Sentiment boosted by tariff exemptions, with NQ +1.7%, but USD extends losses - Newsquawk Europe Market Open

US President Trump’s administration exempted items from reciprocal tariffs including smartphones, storage devices and some other electronics.
However, Trump posted on Sunday that there was no tariff exception announced on Friday and that these products are subject to the existing 20% fentanyl tariffs and are just moving to a different tariff bucket.
European bourses open higher as markets digest exemptions on smartphones/electronics; US futures also gain.
DXY on the backfoot once again and G10s broadly supported with newsflow on the quiet end.
Bonds diverge once again but are contained with specifics light thus far; USTs a little firmer whilst Bunds dip.
Crude contained, gold wanes, base metals supported given the positive risk tone.
Looking ahead, US NY Fed SCE, Speakers including RBNZ’s Conway, Fed’s Waller & Harker, Earnings from Goldman Sachs & LVMH.

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TRADE/TARIFFS

US President Trump’s administration exempted items from reciprocal tariffs including smartphones, storage devices and some other electronics. However, Trump posted on Sunday that there was no tariff exception announced on Friday and that these products are subject to the existing 20% fentanyl tariffs and are just moving to a different tariff bucket, while he stated that “NOBODY is getting “off the hook” for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!”.
US President Trump said he is to announce the tariff rate for semiconductors over the next week and that semiconductor tariffs will be in place in the not-distant future, while he added there will be some flexibility on some companies on semiconductor tariffs but it is not clear. Furthermore, Trump responded that they will be announced soon but there has to be some flexibility when asked about tariffs on Apple (AAPL) iPhones.
US President Trump said the bond market is going good and had a little moment but he solved that problem very quickly. Trump added that the 10% tariff is a floor or pretty close and that it doesn’t matter if the dollar went down as he thinks it will go up and will be stronger than ever.
US President Trump’s administration is reportedly prioritising trading partners that are strategic to China with the US in talks with Japan, South Korea, India and Vietnam, according to Politico.
White House spokesperson said US President Trump made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones and laptops, while President Trump is to issue a Section 232 study on semiconductors soon and said he will have more information on semiconductors on Monday. Furthermore, Trump said that autos, steel, pharmaceuticals, chips and other specific materials will be included in specific tariffs to ensure tariffs are applied fairly and effectively.
US Commerce Secretary Lutnick said President Trump plans a separate levy on exempted electronics amid a trade war with electronics products to be part of upcoming sectoral tariffs and that semiconductor and electronic tariffs will come in a month or so, while he added that pharmaceutical tariffs will be coming in the next month or two and that the US had “soft entrees” through intermediaries with China on tariffs.
USTR Greer said there are no plans yet for President Trump to speak with Chinese President Xi and stated electronic exemptions reflect a move from reciprocal tariffs to national security tariffs. Greer said they have to be much more deliberate about the semiconductor supply chain and he believes the US will have meaningful tariff deals with several countries in the next few weeks.

OTHER

China said the US tariff exclusion is a small step for the US to correct its wrong practice and called for the US to completely cancel the levies.
UK government announced that prices were slashed on 89 foreign products ranging from pasta, fruit juices and spices to plastic and gardening supplies over the next two years, while it stated the UK global tariff will be temporarily suspended on 89 products saving UK businesses at least GBP 17mln a year.
UK retail bosses raised fears of Chinese product ‘dumping’ into the UK and European markets through platforms such as Temu, Shein and Amazon (AMZN) amid Trump tariffs, according to FT.
Spain’s Economy Minister said the pause in US tariffs is an opportunity for dialogue.

