• US weighs a plan to slash China tariffs to as low as 50% from 145% as soon as next week, according to the New York Post citing sources. US President Trump said China tariffs can't get any higher than 145% and know it's coming down.
• US President Trump said, "Better go out and buy stocks now" and commented that the stock market will really rally now.
• US stocks closed off today's best levels amid reports that President Trump is pushing for a new top tax rate on the highest earners.
• APAC stocks traded with a positive bias as the region took impetus from the gains stateside, where sentiment was underpinned by trade optimism following the announcement of a UK-US trade agreement framework and President Trump's rhetoric regarding China tariffs.
• European equity futures indicate a marginally positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market closed with gains of 1.1% on Thursday.
• Looking ahead, highlights include Canadian Jobs, Speakers including BoE’s Bailey & Pill, Fed’s Barr, Kugler, Perli, Williams, Goolsbee & Waller, Earnings from IAG, Rightmove, Bechtle & Commerzbank.

US TRADE

EQUITIES

• US stocks gained with sentiment underpinned by trade-related optimism after US President Trump confirmed a US-UK trade framework agreement and commented that China tariffs cannot go higher and will come down, which provided some encouragement ahead of US-China trade talks this weekend in Switzerland.
• Furthermore, the NY Post also reported that the US is weighing lowering China tariffs to as low as 50% from 145% as an olive branch for negotiations with China, although stocks closed off today's best levels amid reports that President Trump is pushing for a new top tax rate on the highest earners.
• SPX +0.58% at 5,664, NDX +0.98% at 20,064, DJI +0.62% at 41,368, RUT +1.85% at 2,026.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said China tariffs can't get any higher than 145% and know it's coming down. Trump also said they are going to have a large share of the chipmaking market, and noted that China talks will be substantive and China wants to do something. Furthermore, he wants to compete in China and wants China to let US businesses in, while he reiterated that China wants to make a deal and he would not be surprised if a trade deal is reached with China
• US President Trump thinks the 10% baseline is set and is not a template for future deals, while he added that 10% is a low number and others will be higher. Furthermore, he said a template of 10% is probably the lower-end and that he won't do a similar deal with cars.
• US weighs a plan to slash China tariffs to as low as 50% from 145% as soon as next week, according to the New York Post citing sources. The report noted that sources close to the negotiations said US officials are discussing a proposal to lower President Trump’s punishing levy on China goods to between 50% and 54% as they begin what promise to be lengthy talks to hammer out a trade agreement, while trade taxes on neighbouring south Asian countries would be cut to 25%. Furthermore, a source said they are going to be bringing it down to 50% while the negotiations are ongoing regarding tariffs on China.
• US Commerce Department said the US-UK deal removes UK market barriers for US exports of products including ethanol, beef, fruits, vegetables, animal feed and tobacco, while it noted that UK car manufacturers are limited to a 100k per year vehicle quota at a reciprocal rate of 10%, and thereafter will pay 25%.
• US Commerce Secretary Lutnick said deals will be used as templates for other deals and that they will have dozens of deals announced by July 8th. Lutnck stated that as you get to bigger economies and more work, it takes time and economies such as India, Japan and South Korea are huge and take a lot of work, while he added that de-escalation with China is US Treasury Secretary Bessent's goal in talks and that as countries open their markets, the best any country can do is a 10% tariff.
• USTR Greer said this is the framework, when asked about UK trade deal and that other countries should look to this as a model. Greer said they will have more deals in the weeks and months to come and when 90-days are up, they will see other deals, according to CNBC.
• Detroit Three trade group said the Trump trade deal with the UK "hurts American automakers, suppliers and auto workers".
• UK Trade Secretary Reynolds said cutting 10% US base tariffs is subject to further talks, and beef imports from the US would comply with UK rules. It was also reported that a UK official said they've got more serious work to do and got some reassurance on movie tariffs. The official also noted there is a commitment to bring down or totally liberalise a large number of tariff lines and on the sectoral front, there are vital wins for the UK on steel, autos, pharma, and aerospace.
• German Chancellor Merz and US President Trump agreed on the need to quickly resolve trade disputes during a phone call.
• China's Vice Foreign Minister Hua said the US cannot sustain what it is doing in trade policy and that China has full confidence in its ability to manage US trade issues. Hua added that China does not want a war of any kind with any other country and has full capability to overcome difficulties amid the trade war, as well as noted that ordinary people in China do not want a trade war but are confident and said they have no fear if they have to face up to reality regarding trade talks.
• China signed a letter of intent with exporters in Argentina to buy about USD 900mln of soybeans, corn and vegetable oil - in turn shifting from the US, according to Bloomberg.

