• China is said to consider exempting some US goods from tariffs as costs increase with Chinese authorities considering removing additional levies for medical equipment and some industrial chemicals like ethane, according to Bloomberg citing sources familiar with the matter.
• US President Trump said either countries negotiate a deal or they will set a deal and some will be tariffed, at some point, while they will set prices for deals.
• US President Trump reiterated that he hopes the Fed lowers interest rates and they should, while he reiterated criticism that the Fed is late.
• US equity futures slightly extended on the prior day's gains after reports of China flinching on tariffs; Alphabet shares rose 6.4% after market.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.5% after the cash market closed with gains of 0.3% on Thursday.
• Looking ahead, highlights include UK Retail Sales, Speakers including SNB’s Schlegel & Steiner, BoE's Greene, ECB's Nagel, Rehn & Cipollone, Earnings from Safran, SLB, AbbVie, Phillips 66 & Centene.

SNAPSHOT

• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks continued to move higher with sentiment supported by trade optimism after US President Trump hinted at talks with China and although China denied such talks were occurring, President Trump still noted that they had a meeting with China that morning. Furthermore, the Trump administration was said to be considering exceptions for some Chinese auto parts, while reports also noted that talks were going well with India and Treasury Secretary Bessent said things were moving quicker than thought with South Korea.
• SPX +2.03% at 5,485, NDX +2.79% at 19,214, DJI +1.23% at 40,093, RUT +2.00% at 1,958.
• Click here for a detailed summary.

TARIFFS/TRADE

• China is said to consider exempting some US goods from tariffs as costs increase with Chinese authorities considering removing additional levies for medical equipment and some industrial chemicals like ethane, according to Bloomberg citing sources familiar with the matter. It was also reported that several Chinese tech companies confirmed that eight tariff codes related to semiconductors and integrated circuits are now exempt from additional tariffs, according to Caijing.
• US President Trump said either countries negotiate a deal or they will set a deal and some will be tariffed, at some point, while they will set prices for deals. Trump also said he will meet with world leaders in Rome and that leaders want to meet on trade. Furthermore, Trump insisted that they had a meeting with China on Thursday morning despite China's denial but didn't disclose who was involved.
• US posted a notice on some China tariff levels notice applies to 'low-value imports' from China and Hong Kong which eliminates the de minimis exemption, according to Bloomberg.
• US President Trump said he had talks with Norway about war and trade, while they made a lot of progress and the next few days will be very important. Furthermore, Trump said he and the Norwegian PM get along well on trade and have no problem with Norway on trade.
• US Treasury Secretary Bessent said he had a good meeting with South Korea and they are moving faster than thought, while they will talk technical terms and could get to terms next week.
• South Korea's Trade Minister said South Korea and the US agreed in principle on the framework for trade talks. It was also reported that South Korea's Finance Minister said they will try their best to produce meaningful results by July 8th and that autos were in focus during talks, while the two countries reached common ground on discussing measures on tariffs and non-tariff barriers, economic security, investment cooperation, and currency policy. Furthermore, technical-level talks between South Korea and the US will be held in Seoul on May 15th-16th and South Korea's Industry Minister said they reached a common ground on shipbuilding cooperation with the US.
• Japanese Finance Minister Kato met US Treasury Secretary Bessent and told him that US tariffs are deeply regretful, while they agreed the FX rate should be set by markets and that excessive volatility has an adverse effect on the economy. It was also reported that Japan is weighing buying more US soybeans as part of a tariff deal and is also considering boosting US corn imports.
• Canadian PM Carney said regarding US President Trump's comments in not wanting Canada's cars that "we decide what happens here" and the remarks are more proof that Canada's old relationship with the US is over.
• Canadian Finance Minister Champagne said they need to fight against the US tariffs, which are still affecting a large portion of Canadian goods. Furthermore, he said the scheduling was too tight for a bilateral meeting with US Treasury Secretary Bessent but they did interact at the G7 meeting in Washington.
• UK Chancellor Reeves said she understands US concerns on trade imbalances, especially in China and they don't always agree with the US on policy prescriptions but is confident a trade deal can be done.
• German Finance Minister Kukies said there is a willingness on both US-EU sides in a trade deal and that Germany avoiding a recession is the biggest hurdle this year. Furthermore, he said the EU will implement countermeasures if there is no trade deal with the US and stated that zero-zero tariffs would be the most efficient outcome.

