MARKET WRAPS
Watch For:
EU money supply; trading update for H&M
Opening Call:
European stock futures were lower, after Asia stocks were mixed. The dollar weakened. Gold and oil were higher.
Equities:
European futures pointed to a lower open as new U.S. automotive tariff plans weighed on Wall Street overnight, as the recent tech rebound started to falter.
Most automotive experts didn't believe tariffs will ever happen, said RBC analyst Tom Narayan, adding they would be "so destructive to the auto industry," calling the 25% tariffs as a potential "disaster" but a "low probability" one.
Webush's Dan Ives said that he isn't convinced the auto tariffs are permanent.
"These initial tariffs (if they hold in their current form) would be a hurricane-like headwind to foreign (and many U.S.) auto makers," he said.
Forex:
The dollar index weakened as forex markets fluctuated on additional tariff-related news overnight.
Currency traders are not yet completely pricing in firmer commitments to tariffs on April 2, the deadline by which President Donald Trump plans to announce reciprocal moves on U.S. trading partners, Barclays said in a note.
"In the eyes of both our and street economists, the potential tariff impact along with the associated economic uncertainty are key culprits for global stagflation fears and the potential end of U.S. exceptionalism," it said.
Bonds:
Markets remained focused on tariffs and growth momentum, but U.S. Treasury yields have room to move a bit higher in the near term, strategists at TD Securities said in a note.
Later this year, however, they expect the Treasury curve to steepen, to be driven by a faster fall of short-dated Treasury yields than long-dated ones.
"We expect rates to move lower during the year, accelerating in the second half as we look for cuts to resume," they said.
Energy:
Oil edged higher amid concerns over supply. U.S. commercial crude oil stockpiles, excluding the Strategic Petroleum Reserve, fell by 3.3 million barrels last week, according to the Energy Information Administration.
The inventory drawdown reflects robust domestic demand, mainly supported by increased activity at U.S. refineries, Pepperstone research strategist Quasar Elizundia said.
Despite the economic risks from trade tensions, the current balance between strong U.S. demand and supply constraints due to geopolitical factors is creating a bullish environment for oil, Elizundia said.
Metals:
Gold is likely to rise further than previously expected this year, thanks to upside surprises in ETF inflows and in continued strong central bank demand, Goldman Sachs Commodities Research said.
Raising its year-end forecast to $3,300/oz from $3,100/oz, Goldman Sachs projects the precious metal to trade within $3,250/oz-$3,520/oz. They expect Asian central bank buyers to continue gold purchases for another three to six years to reach GS' estimated range of potential gold reserve targets.
"Our base case forecast assumes speculative positioning normalizes from current elevated levels (85th percentile), while the top end of our price range reflects persistently stretched positioning amid heightened uncertainty," they said.
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Copper edged higher after the metal on New York's Comex exchange hit a record high amid tariff fears -- with its importance having taken on new significance as Trump now sees imports of the industrial metal as a potential national-security risk.
"Copper is the new crude oil," said Phil Flynn, senior market analyst at the Price Futures Group. It's probably "more important to the U.S. economy right now than oil," he added, calling it the "new hottest commodity on the globe."
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Iron ore prices rose amid positive sentiment. China's iron ore demand is rising as both the average daily output and the daily consumption of imported iron ore of sample steel plants rebounded significantly last week, said Baocheng Futures.
However, the ferrous metal faces pressure on the supply side as China's domestic mine production continues to pick up, while overseas supply operates smoothly, it said.
TODAY'S TOP HEADLINES
Trump Plans to Impose 25% Tariff on Imported Vehicles
President Trump said he would impose 25% tariffs on global automotive imports to the U.S., making good on pledges to penalize foreign makers of cars and trucks.
"What we're going to be doing is a 25% tariff on all cars not made in the U.S.," Trump said Wednesday in the Oval Office, appearing to dispel any chance of an exemption for countries such as Canada and Mexico, which have a free-trade agreement with the U.S.
