• APAC stocks traded mixed with most indices rangebound despite the sell-off on Wall St after President Trump renewed his criticism against Fed Chair Powell.
• European equity futures indicate a lower cash market open with Euro Stoxx 50 future down 0.5%.
• DXY has extended on recent downside with JPY the main beneficiary, EUR/USD is above the 1.15 mark.
• Bunds are rangebound on return from the long weekend, crude futures have continued the mild rebound from the prior day's trough.
• Looking ahead, highlights include Canadian PPPI, US Richmond Fed Index, EZ Consumer Confidence, ECB’s Knot, de Guindos, BoE’s Breeden, Fed’s Jefferson, Harker, Kashkari, Kugler & Barkin, Supply from Germany & US.
• Earnings from SAP, Iberdrola, Tesla, Verizon, GE Aerospace, Lockheed Martin, Danaher & Elevance.

SNAPSHOT

US TRADE

EQUITIES

• US stocks tumbled and the Treasury curve steepened in response to further pressure from US President Trump on Fed Chair Powell to lower interest rates, while it remains to be seen if the President can fire Powell and NEC Director Hassett suggested Trump is studying ways on how to do this. As such, the fears of killing Fed independence from the government sparked the risk-off session and the front end of the curve saw yields fall on the potential for earlier rate cuts, although the longer end of the curve saw yields rise as cutting rates too early could boost inflation.
• SPX -2.36% at 5,158, NDX -2.46% at 17,808, DJI -2.48% at 38,170, RUT -2.06% at 1,842.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Commerce Department finalised dumping duties ranging from 6.1% to 271.28% on solar cells imported from Cambodia, Malaysia, Thailand and Vietnam.
• US Trade Representative's statement confirmed that USTR Greer and India's Ministry of Commerce and Industry have finalised terms of reference to lay down a roadmap for negotiations on reciprocal trade and stated that India's constructive engagement so far has been welcomed.
• US VP Vance's office issued a statement on meeting with Indian PM Modi and noted that the two made progress on a US-India trade agreement.
• Japanese negotiators are reportedly complaining that the problem with the trade negotiations with the White House is that the US keeps changing its asking terms of what exactly it wants, according to FBN's Gasparino.
• South Korea's Acting President Han said he expects South Korea-US trade talks this week to pave the way towards a mutually beneficial solution.

NOTABLE HEADLINES

• Fed's Goolsbee (2025 voter) said "We have got short-run inflation expectations up, but long-run expectations are not rising and that is very important". Goolsbee said the Fed needs to look to where things will be through this year and that tariffs are one input and one shock to the economy but added that the impact of tariffs on the macro economy could be modest.
• US President Trump posted on Monday "“Preemptive Cuts” in Interest Rates are being called for by many. With Energy Costs way down, food prices... substantially lower, and most other “things” trending down, there is virtually No Inflation. With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. Europe has already “lowered” seven times. Powell has always been “To Late,” except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?"
• WSJ's Timiraos wrote "Trump Is Laying the Groundwork to Blame Powell for Any Downturn" and is signalling he will blame the Fed for any economic weakness resulting from his trade war if it doesn't cut rates soon.
• It was initially reported that the White House has begun the search for a new Secretary of Defense, according to NPR. However, the White House Press Secretary denied this and affirmed that the President stands strongly behind the Secretary of Defense.
• US Securities and Exchange Commission announced Paul Atkins was sworn in as chairman.

APAC TRADE

EQUITIES

• APAC stocks traded mixed with most indices rangebound despite the sell-off on Wall St where stocks and the dollar were pressured after President Trump renewed his criticism against Fed Chair Powell.
• ASX 200 was little changed as strength in mining stocks and gold producers were offset by losses in tech, energy and healthcare, while price action was also hampered by the absence of any key data.
• Nikkei 225 struggled for direction and swung between gains and losses in relatively contained parameters amid a choppy currency and slightly higher Japanese yields.
• Hang Seng and Shanghai Comp conformed to the mixed picture for most of the session with the Hong Kong benchmark initially pressured on return from the Easter weekend, while the mainland was kept afloat amid earnings and positive EV-related updates.
• US equity futures (ES +0.4%, NQ +0.4%) nursed some of their losses as participants brace for a pick up in earnings reports.
• European equity futures indicate a lower cash market open with Euro Stoxx 50 future down 0.5%.