EUROPEAN TRADE

EQUITIES

European bourses (STOXX 600 +2%) are entirely in the green, following a mostly positive APAC session as traders react to the latest trade-related updates, which included an "exemption" of some electronic-related goods.
European sectors hold a strong positive bias, in-fitting with the risk tone; some of the sectoral movers today are attributed to the weekend’s tariff updates. Tech is one of the best performing sectors today, lifted by a number of semi-conductor names after US President Trump’s administration exempted items from reciprocal tariffs including smartphones, storage devices and some other electronics. The likes of Infineon (+1%) and ASML (+3%) both gain.
US equity futures (ES +1.5%, NQ +1.7%, RTY +1%) are entirely in the green, benefiting from the risk tone. In the pre-market; Apple (+5%) amongst a number of other large-cap tech stocks are moving higher after Trump’s latest electronics-related “exemptions”.
Citigroup downgrades US equities to Neutral from Overweight; upgrades Japanese equities to Overweight from Underweight; downgrades EM equities to Underweight from Neutral.
Barclays European Equity Strategy: Quality stocks upgraded to positive; Value stocks downgraded to neutral from positive
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FX

Another downbeat session for the Dollar and currently trading in a 99.20-99.91 range. Price action this morning has been rather horizontal amid eerily quiet newsflow. US trade policy continues to appear disorderly, with temporary exemptions for some Chinese electronic exports (about 20% of China's exports to the US) followed by expectations of new tariffs on semiconductors and potentially pharma over the next month or two.
EUR is modestly firmer this morning as a function of the softer Dollar coupled with some reprieve from US President Trump classifying semiconductor tariffs under a separate basket instead of reciprocal tariffs. EUR/USD resides in a current 1.1280-1.1424 range and well within the 1.1188-1.1473 parameter set on Friday.
USD/JPY retreated to a sub-143.00 level owing to the weaker dollar and in a continuation of last week's downward bias, but is off worst levels given the broad positive risk environment across Asia-Pac and then Europe. USD/JPY trades within a 142.23-144.30 range, contained in Friday's 142.05-144.60 parameters.
GBP is again, posting gains as a function of the Dollar, with Cable rising to an overnight peak of 1.3174 as it eyes the peak from the 3rd of April at 1.3207.
Gains across the antipodeans amid the broader constructive tone across the markets after US President Trump watered down his semiconductor tariffs, clarifying that it is separate from the basket of reciprocal tariffs. Aussie continues to be slightly more restricted than the Kiwi, with sub-par Chinese import data overnight likely hampering gains.
PBoC set USD/CNY mid-point at 7.2110 vs exp. 7.3251 (Prev. 7.2087).
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FIXED INCOME

USTs are firmer but much more modest than has been the case in recent days. As it stands, USTs are rangebound just below the 110-00 mark and well within Friday’s 109-08 to 110-21 band. Focus this morning is, as usual, on tariffs. Risk sentiment has been supported by the announcement of some tariff exemptions for smartphones etc, however, Trump clarified this weekend that there are no exemptions with the measures just moved into different categories i.e. fentanyl.
Bunds are in the red but, as with USTs, rangebound throughout the European morning and comfortably within Friday’s 129.92-131.42 band. Specifics for the bloc light this morning, attention in Europe is of course on trade/tariffs (EU negotiator Sefcovic to meet US officials) but earnings season is getting underway and macro commentary from LVMH after the cash equity close could be pivotal for the region.
A firmer start as Gilts gapped higher by 38 ticks. A move that acknowledged the action seen late-doors on Friday and is also a function of Gilts finding some reprieve from recent marked selling pressure. However, like its peers, the benchmark remains well within Friday’s 90.47-91.75 band. After gapping higher at the open Gilts extended a touch to a 91.24 high, but have seen reverted back to and remain at opening levels just above 91.00.
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COMMODITIES

