MARKET WRAPS
Stocks:
European stocks were falling on Friday, following declines in Asia and extending this week's losses amid concerns about an escalation of trade conflicts .
"Despite months of sabre-rattling by Donald Trump, markets appear to have been unprepared for the depth and breadth of tariffs announced by the White House," Hargreaves Lansdown said.
Banks were hit particularly hard. Deutsche Bank, which has significant exposure to U.S. commercial real estate, fell 7%.
Market Insight
U.S. tariff plans make hopes of a recovery in the European industrial sector in the second half less likely to materialize, RBC Capital Markets said.
Tariffs are a hindrance to global trade and therefore also a headwind to demand fundamentals in the freight sector , JPMorgan said, noting that container shipping lines are most exposed.
U.K. domestic banks are more shielded than international peers from the turbulence in global markets caused by tariff announcements, Shore Capital wrote.
Asia-focused HSBC and Standard chartered were hit harder than their U.K. domestic counterparts NatWest, Barclays and Lloyds given Asian economies face the highest tariffs.
U.S. Markets:
Stock futures fell as the market continues to digest the impact of tariffs on the U.S. economy.
Jobs data due at 1230 GMT is likely to be overshadowed by the tariff fallout, CMC Markets said.
Investors will likely be interested in the number of public sector jobs eliminated and their impact on the unemployment rate.
Forex:
The euro is proving the surprise beneficiary in the tariff aftermath, as investors pull out of risky assets and out of the dollar, ING said.
Sterling extended Thursday's fall against the euro, as the latter has better liquidity during this time of substantial volatility, ING added. It also reflects investors changing their previous view that U.K. interest rates would stay higher relative to other major economies.
The dollar remained weak after the DXY index slumped to a six-month low on Thursday.
"The erratic nature of U.S. trade policy undermined investor confidence, " IG analysts said, noting that this has sparked fears of "a massive reallocation of capital away from U.S. markets."
Bonds:
The 10-year Bund yield fell to a one-month low as eurozone government bond yields followed Treasurys lower.
Eurozone peripheral government bond yield spreads over Bunds have been remarkably resilient following tariff announcements, Citi said.
"This resilience is partly rooted in strong economic data, with [Italian government bonds] BTPs closely tracking economic sentiment and the labor market," the U.S. bank said, adding however that Italy is one of the most exposed countries among the 11 largest eurozone issuers to tariffs.
Societe Generale Research said Bunds could notch up an even higher term premium versus Treasurys.
"Bunds' relative value is exposed to expectations of possibly even deeper, faster fiscal easing by Germany, which is the EU country hardest hit by U.S. tariffs."
The rally in global bond markets has scope to extend into the weekend, Commerzbank added.
"Today's labour market report, ahead of [Federal Reserve Chair Jerome] Powell's speech on the economic outlook, is unlikely to change this dynamic as the focus shifts to the domestic hurdles for economic growth."
Energy:
Oil prices were headed for a weekly loss of more than 5%.
Key downside risks to oil prices--tariff increases and somewhat higher OPEC+ supply--were being realized, Goldman Sachs said, cutting its average annual oil demand growth forecasts by nearly 400,000 bbls/day for 2025 and 500,000 bbls/day for 2026.
Oil and gas have been exempted from the new round of tariffs, but traders fear the policies could raise inflation and slow global economic growth , ultimately hurting demand for crude, BMI said.
OPEC+'s larger-than-expected supply increase for May is likely to widen the Brent-Dubai spread, Middle Eastern crude more attractive to Asian buyers, ING noted.
European natural-gas prices fell to their lowest level in four weeks, with the benchmark Dutch TTF contract trading below 40 euros a megawatt hour.
Metals:
Gold futures slid, but held close to record highs in volatile trading amid wider market turmoil.
The selloff on Thursday following tariff announcements creates a more attractive entry point for investors to take a long position, Goldman Sachs said.
EMEA HEADLINES
Trump's Trade War Won't Be Easy to Negotiate Away. Welcome to the New World Order.
The scope, speed and magnitude of the Trump administration's tariff blitz left investors with a lot of questions. But one point came through crystal clear: The post-World War II global world economic order is no longer.That is forcing a reassessment by countries on how to respond and pushing investors to reassess long-held assumptions about profit margins, investments, and inflation.
