Developed Markets

Eurointelligence

According to Wolfgang Münchau, France and Germany disagree on how to respond to Donald Trump's tariffs, the first risking and the second tempering. France is ready to single out digital services for retaliation, the German outgoing government says everything but digital services. Meanwhile, Friedrich Merz looks for opportunities to conclude trade deals with the US but also other countries around the world. Wolfgang notes that the Trump administration’s sector-level approach to tariffs is proving erratic, which could snarl up supply chains and lead to inflationary pressures. He points out that a world that divides in global tariff zones is not a world in which a single currency will dominate – prepare for the multipolar currency regime.

Quill Intelligence

March’s Global Supply Chain Volatility Index reflected the most excess capacity since the covid-19 pandemic, declining for a third straight month to -0.51; driving the slowdown was a decline in stockpiling behaviour to levels not seen since 2016 as well as ebbing demand, particularly in North America. Real C&I loan volume channelled the global narrative, with a December topping in upstream chemical rail traffic flagging a cooling in downstream US industrial activity. The precipitous falloff in Canadian consumer confidence—the lowest level in two years—tracking a rollover in Bloomberg’s commodity index, echoed the theme. While Asian supply chains bucked the trend, validated by a boost in incoming US container traffic, that is unlikely to last.

Triple i Advisors

Triple i identified the top in the S&P providing their global clients the acumen to sell 6158, while the market was still accumulating large longs at a generational top. The closing ratio continuously reiterated a zero-value status above 6158, helping to define an initial profit-taking support level at 4850, while the index was trading at 4891. The sells on the way down at 5581 & 5481 ruptured significant multi-year ratios which precisely retested 5528.75 before reversion set in. Additional resistance levels were noted at 5666 (major) and 5780 (significant). Closing beneath 5200 evokes a rechallenge of sub 5k. In currencies, USD/ZAR was one of Triple i’s performing pairs this year. Buy signals at 17.62 and 18.00 targeted 19.94, with price reaching 19.9353.

Beacon Policy Advisors

Like the president’s 10 percent across-the-board baseline tariffs, Stephen Myrow sees sectoral tariffs, expected to be imposed at the 25 percent level, as intended to be permanent rather than leverage points for negotiation. Singling out certain industries aligns with Trump’s long-standing economic vision of reshoring domestic manufacturing in key sectors of interest. Trump has already instituted steel and aluminium tariffs and late last month announced duties on automobiles (in effect as of last week) and automotive parts (set to take effect May 3rd). Pharmaceuticals and semiconductors are poised to be next… Stephen says the line may be different for various sectors. Given the likelihood of these well-telegraphed tariffs being imposed in the coming months, time will tell if and when Trump has had enough medicine (or has run short on it, as the case may end up being due to the pharma tariffs).

Talking Heads Macro

Manoj Pradhan ponders the question, going into detail on five hypotheses: plumbing; the structural end of US exceptionalism; the significant dilution of the reserve currency status; a Truss-like shock from fiscal policy (which has Manoj’s full approval as a reason); and an EM-like loss of faith in the administration. He recommends staying long 10y and 30y bonds. His reasoning is that the fiscal news would only show up later in the summer as the fiscal balance/issuance will deteriorate passively as a recession gets priced in and a massive reconciliation budget would be passed only by summer.

Minack Advisors

Gerard Minack has predicted a major peak in US equity returns relative to the rest of the world. What he hadn’t expected was the Trump Administration to behave in a way so detrimental to America’s own interests. Investors will have little edge trading volatility in the short term unless they’ve accidentally been added to a White House group chat. Gerard expects long-term growth to be harmed by uncertainty, misallocation of capital due to tariffs, lower population growth and attacks on institutions. The US is undergoing an adverse supply shock whereas the rest of the world is seeing a demand shock; whilst other countries can simply loosen policy, the Fed has no clear solution. The US premium is being questioned, especially relating to equities, as the country’s status as the safe haven hegemon. Prepare for an extended period of US asset underperformance.

Aurora Macro Strategies

The Ishiba government indicated that it would not pursue a supplemental budget during the current Diet session, in part due to uncertainty about the impact of US trade policy. Although some Liberal Democratic Party lawmakers wanted a stimulus package before upper house elections, shelving a supplemental budget allows Prime Minister Ishiba Shigeru to sidestep a contentious debate about fiscal policy; polls suggest that the public does not necessarily want a stimulus package anyway. Meanwhile, Tobias Harris points out the question of a consumption tax cut — raised as part of the stimulus debate — has divided the opposition, potentially improving Ishiba’s position. With stimulus discussion on hold, the prime minister can now focus on negotiating with the Trump administration; depending on the latter’s demands, Ishiba may still have to engage in some contentious negotiations with domestic constituencies to secure support for concessions, but he has bought himself some time.

