since Q2 2021.
GERMANY DATA (MNI): IFO Export Expectations Drop but Remain Above Covid/GFC Lows
IFO export expectations dropped in April, to -9.8 (-2.3 March), the lowest since May 2020 in an unsurprising move following firmer US tariff policy. On a historical comparison, the index remains well off lows seen during the pandemic and the global financial crisis. "The high level of uncertainty regarding how the tariffs will actually
develop will probably exacerbate the situation further", IFO adds.
FRANCE DATA (MNI): Divergence Between Individual and Economy-Wide Production Exp.
- FRANCE APR MANUF SENTIMENT AT 99
French manufacturing sentiment climbed to 99.5 in March, above the 95 (rounded) consensus and 96.1 prior. The improvement diverges from the April flash manufacturing PMI, which eased slightly to 48.2 (vs 48.5 prior). One notable detail is that personal production expectations rose to 10.8 from 6.3 prior. However, general (i.e. economy-wide) production expectations slipped to -15.5 (vs -11.4 prior).
JAPAN DATA (MNI): Apr Tokyo Core CPI Rises 3.4% vs. Mar 2.4%
- JAPAN APRIL TOKYO CORE CPI +3.4% Y/Y; MARCH 2.4%
- JAPAN APRIL TOKYO CORE-CORE CPI +3.1% Y/Y; MARCH 2.2%
- JAPAN APRIL SERVICES PRICES +2.0% Y/Y; MARCH +0.8%
The Tokyo core inflation rate accelerated to 3.4% y/y in April from March’s 2.4%, above the Bank of Japan's 2% target for the sixth straight month, data from the Ministry of Internal Affairs and Communications showed on Friday. The 3.4% increase is the highest level since July 2023 when it rose 3.0%. Food prices excluding perishables (+6.4% vs. +5.6%) and energy prices (+9.4% vs. +6.1%) boosted the result, despite slower households’ durable goods growth (+6.8% vs. +7.7%).
RATINGS: Stable Outlooks Up for Review After Hours
Potential rating reviews of note scheduled for after hours on Friday include:
- S&P on Belgium (current rating: AA; Outlook Stable), Finland (current rating: AA+; Outlook Stable), Slovakia (current rating: A+; Outlook Stable) & Turkey (current rating: BB-; Outlook Stable)
- Morningstar DBRS on the European Union (current rating: AAA; Stable Trend)
- Scope Ratings on Cyprus (current rating: A-; Outlook Stable) & Luxembourg (current rating: AAA; Outlook Stable)
Please use this link to access the indicative sovereign rating review schedule covering the five most notable rating agencies for 2025. Note that this schedule is indicative only and ratings can be reviewed on an ad-hoc basis. Rating agencies may also adjust their schedules during the year.
FOREX: Greenback Firmer Amid Conflicting US-China Trade Talk Reports
- The greenback is firmer against all others early Friday, however the USD Index weekly range remains generally contained. Price is yet to re-take the 100.00 level, with market concern remaining on the fraught trade tensions between the US and China. Despite Trump stating yesterday that meetings between unnamed parties had been held, Chinese spokespeople were less positive - with China's foreign ministry this morning stating "China and the US are not having any consultations".
- As a result, the late Thursday equity rally has flattened out, and the USD has edged off the session's best levels into the NY crossover. This leaves focus on any further missives from the US President as well as Canadian retail sales and the final April University of Michigan sentiment index. There are no Fed speakers due today, although any unscheduled comments would be carefully watched given the media blackout period kicks in at the close today, ahead of the Fed's May 7th meeting.
- USD/JPY rallied in Tokyo hours, touching a high of Y143.85 before moderating. Gains for the pair coincides with overnight strength for global equities - which proved sufficient to prompt a +1.9% close for the Nikkei 225. A sell-on-rallies theme remains dominant here, however, with downside momentum in the pair still dominant below Y145.00.
EGBS: Equity Resilience Pressures Major EGB Futures
European equity futures have proved resilient to the latest rhetoric out of China, with officials pushing back on reports that tariff negotiations have begun with the US. That resilience has weighed on major EGB futures, with Bunds -31 ticks at 131.57.
- A bull cycle in Bunds remains in play though, with resistance and the bull trigger at 132.03 (April 7 high) exposed. Clearance of this level would confirm a resumption of the uptrend and open 132.56, the Feb 28 high. Initial support is the 20-day EMA at 130.54.
- The German curve has bear flattened, with Schatz yields up 4bps and 30-year yields up 2bps.
- German IFO export expectations dropped in April, to -9.8 (-2.3 March), the lowest since May 2020. Meanwhile, French manufacturing production was stronger-than-expected at 99.5, with a notable divergence between individual and general production expectations.
- ECB’s Holzmann again struck a more dovish-than-usual tone, citing the disinflationary impact of tariffs so far and the growth-negative impacts of tariff uncertainty.
- 10-year EGB spreads to Bunds are within 1bp of yesterday’s close, with GGBs underperforming.
- The global risk backdrop and tariff-related headlines look set to drive EGB price action into the weekend.