President Donald Trump on Wednesday unveiled a sweeping set of tariffs on top of other tariff-related moves in recent weeks that created uncertainty for companies and investors. But the decision to impose 10% baseline tariffs, effective on April 5, and another set of country-specific tariffs-as high as 49%-on countries that the administration singled out for trade deficits with the U.S. ended up being far higher than expected.
German Factory Orders Stagnated in February Despite Hints of Frontloading
German factory orders stagnated in February, a weaker-than-expected reading despite signs of frontloading ahead of tariffs that have roiled markets in recent days.
Manufacturing orders were unchanged on month in the second month of this year, after a 5.5% slump in January, German statistics agency Destatis said Friday. Economists polled by The Wall Street Journal expected a 3.5% uptick.
BP Chair Helge Lund to Step Down Amid Push for Changes at Oil Major
BP's Chairman Helge Lund will step down sometime next year, as activist investor Elliott Management pushes for changes at the British oil major.
The British energy company said Friday that it has started the search for Lund's replacement, whom he will work with to ensure an orderly transition process.
Shell to Sell Its Interest in Colonial Enterprises to Brookfield for $1.45 Billion
Shell said it would sell its 16.125% stake in Colonial Enterprises to Brookfield Infrastructure Partners for $1.45 billion as it continues to simplify is portfolio.
The British energy major said the sale is subject to regulatory approvals but is expected to complete in the fourth quarter of the year.
Santander Confirms Guidance After First-Quarter Growth
Santander said it expects to report growth for the first quarter of 2025 and confirmed its guidance for the year.
The Spanish bank should deliver a return on tangible equity of around 15.7% for the first three months and is on track to reach its 16.5% target for the year, it said in a statement ahead of its annual general meeting on Friday. This compares with 15.5% RoTE for 2024, according to a spokesperson.
Volvo to Increase Mexican Factory Investment to $1 Billion, Minister Says
Volvo will increase its investment in a truck factory it is building in Mexico to $1 billion, the country's economy minister said Friday.
Marcelo Ebrard said in a post on X that he had been informed by Volvo headquarters in Sweden of the planned investment, which represents a rise from the $700 million Volvo had originally earmarked for the project.
GLOBAL NEWS
Global Markets Continue Selloff After Trump Tariffs
Stock markets around the world continued their selloff Friday, bond yields slipped and oil slumped further after President Trump's plan to impose sweeping tariffs that were worse than expected.
The head of the World Trade Organization said late Thursday that global trade flows will likely fall this year while new rounds of retaliation will deepen the economic impact.
The Rest of the World Is Bracing for a Flood of Cheap Chinese Goods
President Trump's jumbo tariffs on China threaten to create a new problem for a global economy already stressed over trade: a $400 billion deluge of Chinese goods looking for new markets.
U.S. consumers and businesses learned Wednesday that, from April 9, Chinese imports will face tariffs of around 70% on average, after Trump walloped China with stiff new duties as part of his "Liberation Day" trade broadside. The new tariffs will likely push up prices in the U.S. for products ranging from consumer electronics and toys to machinery and essential components for manufacturing.
Americans Rush to Buy TVs, Soy Sauce, Lululemon Workout Gear
Since President Trump announced sweeping tariffs on imported goods Wednesday, Americans have been busy "adding to cart."
Cedar Roach promptly checked out on $244 of workout apparel from Lululemon (a Canadian brand) and a $150 sweater from House of Sunny (a U.K. brand) while Trump's press conference played over the radio. Her boyfriend, Sean MacKenzie, ran out to buy three eight-packs of Guinness, filling up their refrigerator's vegetable drawer with cans.
Trump Fires Director of National Security Agency
WASHINGTON-Gen. Tim Haugh, the chief of the National Security Agency, was fired Thursday at the direction of the White House, according to people familiar with the matter.
Haugh, who jointly helms U.S. Cyber Command, the military's combatant command for offensive use of cyberattacks, was informed by the White House that his services were no longer required, the people said, adding that his civilian deputy at the NSA, Wendy Noble, was also removed from her position, though she was reassigned to a job within the Pentagon.
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(END) Dow Jones Newswires
April 04, 2025 05:13 ET (09:13 GMT)
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