Crude futures trade towards the top of their narrow intraday parameters, with Brent and WTI each up around 0.40/bbl as tailwinds from the mostly positive risk appetite are being offset following "very positive and constructive" talks between the US and Iran over the weekend.
Mostly softer trade across precious metals with spot gold and silver unwinding some of their risk premium after US President Trump watered down his semiconductor tariffs, clarifying that it is separate to the basket of reciprocal tariffs, whilst US-Iran talks also went ahead over the weekend, with a second round planned. Spot gold resides in a USD 3,213.35-3,245.84/oz parameter vs Friday's 3,177.26-3,245.49/oz. Bloomberg reported that the PBoC has allocated fresh gold import quotas for banks; limited reaction following this news.
Mostly firmer across base metals following the tariff clarification on Friday and over the weekend, whilst overnight, reports pointed to more imminent Chinese stimulus.
PBoC has allocated fresh gold import quotas for banks, according to Bloomberg; to meet increased demand from institutional and retail investors amid the escalating trade war.
US Energy Secretary Wright said the US and Saudi Arabia will sign an agreement on energy investments and civilian nuclear technology, while he stated there will be lower average oil prices over the next four years under the Trump administration and he expects long-term cooperation between the US and Saudi to develop the civilian nuclear industry in the kingdom.
Iraq signed an undersea oil exports pipeline deal with Italy’s Micoperi and Turkey’s Esta which will have a 2.4mln bpd capacity.
US President Trump plans to stockpile deep sea metals to counter China, according to FT.
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NOTABLE DATA RECAP

UK House Price Rightmove MM (Apr) 1.4% (Prev. 1.1%); YY 1.3% (Prev. 1.0%)

NOTABLE EUROPEAN HEADLINES

UK reportedly races to secure coal required to keep British steel furnaces, according to FT.
S&P raised Italy’s sovereign rating by one notch to BBB+ from BBB; Outlook Stable.

NOTABLE US HEADLINES

Some of the world’s largest pension funds from Canada and Denmark are reportedly halting or reassessing their private market investments in the US due to President Trump's erratic policy blitz, according to FT.

GEOPOLITICS

Israel bombed a Gaza hospital as its military expanded its offensive, according to FT.
Israeli military said sirens sounded in several areas in Israel and interception attempts were made after two missiles were launched from Yemen.
US President Trump said Iran talks are going well and that Ukraine-Russia talks might be going okay but added there is a time when you have to put up or shut up. Furthermore, Trump separately commented that they will be making a decision on Iran shortly, while the White House said Iran discussions were very positive and constructive, as well as noted that the sides agreed to meet again next Saturday and US special envoy Witkoff underscored to Iran’s Foreign Minister that he had instructions from President Trump to resolve differences through dialogue and diplomacy if possible.
Iran’s Foreign Minister Araqchi said both sides want an agreement in the short-term and not ‘talks for talks’, while he added the second round of talks will probably be next Saturday.

RUSSIA-UKRAINE

Ukraine’s air force said on Saturday morning that Russia launched 88 drones in an overnight attack and announced on Sunday that Russia launched 55 drones targeting Ukraine, while the mayor of Ukraine's Sumy said over 20 were killed after a Russian missile strike on the city.
Russian Defence Ministry said Russian forces captured Yelyzavetivka in eastern Ukraine and Russian air defence systems shot down a Ukraine F-16 jet, according to Interfax. It was also reported that Russia accused Ukraine of attacking its energy infrastructure on several occasions over the weekend.
Russian Foreign Minister Lavrov said they have been keeping their word on a 30-day energy strikes moratorium and there were no direct or indirect contacts between Russia and Ukraine at the Antalya Forum. It was also reported that Turkish and Russian Foreign Ministers discussed efforts to achieve a ceasefire in the Russia-Ukraine war.
Russia’s Kremlin said relations with the US are moving ahead very well and mutual visits by Russian and US envoys are very good reliable channels for communicating positions to each other.
Military representatives from Turkey and foreign nations are to meet in Turkey on April 15th-16th to discuss Black Sea security after a possible ceasefire between Ukraine and Russia, according to the Turkish Defence Ministry.
German Chancellor-in-waiting Merz said Germany is willing to send Taurus missiles to Ukraine, according to FT.