GILTS: Off Early Lows, BoE's Greene & Trade Cues Eyed
Gilts in tight ranges early Friday, with futures consolidating in the upper end of the ranges witnessed over the prior couple of sessions.
- Mixed trade messaging from the U.S. & China, as well as a slightly more constructive BBG source report pointing to the potential for China easing some tariffs imposed on U.S. goods, leave gilts little changed
- Firmer-than-expected retail sales (accompanied by negative revisions) won’t be enough to impact BoE policy given the volatile nature of the data and broader uncertainty stemming from global trade dynamics.
- Futures printed as low as 92.90 before recovering to ~93.10 last.
- The recent bullish recovery remains intact, with initial support and resistance located at 92.13 & 93.32, respectively.
- Yields flat to 2bp lower, curve flattens.
- 10s last 4.50%, above initial support at 4.46% and uptrend support drawn off the late ’21 lows (4.403% today).
- BoE MPC member Greene will speak this afternoon (15:15 BST). She already sounded a little less hawkish in remarks made earlier this week, although the topic of “inflation, growth and monetary policy” gives her room to provide more insight into her outlook.
- The recovery from lows in gilts unwinds the initial, modest hawkish move in GBP STIRs.
- BoE-dated OIS now little changed across ’25 meetings, showing 89bp of cuts through December, with the next 25bp move still fully discounted come the end of the May meeting.
- SONIA futures flat to +3.0.
EQUITIES: Eurostoxx 50 Futures Pierce Resistance at 50-Day EMA
Eurostoxx 50 futures have traded higher this week. The contract has cleared the 20-day EMA and has today pierced resistance at the 50-day EMA, at 5100.90. A clear break of this average would strengthen the current bull cycle and signal scope for a continuation of the corrective uptrend. This would open 5165.00 next, the Apr 3 high. On the downside, support to watch lies at 4812.00, the Apr 16 low. Clearance of this level would highlight a reversal. The corrective bull cycle in S&P E-Minis that started on Apr 7, remains in play for now. The contract has traded higher this week and in the process breached a number of important short-term resistance points. Price has cleared the 20-day EMA and pierced 5528.75, the Apr 10 high. The next key resistance to watch is 5625.35, the 50-day EMA. Initial key support lies at 5127.25, the Apr 21 low. A break would be bearish.
- Japan's NIKKEI closed higher by 666.59 pts or +1.9% at 35705.74 and the TOPIX ended 35.47 pts higher or +1.37% at 2628.03.
- Elsewhere, in China the SHANGHAI closed lower by 2.228 pts or -0.07% at 3295.06 and the HANG SENG ended 70.98 pts higher or +0.32% at 21980.74.
- Across Europe, Germany's DAX trades higher by 126.16 pts or +0.57% at 22185.34, FTSE 100 higher by 19.26 pts or +0.23% at 8426.41, CAC 40 up 56.84 pts or +0.76% at 7560.7 and Euro Stoxx 50 up 35.28 pts or +0.69% at 5150.2.
- Dow Jones mini up 8 pts or +0.02% at 40271, S&P 500 mini up 22 pts or +0.4% at 5534, NASDAQ mini up 86.25 pts or +0.45% at 19412.5.
Time: 10:00 BST
COMMODITIES: Bearish Theme in WTI Futures Intact, Recovery Appears Corrective
A bearish theme in WTI futures remains intact and the recovery since Apr 9 appears corrective. The move higher has allowed an oversold trend condition to unwind. Recent weakness resulted in the breach of a number of important support levels, reinforcing a bearish threat. A resumption of the bear cycle would open $53.72, a Fibonacci projection. Resistance to watch is $65.84, the 50-day EMA. The trend needle in Gold continues to point north. The latest move down appears corrective and the retracement is allowing an overbought trend condition to unwind. Moving average studies are unchanged, they remain in a bull-mode position highlighting a dominant uptrend. The next objective is $3547.9, a Fibonacci projection. Initial firm support to watch lies at 3208.9, the 20-day EMA.
- WTI Crude down $0.16 or -0.25% at $62.65
- Natural Gas down $0.02 or -0.72% at $2.908
- Gold spot down $43.56 or -1.3% at $3304.95
- Copper down $9.85 or -2.01% at $481.05
- Silver down $0.13 or -0.39% at $33.4269
- Platinum down $8.45 or -0.87% at $966.83
Time: 10:00 BST
| Date | GMT/Local | Impact | Country | Event |
| 25/04/2025 | 1230/0830 | ** |  CA | Retail Trade |
| 25/04/2025 | 1230/0830 | ** | CA | Retail Trade |
| 25/04/2025 | 1400/1000 | *** |  US | U. Mich. Survey of Consumers |
| 25/04/2025 | 1400/1000 | ** | US | University of Michigan Surveys of Consumers Inflation Expectation |
| 25/04/2025 | 1500/1100 | CA | Finance Dept monthly Fiscal Monitor (expected) | |
| 25/04/2025 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 25/04/2025 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 25/04/2025 | 1915/2015 |  GB | BOE's Greene on Inflation, growth and moentary policy | |
| 25/04/2025 | 2000/1600 | US | Kevin Warsh |