NOTABLE HEADLINES

• Fed's Kashkari (2026 voter) said a resolution of trade frictions would relieve uncertainty and would be optimistic, while he is worried that businesses will resort to layoffs amid uncertainties and noted some businesses say they are scenario planning for potential layoffs if uncertainty lasts although he is not seeing an uptick in layoffs yet. Furthermore, Kashkari said the frequency of announcements out of Washington has created a challenge for policymakers and for everybody.
• US President Trump reiterated that he hopes the Fed lowers interest rates and they should, while he reiterated criticism that the Fed is late.
• US President Trump signed an executive order boosting the deep-sea mining industry, while the order instructs the Commerce Secretary to expedite permits under the Deep Seabed Hard Mineral Resource Act, as well as instructs the Commerce and Interior Departments to issue a report on opportunities for seabed mineral exploration on the US outer continental shelf.
• US Republicans in Congress are to unveil a USD 150bln defence spending package including USD 27bln for President Trump’s Golden Dome missile defence and USD 29bln for shipbuilding.

AFTER-MARKET EARNINGS

• Alphabet (GOOGL) Q1 2025 EPS 2.81 (exp. 2.00), Rev. 90.23bln (exp. 89.28bln), Co. authorised USD 70bln buyback of shares and raised dividend by 5%. Shares rose 6.4% after market.
• Intel (INTC) Q1 2025 Adj. EPS 0.13 (exp. 0.01), Rev. 12.70bln (exp. 12.20bln). Shares fell 5.1% after market.
• T-Mobile US (TMUS) Q1 2025 EPS 2.58 (exp. 2.48), Rev. 20.89bln (exp. 20.61bln). Shares fell 5.5% after market.

APAC TRADE

EQUITIES

• APAC stocks mostly gained as the region took impetus from the rally on Wall St amid trade-related optimism after President Trump suggested that the US and China held talks despite a denial by the latter. However, conditions were somewhat quieter for most of the session with the absence of markets in Australia and New Zealand for a holiday, although there was a slight boost on reports that China is said to consider exempting some US goods from tariffs.
• Nikkei 225 rallied at the open but with further gains initially capped as participants digested firmer-than-expected Tokyo CPI before the China tariff story provided a late tailwind.
• Hang Seng and Shanghai Comp were somewhat varied as the Hong Kong benchmark rallied amid strength in property, tech and casino stocks, while the mainland lagged following the conflicting statements by the US and China on whether trade talks took place.
• US equity futures slightly extended on the prior day's gains after reports of China flinching on tariffs.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.5% after the cash market closed with gains of 0.3% on Thursday.

FX

• DXY nursed recent losses after retreating amid the broad risk-on sentiment on Wall St and with the DXY not helped by mixed data releases, as well as dovish comments from Fed officials including Hammack who noted the Fed could move in June if data is clear about the economy's state which spurred money markets to price a 75% chance of a 25bps cut in June vs. 60% prior to the comments. Nonetheless, the rebound in the dollar was further helped by reports of China considering exempting some US goods from higher tariffs.
• EUR/USD gave back the prior day's gains after hitting resistance just shy of the 1.1400 handle as the greenback regained composure, while there were comments from ECB's Rehn who noted it is way too early to take a position if June is a cut or a hold.
• GBP/USD failed to sustain the 1.3300 status as the dollar rebounded, while there was little reaction seen to recent BoE rhetoric and participants now look ahead to UK Retail Sales data.
• USD/JPY reclaimed the 143.00 level to the upside which was facilitated by a rebound in the dollar, China tariff headlines, the positive risk appetite and some suggestions of Gotobi demand.
• Antipodeans were uneventful amid the market closures on both sides of the Tasman for ANZAC Day.
• PBoC set USD/CNY mid-point at 7.2066 vs exp. 7.2898 (Prev. 7.2098).

FIXED INCOME

• 10yr UST futures were ultimately flat but held on to most of the prior day's gains after prices were supported by dovish comments including from Fed's Waller who continued to suggest he is willing to look through price increases and warned that data focus brings a risk of being late on policy action, while Fed's Hammack said it is too early to consider a move at the May FOMC but opened the door to a cut in June.
• Bund futures mildly pulled back after climbing to just shy of the 132.00 level yesterday despite stronger-than-expected German IFO data and the slew of central bank rhetoric including from ECB's Holzmann who said rate cuts must wait for some more tariff certainty.
• 10yr JGB futures gapped lower following the acceleration in Tokyo CPI data which serves as a leading indicator for national price trends and supports the case for the BoJ to continue with its policy normalisation once trade and tariff uncertainty dissipates.

COMMODITIES

• Crude futures eked mild gains but with the upside limited following yesterday's choppy performance and ahead of US-Iran technical nuclear talks on Saturday.
• Ecopetrol said Shell (SHEL LN) pulled out of joint offshore projects and it is evaluating the strategy to ensure continuity of gas projects in the Southern Caribbean after Shell's exit.
• UK's Unite said TotalEnergies (TTE FP) workers balloted for strike action and that around 50 Unite members based on the Elgin Franklin and North Alwyn platforms are involved.
• Spot gold pulled back overnight as the dollar strengthened amid reports that China is considering exempting some US goods from additional tariffs.
• Copper futures traded indecisively following the recent price swings and as Chinese markets lagged following conflicting statements from the US and China on whether they conducted trade talks.