NOTABLE HEADLINES

• US President Trump reportedly privately urged House Speaker Johnson to raise the top tax rate and close the carried interest loophole, while Trump is pushing for a new tax bracket in which individuals making USD 2.5mln or USD 5mln jointly would go to 39.6%, according to Punchbowl's Sherman.
• US President Trump said "Better go out and buy stocks now" and commented that the stock market will really rally now.
• US President Trump posted on Truth that he spoke with Commerce Secretary Lutnick and agreed the “Digital Equity Act” is unconstitutional, which he is ending immediately and there will be no more woke handouts based on race, saving taxpayers billions of dollars.
• US VP Vance said President Trump is right about Fed Chair Powell and that the latter is 'way too late' in helping fight back against some trade deals.

APAC TRADE

EQUITIES

• APAC stocks traded with a positive bias as the region took impetus from the gains stateside, where sentiment was underpinned by trade optimism following the announcement of a UK-US trade agreement framework and President Trump's rhetoric regarding China tariffs.
• ASX 200 gained as outperformance in tech, financials and energy more than atoned for the slack in mining stocks, while earnings also provided a tailwind after an increase in profits for Macquarie Group.
• Nikkei 225 returned to above the USD 37,000 level for the first time since late March with the index propelled by recent currency weakness, while the data was mixed as Household Spending topped forecasts but Labour Cash earnings softened.
• Hang Seng and Shanghai Comp were cautious amid the latest Chinese trade data which topped forecast but showed a slowdown in export growth, although downside was limited ahead of US-China talks on Saturday and after recent comments from President Trump who expects tariffs to go down, while the US was also reportedly weighing a plan to slash China tariffs to as low as 50% as soon as next week.
• US equity futures were rangebound with recent choppy price action due to trade optimism and reports that President Trump is pushing for a new tax bracket in which the rate for individuals making USD 2.5mln or would rise to 39.6%.
• European equity futures indicate a marginally positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market closed with gains of 1.1% on Thursday.

FX

• DXY attempted to build on its post-FOMC gains with a firm footing above the 100.00 level as confidence in the US economy gradually returned owing to trade-related optimism, while recent data releases were mixed, although Initial Jobless Claims fell and Unit Labour Costs accelerated.
• EUR/USD initially gave way to the firmer buck and tested the 1.1200 level to the downside before rebounding off lows, while the single currency had previously lost ground to GBP in the aftermath of the BoE's rate decision and surprise vote split.
• GBP/USD continued to trickle lower after having wiped out the initial gains from yesterday's BoE rate decision and despite the announcement of a US-UK trade agreement framework, as the recent strength in the dollar dominated the FX space.
• USD/JPY took a breather after coat-tailing on sentiment and higher US yields which has briefly lifted the pair above 146.00.
• Antipodeans were somewhat choppy after the recent dollar strength and as participants digested the latest Chinese trade data, while Westpac adjusted its RBNZ call and now sees two 25bps rate cuts by July instead of its prior view for just one cut.

FIXED INCOME

• 10yr UST futures lingered near this week's trough following recent upside in yield, trade optimism, and a weak 30yr auction.
• Bund futures were subdued after slumping yesterday amid the risk-on mood and stronger-than-expected German data.
• 10yr JGB futures tracked the losses in global counterparts but were off lows as participants also digested mixed data in which Household Spending topped forecasts but Labour Cash Earnings printed softer-than-expected.