China Industrial Profits Remain in Decline
Chinese industrial companies' profits declined at the start of the year but showed some signs of improvement, suggesting that government stimulus is having some effect as Beijing doubles down on its high-end manufacturing drive.
Industrial profits fell 0.3% from a year earlier during the first two months of the year, compared with the annual 3.3% drop seen in 2024, the National Bureau of Statistics said Thursday. China combines data for the two months to iron out distortions caused by the Lunar New Year holiday.
St. Louis Fed's Musalem Says 'Stakes Are Potentially Higher.' What He's Worried About.
St. Louis Fed President Alberto Musalem on Wednesday warned that the proposed tariff increases and retaliatory actions could keep inflation at persistently high levels, cautioning against simply looking through the effects.
In remarks delivered to a business event in Paducah, Ky., Musalem said that the Trump administration's tariff hikes will likely have both direct and indirect effects. While the direct effects are expected to be one-time price-level increases that shouldn't have a long-term impact on inflation, the "indirect, second-round effects" are more uncertain, he said.
Europe Confronts Reality That Vance's Hostility Is More Than Just a Show
European leaders had hoped that Vice President JD Vance's antagonism was a political show to build domestic support. Now, after Vance expressed disdain for Europe in a private text chat about Yemen attack details, officials are coming to terms with a vocal vice president whose antipathy for Europe appears to run deep.
"I just hate bailing Europe out again," he said regarding planned U.S. strikes against Houthi rebels, in an exchange published by the Atlantic magazine. He told fellow administration officials that the U.S. was "making a mistake" by hitting the Houthis, whose attacks on Red Sea shipping have scrambled global shipping routes.
Robinhood Customers Are Growing Up, and the Brokerage Wants to Keep Them
Robinhood, the digital brokerage that channeled the meme-stock and crypto craze, is angling to keep its youthful clientele as they graduate from YOLO investing to estate planning.
The company said Wednesday it plans to roll out many new services, from wealth-management tools and bespoke investment portfolios to bank accounts. All of them cater to Americans as they age, earn more money and navigate more complicated financial lives. Robinhood customers' median age has climbed to 35 years old from 31 over the past five years.
CoStar Raises Offer for Australia's Domain to $1.92 Billion
SYDNEY-U.S. real-estate analytics provider CoStar raised its proposed offer for Domain, telling Australia's second-largest property advertiser that US$1.92 billion is its top price unless a rival suitor emerges.
CoStar, which operates U.S. portals including Homes.com, improved its nonbinding all-cash proposal to 4.43 Australian dollars a share, equivalent to about US$2.79. That is up 5.5% on the A$4.20 it initially proposed last month.
Tesla Is Headed to Saudi Arabia, Years After Infamous Tweet
Saudi Arabia is getting Tesla. Just not like investors imagined a few years ago.
The electric vehicle maker recently said it was expanding to the Middle Eastern kingdom and would host a launch event in April.
Write to singaporeeditors@dowjones.com
Expected Major Events for Thursday
00:01/UK: Feb UK monthly automotive manufacturing figures
07:00/NOR: Feb Labour force survey SA, incl unemployment
07:00/DEN: Feb Central Government Finance & Debt
07:00/DEN: Feb Retail Sales Index
07:00/TUR: Feb Foreign Trade
07:00/TUR: Feb Employment / Unemployment
08:00/SPN: Feb Retail Sales
08:00/SVK: Feb PPI
09:00/NOR: Norges Bank monetary policy decision and publication of Monetary Policy Report
09:00/ICE: Mar CPI
09:00/AUT: Mar Austria Manufacturing PMI
09:00/EU: Feb Monetary developments in the euro area (M3)
09:00/ITA: Feb Foreign Trade non-EU
09:30/UK: Feb Capital issuance statistics
10:00/MLT: Feb PPI
All times in GMT. Powered by Onclusive and Dow Jones.
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(END) Dow Jones Newswires
March 27, 2025 01:00 ET (05:00 GMT)
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