Quiet So Far in Markets as U.S. Reciprocal Tariff Details Are Awaited

April 2, 2025

U.S. President Trump picked a light day from a data release standpoint to kick off his reciprocal tariff program that is meant to bring back manufacturing to the United States eventually. The operative message is to not look for immediate results. Some pain will be unavoidable first, and the expectation is a slowdown in economic growth with higher inflation in the United States and its targeted economies. Recessions are possible, so investors continue to prioritize return of investment over return on investment.

Following significant dollar depreciation last month, the greenback fell overnight by 0.7% against the kiwi, 0.4% versus the Australian dollar, 0.2% relative to the Japanese yen, and 0.1% against the euro and sterling.
Prices for Bitcoin and oil slid 0.6% and 0.2% overnight, while gold rose 0.4%.
Major U.S. stock future indices were down 0.5-0.8% an hour and a half before the opening of trading floors today.
The Japanese Nikkei closed 0.3% higher this Wednesday, but equities fell by 0.6% in South Korea and 0.4% in Singapore.
Slides so far of more than 1.0% in Germany and Italy lead today’s losses among major European equity markets.
Ten-year sovereign debt yields continued their recent retreat, dropping three basis points in Japan and the United States, two basis points in France and Germany, and a basis point in Italy, Great Britain and Spain.

Democrats won the special Wisconsin superior court seat by a margin of ten percentage points and lost the two Florida congressional seats, previously held by Gaetz and Waltz, by much smaller margins that were only half of those in last November’s presidential race.

Australian Prime Minister Albanese said Australia will not impose retaliatory tariff hikes in response to increases that the U.S. will likely be announcing against his country later today. Bank of Japan Governor Ueda opined that tariff changes could influence the timing of future interest rate changes in Japan.

Malaysia’s manufacturing purchasing managers index stayed below 50 in March but fell 0.9 points to a 2-month low of 48.8, marking the tenth consecutive month that sector has been in contractionary territory.

The Filipino manufacturing PMI slipped below the 50 neutral level for the first time since August 2023, printing at a 43-month low last month of 49.4.

Following an 11-month high of 53.6 in February, Indonesia’s manufacturing PMI settled back to a 2-month low of 52.4.

India‘s manufacturing purchasing managers index in March has been revised upward by half a point to an 8-month high of 58.1, indicating a very robust sector and strong optimism that such will stay so over the coming year.

Turkey’s factory PMI was hurt by recent political instability and a sharp slide in the lira. Such fell a full index point to an 5-month low of 47.3 in March.

In the United States, ADP’s estimate of private-sector employment growth during March was greater than forecast at 155k and above the 84k advance seen in February, which got revised slightly higher. U.S. mortgage applications fell in each of the final three weeks of March including -1.6% last week. With the 30-year fixed mortgage rate holding quite steady at 6.7%, lessening confidence in personal financial circumstances would seemingly be the main reason for hesitation. On Tuesday, weak U.S. manufacturing purchasing manager surveys got reported, and investors had learned of fewer job quits and openings last month and of a 6-month low in the RCM/TIPP optimism index. Consumer confidence reports last week from both the Conference Board and U. Michigan/Reuters revealed that U.S. consumer confidence handled the rapid and confusing unveiling of the Trump agenda not well.

South Korean consumer confidence edged 0.1 percentage point higher to a 2-month high of 2.1% in March. After peaking in July 2023 at 6.3%, such receded as far as 1.3% posted last October.

Filipino producer price inflation printed at a still low 0.8% in February. That 21-month high is up from-1.4% last September.

Romanian producer price inflation leaped from -0.3% in January to a 21-month high of 4.0% in February.

Irish unemployment edged up to a 2-month high of 4.0% in March, while Austrian unemployment of 7.4% represented a 3-month low.

Tags: ADP estimate of U.S. private jobs last month, Liberation Day in America

This entry was posted
on Wednesday, April 2nd, 2025 at 6:17 am and is filed under New Overnight Developments Abroad – Daily Update.
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