MIDEAST: Trump Participates In GCC Summit After Meeting Syrian President
May-14 08:30
US President Donald Trump is participating in the Gulf Cooperation Council summit in Riyadh, Saudi A...
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EQUITIES: Pre-Market Surge for Apple Follows Sectoral Reprieve
Apr-14 08:30
- Strength in US equity futures has fed well into outperformance for cash European indices this morning. The reprieve for electronics imports from China into the US is the driver here, evident in early strength in the likes of Apple - whose supply chain is now spared from not only the 145% tariffs on China, but also the 10% blanket tariff applied to all other territories.
- As a result, Apple's German listing has rallied near 9%, while their US shares are higher by over 6% pre-market. Similarly, NVIDIA are higher by 3%, Intel by 2.7% and Qualcomm by 2.1%.
- Naturally, the NASDAQ-100 future is leading the bounce - higher by 1.9% to extend the bounce off the low to over 15%. A further 3% rally in the index would erase the Liberation Day sell-off.
- Equity volatility now looks to earnings season this week - (our schedule here: https://mni.marketnews.com/4cnn1GO ). Highlights are:
- Monday: Goldman Sachs
- Tuesday: J&J, Bank of America, Citigroup
- Wednesday: Abbott Labs, Progressive Corp
- Thursday: American Express, Charles Schwab, UnitedHealth, Netflix
BTP: Outperform Following Surprising S&P Upgrade On Friday
Apr-14 08:17
- BTPs outperform after S&P’s upgraded Italy's sovereign rating to BBB+ (Outlook Stable) after hours on Friday. The decision was generally not expected, with Italy heading into the review with a Stable Outlook. That sees the 10-year BTP/Bund spread tighten 4.5bps to 119.5bps this morning, unwinding the majority of last week’s widening.
- BTP futures are +48 ticks at 118.58, just off earlier session highs of 118.63. Initial firm resistance to monitor is 119.07, the Apr 8 high. Clearance of this level would be a bullish reversal development. The April 10 low at 117.28 provides support.
- S&P wrote that “the upgrade reflects Italy's improved economic, external, and monetary buffers amid rising global headwinds, and the gradual progress it has made in stabilizing public finances since the pandemic's onset”.
- Although US tariffs will impact Italy’s open manufacturing-based economy, S&P noted that “significant increases in government spending on defense and public infrastructure” in Germany will partially offset the blow from US protectionism.
- The upgrade sees Italy’s rating with S&P move two notches above Moody’s Baa3 (Outlook Stable) and one notch above Fitch’s BBB (Outlook Positive). Moody’s are scheduled to review Italy on May 23.
GBP: Prolonged Tariff Reprieve and Stocks Strength Could See GBP Toward 1.34
Apr-14 08:09
- Following Liberation Day, GBP was a standout underperformer, as the UK economy signaled unique exposure to Trump's tariffs given the government's leniency toward countermeasures. The opposite is now true: with reciprocal tariffs delayed, GBP is now rallying well - underscoring GBP's correlation with risk - which looks through only marginal tweaks to monetary policy pricing.
- GBP strength today is accompanied by a further rally in the FTSE-100 (now ~7.5% off lows, but still ~9% off highs), despite the often observed inverse correlation between the two - which serves as a further signal that tariff reprieve and risk-on is the primary driver of this move, rather than a reorientation of BoE pricing for 2025.
- This makes EUR/GBP a key cross ahead. EUR's status as a quasi-safe haven through US-triggered volatility has seen the price hit near 18-month highs and the most technically overbought since 2022. As such, the cross could be subject to a sharper reversal should market jitters around tariffs further recede.
- Technically, moving average studies remain in a bull mode position that highlights a dominant uptrend. An extension higher would open key resistance and the bull trigger is 1.3207, the Apr 3 high.
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