Morning wrap (24.04.2025)

Wall Street closed in the green yesterday on the back of signs of de-escalation in the trade war (Nasdaq: +2.5%, S&P500: +1.7%, DJIA: +1.1%, Russell 2000: +1.5%).

Gains slowed toward the end of the session as enthusiasm was dampened by comments from the Republican administration. Treasury Secretary S. Bessent stated that “preparing a full trade agreement with China may take 2-3 years.”

According to Donald Trump, the U.S. “doesn't need more cars from Canada,” and the existing 25% tariffs may be increased. At the same time, the President announced on social media that he is “working on a deal with Canada.”

IBM's (IBM.US) Q1 sales increased 1% YoY to $14.5 bn, exceeding estiamtes. The company maintained its full-year forecasts (5% revenue growth), but the stock fell almost 7% in after-hours trading due to tariffs and federal cost cuts concerns.

Mixed communication from the White House on tariffs is weighing on sentiment in the Asia-Pacific region. The biggest loser is the Chinese HSCEI (-1.3%), followed by the Shanghai SE Composite (-0.1%) and South Korea’s Kospi (-0.15%). On the other hand, Japan’s Nikkei 225 (+0.47%) and Australia’s S&P/ASX 200 (+0.75%) are in the green.

Gains in Tokyo are being supported by Bessent's comment yesterday that the yen's exchange rate is not part of the trade negotiations with Japan. In previous years, Trump criticized Japan’s “competitive advantage” due to a weak yen during the negative interest rate period.

Automakers (Toyota: +3.2%) and Nintendo (+5.15%) are seeing the biggest gains, after Nintendo received a record 2.2 million lottery entries in Japan for the opportunity to purchase the upcoming Switch 2 console.

Japan’s PPI fell in March to 3.1% (forecast: 3%, previous: 3.2% revised from 3%).

Consumer sentiment in New Zealand rose 5.5% year-on-year in April (previously: -3.5% YoY).

On the forex market, the biggest gainers are the Japanese yen (USDJPY: -0.48%), Swiss franc (USDCHF: -0.3%), and the euro (EURUSD: +0.25% to 1.1343). The Canadian dollar is also gaining despite hints of higher car tariffs (USDCAD: -0.1%). The Australian dollar is the only G10 currency losing against the dollar (AUDUSD: -0.1%).

Gold is quickly recovering from two days of losses (+1.1% to $3,325 per ounce), while silver is down 0.4% to $33.44 per ounce.

Brent and WTI oil are stagnant after yesterday’s sell-off, gaining a symbolic 0.15%. NATGAS is down nearly 1%.

Major cryptocurrencies are undergoing a correction: Bitcoin is down 1.05% to $99,696, and Ethereum is down 1.4% to $1,770. Token futures for Trump (-16%), Chainlink (-3%), Dogecoin (-2.5%), Solana (-1.6%), and Ripple (-1.5%) are also losing ground.

The key data to watch today include Germany's Ifo index, U.S. durable goods orders, and U.S. jobless claims.