CRYPTO

Bitcoin is essentially flat and trading just shy of USD 85k; Ethereum currently above USD 1.6k.
Binance seeks to curb US oversight while in deal talks with Trump’s crypto company and has been in discussions to list a new dollar-pegged cryptocurrency from World Liberty Financial, according to WSJ.

APAC TRADE

APAC stocks began the week on the front foot after reports of a tariff reprieve for smartphones and other electronic goods but with gains capped by President Trump's walk-back regarding this, while participants also digested somewhat mixed Chinese trade data.
ASX 200 advanced at the open with real estate, health care and tech leading the broad gains seen in nearly all sectors.
Nikkei 225 climbed above the 34,000 level with notable strength in pharmaceuticals and electronic goods/component manufacturers.
Hang Seng and Shanghai Comp conformed to the positive risk environment amid some tariff-related reprieve with Chinese consumer electronic goods currently 20% fentanyl tariffs instead of the 145% reciprocal tariffs, although President Trump said he would be announcing the tariff rate for semiconductors over the next week and semiconductor tariffs will be in place in the not distant future. Furthermore, participants digest stronger lending data from China and mostly better-than-expected trade figures in which Trade Balance and Exports topped forecasts but Imports showed a wider-than-expected contraction.

NOTABLE ASIA-PAC HEADLINES

China’s auto sales surged 11.2% year-on-year in the first quarter of 2025, reaching 7.47 million vehicles; growth was driven by strong domestic demand, supported by expanded trade-in subsidies incentivising consumers to upgrade vehicles, via Caixin.
China Customs said at present, China's exports are facing a complex and severe external situation, but added the sky will not fall and China is actively building a diversified market and deepening cooperation with all parties in the supply chain. Furthermore, it stated that importantly, China's domestic demand is broad and the import decline in the first quarter was mainly due to the decline in international product prices and fewer working days.
China is to roll out more monetary easing steps with China to ramp up counter-cyclical policy adjustments and implement various monetary policy measures in the future, according to Shanghai Securities News.
China may cut rates and RRR if the trade war hurts the economy, according to PBoC-backed Financial News citing former PBoC adviser Yu Yongding.
Japanese senior LDP official Onodera said a weak yen has caused higher domestic living costs and Japan must strengthen the yen by making its companies stronger, while Onodera said that Japan, as a US ally, shouldn’t think about using its US treasury holdings as a negotiating tool in bilateral trade talks.
Taiwan’s Financial Regulator announced short-selling stock curbs will be extended for another week.
Monetary Authority of Singapore announced it will continue with the policy of a modest and gradual appreciation but slightly reduced the slope of the SGD NEER policy band as expected, while it maintained the width and level where the band is centred. MAS said imported and domestic cost pressures will remain low and its core inflation is forecast to stay well below 2%, while risks to inflation are tilted towards the downside.

DATA RECAP

Chinese Trade Balance (USD)(Mar) 102.64B vs. Exp. 77.0B (Prev. 170.52B)
Chinese Exports YY (Mar) 12.4% vs. Exp. 4.4% (Prev. 2.3%)
Chinese Imports YY (Mar) -4.3% vs. Exp. -2.0% (Prev. -8.4%)
Chinese Yuan-Denominated Trade Balance (Mar) 736.72B (Prev. 228.19B)
Chinese Yuan-Denominated Exports (Mar) 13.5% (Prev. -1.9%)
Chinese Yuan-Denominated Imports (Mar) -3.5% (Prev. 2.5%)
Chinese New Yuan Loans (CNY)(Mar) 3.64T vs Exp. 3.00T (Prev. 1.01T)
Chinese Aggregate Financing (CNY)(Mar) 5.89T vs Exp. 4.80T (Prev. 2.23T)
Chinese Money Supply M2 YY (Mar) 7.0% vs Exp. 7.1% (Prev. 7.0%)
Singapore GDP QQ (Q1 A) -0.8% vs Exp. -0.4% (Prev. 0.5%)
Singapore GDP YY (Q1 A) 3.8% vs Exp. 4.3% (Prev. 5.0%)