FX

• DXY weakened again with the DXY firmly beneath the 99.00 level as US assets continued to lose their appeal amid economic uncertainty regarding tariffs and questions about Fed autonomy after President Trump continued to ramp up his criticism against Powell and called for him to lower rates, while the latest rhetoric from Fed's Goolsbee provided very little new information.
• EUR/USD held on to the prior day's spoils after benefitting from the dollar selling which had lifted the pair above 1.1500 to print its strongest since late 2021 before gradually fading some of the advances.
• GBP/USD retested and reclaimed the 1.3400 level to the upside owing to the weaker buck but with further upside limited amid quiet catalysts and with UK markets set to reopen from the Easter holiday.
• USD/JPY was choppy after dipping to sub-141.00 territory and amid the flimsy risk appetite in Japan but later succumbed to another bout of dollar selling.
• Antipodeans were initially rangebound owing to the mixed risk appetite and in the absence of any tier-1 data releases although eventually benefitted from the pressure in the greenback.
• PBoC set USD/CNY mid-point at 7.2074 vs exp. 7.2925 (Prev. 7.2055).

FIXED INCOME

• 10yr UST futures remained subdued after the prior day's whipsawing and curve steepening in which front-end yields fell following Trump's renewed attack on Powell and call for the Fed to lower rates, while long-end yields rose amid concerns that lower interest rates would only boost inflation further.
• Bund futures were rangebound on return from the long weekend and amid very few catalysts.
• 10yr JGB futures resumed their declines alongside higher domestic yields and after a source report noted the BoJ is likely to keep its rate-hike signal intact at its meeting next week despite Trump tariff risks.

COMMODITIES

• Crude futures continued the mild rebound from the prior day's trough with the recovery helped amid reports that Israel's air force conducted drills simulating missile and rocket attacks on its bases which were the same ones targeted in previous Iranian strikes in April and October last year.
• Spot gold extended on its rally and printed a fresh record high just shy of the USD 3,500/oz level.
• Copper futures gained amid a softer dollar and resilience in the red metal's largest buyer.

CRYPTO

• Bitcoin mildly gained overnight and rose back above the USD 88,000 level.

NOTABLE ASIA-PAC HEADLINES

• Japanese Finance Minister Kato said finance authorities are to ask banks to help support financing at small companies affected by US tariffs, while he is arranging to hold a meeting with US Treasury Secretary Bessent and plans to discuss forex issues.

GEOPOLITICS

MIDDLE EAST

• Israeli Air Force conducted drills simulating missile and rocket attacks on its bases which were the same ones targeted in previous Iranian strikes in April and October 2024, while the exercise aims to boost readiness in case US-Iran nuclear talks collapse, according to a Kan News report.
• US aggression reported with two raids on the Majzar district in Marib, Yemen, according to Al Jazeera citing Ansar Allah Media.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said a Ukrainian delegation is to hold talks in London with the UK, France and US representatives on Wednesday. Zelensky later commented that Ukraine stands by its proposal for an end to attacks on civil targets and is waiting for Russia's reply, while he added that Ukraine is ready for any conversation on how to achieve this and the first task of talks in London this week is to secure an unconditional ceasefire as a starting point.
• US President Trump said they had good meetings on Ukraine, Russia, and Iran, while he added the US may meet on Wednesday with Ukraine and European allies on the peace plan and there is a good chance of a Russia and Ukraine deal this week.
• Kremlin spokesman Peskov said Russian President Putin's comments on Monday that it was possible to discuss the issue of not striking the civilian targets, including bilaterally, he had negotiations and discussions with the Ukrainian side in mind.