COMMODITIES

• Crude futures took a breather after rallying yesterday amid the heightened risk appetite and trade optimism.
• Spot gold initially dipped beneath the prior day's lows before recovering to above the USD 3,300/oz level.
• Copper futures extended on its mid-week pullback with selling exacerbated as Chinese markets got underway and with the PBoC's open market operations resulting in the largest weekly net drain in two months, while participants also reflected on the latest Chinese trade data.
• Chile's Codelco copper production rose 14.8% Y/Y in March to 123,200 metric tons, while Escondida copper production rose 18.9% to 120,600 metric tons and Collahuasi copper production fell 29.3% Y/Y to 35,200 metric tons.

CRYPTO

• Bitcoin pulled back overnight after recently rallying to briefly above the USD 103k level to print its highest in three months.
• US Treasury Secretary Bessent said the world needs American leadership for stablecoins and other digital assets to thrive globally, while he added the Senate missed an opportunity to provide that leadership by failing to advance the GENIUS Act.

NOTABLE ASIA-PAC HEADLINES

• PBoC injected CNY 77bln via 7-day reverse repos with the rate at 1.40% for a net weekly drain of CNY 781.7bln, which was the most in two months.

DATA RECAP

• Chinese Trade Balance USD (Apr) 96.18B vs. Exp. 89.0B (Prev. 102.64B)
• Chinese Exports YY (USD)(Apr) 8.1% vs. Exp. 1.9% (Prev. 12.4%)
• Chinese Imports YY (USD)(Apr) -0.2% vs. Exp. -5.9% (Prev. -4.3%)
• Chinese Trade Balance (CNY)(Apr) 690.0B (Prev. 736.7B)
• Chinese Exports (CNY)(Apr) 9.3% (Prev. 13.5%)
• Chinese Imports (CNY)(Apr) 0.8% (Prev. -3.5%)
• Japanese Overall Labour Cash Earnings (Mar) 2.10% vs. Exp. 2.40% (Prev. 3.10%, Rev. 2.70%)
• Japanese All Household Spending MM (Mar) 0.4% vs. Exp. -0.5% (Prev. 3.5%)
• Japanese All Household Spending YY (Mar) 2.1% vs. Exp. 0.2% (Prev. -0.5%)

GEOPOLITICS

MIDDLE EAST

• US President Trump said they are trying to work on Iran without getting into bombing, while it was separately reported that US President Trump had a private meeting with Israeli PM Netanyahu's advisor ahead of his Middle East trip, according to Axios.

RUSSIA-UKRAINE

• US President Trump posted on Truth that talks with Russia and Ukraine continue, while he called for a 30-day unconditional ceasefire and said that hopefully, an acceptable ceasefire will be observed, and both countries will be held accountable for respecting the sanctity of these direct negotiations. Furthermore, he warned if a ceasefire is not respected, the US and its partners will impose further sanctions.
• Ukrainian President Zelensky said Ukraine is ready for an immediate 30-day ceasefire and that a 30-day ceasefire will be a real indicator of movement towards peace.
• Ukrainian official said Russia struck eight settlements in the Zaporizhzhia region with drones and artillery 220 times during the ceasefire.
• US VP Vance said the US would walk away from Russia and Ukraine talks if it concludes Russia is not engaging in 'good faith', according to a Fox News interview.
• Russian President Putin aide Ushakov said Russia and the US are approaching a possible meeting between Russian President Putin and US President Trump, according to RIA.
• German spokesperson said Chancellor Merz spoke with US President Trump by phone and agreed to cooperate on ending the war in Ukraine.
• UK PM Starmer is to announce the largest ever sanctions package targeting shadow fleet as UK ramps up pressure on Russia, according to the UK government.

OTHER

• North Korea said it tested a Hwasong-11 missile and multiple launch rockets on Thursday and the test was conducted under the nuclear weapons defence system, while North Korean leader Kim stressed the combat readiness of nuclear forces, according to KCNA.
• China and Russia's joint statement vowed to strengthen cooperation to safeguard the authority of international law and they both strongly opposed unilateral sanctions and long-arm jurisdiction, while they also opposed the practice of double standards or imposition by some states of their will on other states.