CRYPTO

• Bitcoin mildly retreated overnight after failing to sustain a brief return above the USD 94,000 level.
• US Federal Reserve withdrew guidance requiring banks to seek advance notice before pursuing crypto activities and with the FDIC and Office of the Comptroller of the Currency, withdrew 2023 statements urging banks to exercise vigilance around crypto activities.
• Fed's Kashkari (2026 voter) said crypto is useless in an advanced economy and it has been 15 years and a use-case hasn't been demonstrated, while he added it is up to Congress to regulate crypto.

NOTABLE ASIA-PAC HEADLINES

• PBoC Governor Pan affirmed monetary policy is to be moderately loose and said they will defend global economic stability, while he vowed to drive the Chinese economy and said China’s economy is off to a good start, continues to rebound positively, and the financial market is running smoothly.
• China’s Finance Minister attended the G20 meeting in Washington and said the current world economic growth momentum is insufficient and tariff wars and trade wars have further affected economic and financial stability.
• Japanese PM Ishiba said he decided on a package of measures to deal with US tariffs and instructed cabinet members to do the utmost to aid small and medium-sized enterprises that will be affected.
• Donald Trump Jr is to meet South Korean business leaders on April 30th, according to Yonhap.

DATA RECAP

• Tokyo CPY YY (Apr) 3.5% vs Exp. 3.4% (Prev. 2.9%)
• Tokyo CPY Ex. Fresh Food YY (Apr) 3.4% vs Exp. 3.2% (Prev. 2.4%)
• Tokyo CPY Ex. Fresh Food & Energy YY (Apr) 3.1% vs Exp. 2.8% (Prev. 2.2%)

GEOPOLITICS

MIDDLE EAST

• US President Trump said they are having very serious meetings with respect to Iran and thinks they are doing well with Iran.
• US State Department Director of Policy Planning Anton and Special Envoy Witkoff will be in Oman for a technical meeting with Iran on Saturday, while the IAEA plans to send a team to Iran this week.
• China, Russia, and Iran IAEA representatives met with the IAEA Director General on Thursday and had in-depth communication on how the IAEA can play its role in serving the political and diplomatic settlement process of the Iranian nuclear issue.
• US is poised to offer Saudi Arabia an over USD 100bln arms package during President Trump’s visit to the kingdom in May.

RUSSIA-UKRAINE

• US President Trump said he thinks Russian President Putin will listen to him on stopping strikes in Ukraine, while he added that Ukraine and Russia both have to come to the table and both sides want to make peace. Trump also commented that he has his own deadline and after the deadline, there will be a different attitude.
• US President Trump repeated he was not happy with the Russia strike and is putting a lot of pressure on both sides, while he would prefer to answer questions about Russia sanctions in a week and thinks it will be very difficult for Ukraine to get Crimea back. Furthermore, Trump said that both sides want peace now and he doesn’t think Russia is an obstacle to peace.
• US is to demand Russian President Putin accept Ukraine’s right to military force, according to Bloomberg.
• Ukrainian President Zelensky said the overnight Russian strike that hit a residential building in Kyiv used a North Korean missile. Zelensky also quoted a Ukrainian top commander who stated Russians tried to use cover from their airstrikes to intensify ground attacks but were repelled.
• Ukraine’s Finance Minister Marchenko said the US and Ukraine made progress on the critical minerals deal, but won’t seal a deal this week, while it was also reported that US Treasury Secretary Bessent wants the issue of frozen Russian assets to be part of broader discussions.
• Russian Foreign Minister Lavrov said the US and Russia are moving in the right direction towards the deal.
• NATO Secretary General Rutte said he had a good meeting with US President Trump and discussed Ukraine, while he does not know if Russian President Putin wants peace but added that something is on the table for Russia-Ukraine and the ball is in Russia's court. Furthermore, Rutte said it is not accurate that the US pressured Ukraine to accept a deal that favours Russia.

OTHER

• India reportedly cancelled the ceasefire with Pakistan with immediate effect.

EU/UK

NOTABLE HEADLINES

• BlackRock (BLK) CEO Fink said he's buying up ‘undervalued’ UK assets and is more confident about the investment prospects for the UK than this time last year, according to The Times.
• ECB's Knot said the medium-term impact of tariffs on inflation is unclear and it is way too early to take a position if June is a cut or a hold, according to CNBC.
• ECB's Rehn said tariffs have a dampening effect on inflation in the short and medium term, while fiscal spending will only have an effect from 2026 onwards.

DATA RECAP

• UK GfK Consumer Confidence (Apr) -23.0 vs. Exp. -22.0 (Prev. -19.0)