Morning wrap (17.04.2025)

Wall Street was dragged down yesterday by a sell-off in tech stocks after Donald Trump imposed restrictions on the sale of Nvidia’s H20 chips to China (Nasdaq: -3.1%, S&P500: -2.25%, DJIA: -1.7%, Russell 2000: -1%). Futures on U.S. indices are trading slightly in the green.

According to Jerome Powell, a weaker economy and elevated inflation would pose a threat to the Fed’s dual mandate, and unemployment and inflation are likely to “deviate from equilibrium” in 2025.

Hopes for a quick return to interest rate cuts have faded, which hit sentiment in the stock market, while boosting gold prices (+3% yesterday) and U.S. Treasury yields (+0.54%).

TSMC’s Q1 2025 results exceeded investor expectations. Net revenue reached 361.5 billion dollars (+60%, forecast: 346.76), with a margin of 58.8% (forecast: 58.1%).

Progress in U.S.-Japan trade negotiations sparked enthusiasm across the Asia-Pacific region. Gains were seen in China’s HSCEI (+1.2%), Japan’s Nikkei 225 (+0.85%), South Korea’s Kospi (+0.8%), and Australia’s S&P/ASX 200 (+0.64%).

Unemployment in Australia remained unchanged in March (4.1%), while employment change slightly missed expectations (32.2k, forecast: 40k).

CPI inflation in New Zealand rose in Q1 2025 above expectations (2.5% y/y, forecast: 2.4%, previous: 2.2%), though this did not reduce expectations of a 75 basis point rate cut in May. The price increase was driven by food, fuel, and education costs.

In the forex market, we’re seeing a downward correction in G10 currencies against the dollar (USDIDX: +0.18%), averaging a drop of 0.2–0.4%. The biggest losers are the Australian dollar (AUDUSD: -0.48%) and the yen, in response to Trump’s remarks about “major progress” in tariff negotiations with Japan (USDJPY: +0.48%). The Swiss franc, previously a major winner from dollar weakness, is also retreating (USDCHF: +0.4%). EURUSD is down 0.3% to 1.1366.

Gold is undergoing a slight correction from yesterday’s euphoria (-0.3% to $3,333/oz), with silver also down (-0.7% to $32.53/oz).

Brent and WTI oil continue to rise after yesterday’s DOE report (up 1.3% and 1.6%, respectively), and natural gas futures are also rebounding (+0.3%).

Crypto sentiment remains positive. Bitcoin is up 0.15% to $84,440, Ethereum +1.8% to $1,600, with gains also seen in Chainlink (+1.3%), Dogecoin (+0.7%), Sushi (+0.9%), and Solana (+0.1%).

The key macro event today will be the ECB’s decision on interest rates in the Eurozone.