Emerging Markets

Alberdi Partners

The government and the IMF have just signed an important four-year EFF programme. In a nutshell, the announcement includes the lifting of almost all capital controls, the elimination of the export FX blend, the flexibilisation of the FX access for imports, the introduction of an FX band whose initial ceiling is almost 30% weaker than the current official exchange rate and which includes a free floating regime inside the target band, a restrictive monetary scheme, and a reaffirmation of the fiscal commitment among others. Against these announcements, the IMF provided substantial frontloaded support, which will be supplemented by other IFIs. The programme includes NIR targets as performance criteria. Marcos Buscaglia thinks the programme is as good as it could get in an election year and is thus positive for the credit. The main downside risk stems from the political fallout of the short-term increase in the inflation rate.

Emerging Advisors Group

Jonathan Anderson’s latest report examines Cambodia’s unique banking sector. The dollarised, fast-growing and largely foreign-controlled sector has deepened financial inclusion and credit success, but it has also attracted unusual players due to low barriers and insufficient regulatory scrutiny. The end of the covid-era loan moratorium in 2023 revealed underlying vulnerabilities that had been masked for years and provisioning across the sector remains dangerously low despite visible credit stress. Regulatory decisions also raise concerns over moral hazard and the overall credibility of bank bad asset disclosures. Some investors rely too much on the perceived fail-safe that the banks’ parent companies will step in if needed, but the ownership structures of many of the banks prevent anything beyond limited systemic support.

East Asia Econ

Paul Cavey notes that China’s exports through March were solid, but not so strong as to suggest big front-loading. He says that the real standout is the import ratio dropping to a new post-1990s low. The trade surplus upsets Trump. Equally though, weak imports limit China's appeal as a market for others looking for an alternative to the US. On a trend basis, exports are firm. But that is clearer in volume and CNY terms than when calculated in USD. While US exports rose at the end of last year, they have now moderated again. Overall, China's data don't show the lift evident, for example, in Taiwan's trade statistics this year.

Pacifico Research

According to Enrico Vicentini, given the sharp movements in external markets—particularly in the US rates market, where significant increases were observed alongside a clear steepening bias—it is notable that IBR swap rates outperformed on a relative basis. In contrast, TES bonds once again experienced upward pressure on their yields, more in line with external developments, which may suggest light positioning in the swap market, typically dominated by offshore investors, judging by the relative price action. As a result, spreads versus USD OIS swaps narrowed considerably, in line with other economies in the region and consistent with the narrative of “US Exceptionalism” losing momentum. On the domestic front, inflation came in slightly below consensus, which could support the case for resuming rate cuts at the next Banco de la República meeting.

Teneo

With 97% of ballots counted following the presidential run-off, President Daniel Noboa had won 55.65% of the vote, comfortably defeating his leftist rival, Luisa Gonzalez. Noboa therefore secures his first full four-year term having served out the truncated term originally won by Guillermo Lasso. Noboa’s National Democratic Action (ADN) party will have 66 out of 151 seats in the unicameral National Assembly but has supposedly already secured the support of an unconfirmed number of the nine-strong Pachakutik (PK) indigenous bloc and will probably gain additional votes from the Social Christian Party (PSC) and individual legislators. Gonzalez’s Citizen Revolution (RC) party will have 67 seats, but may well experience divisions and disarray after this new defeat. If governability appears more solid than under recent governments, the detail and direction of Noboa’s always-vague policy plans will now come under scrutiny.

Krutham (formerly known as Intellidex)

Despite having an endowment of 30% of the world’s critical minerals, South Africa is at serious risk of missing out on the increased demand due to inadequate planning, policymaking and strategic positioning. There is no coherent critical minerals strategy in place and Peter Montalto cannot see the nation offering anything meaningful to the US when it comes to trade talks. Significant investments, political will and policy reforms are needed to achieve Ramaphosa’s aim of bolstering the country’s raw materials strategy. The next G20 meeting is nearing and the new Department of Mineral & Petroleum Resources (DMPR) needs to move with greater speed in finalising the critical minerals strategy. It must aim to crowd in support and investment from the Global North (including the US) and take advantage of local opportunities such as the SA renewable energy masterplan implementation, the existing project pipeline and the Junior Miners‘ exploration fund.

ESG

Sustainable Market Strategies

Whilst the world shakes in volatility in the face of the tariff war, the Sustainable Market Strategies team try to find ‘green diamonds’. Their strategy favours stocks with limited exposure to the US and the tariff war, defensive themes that will be less affected by a recession, and names that are focused on services in countries outside of the US. Some of the ideas include NextEra, a stable company operating in the renewable space with long-term PPAs, and First Solar, which does not fit the bill of a defensive company but is one of the few solar manufacturers that does not rely on China. The engineering sector is also of interest; whilst sector stocks recently reacted sharply to recession risks, many of these companies have segments that are relatively recession-proof. Suggested names include AtkinsRealis, Stantec and WSP.

Commodities

Topdown Charts

Callum Thomas points out that commodities have pulled back from a key resistance level, yet shorter-term have put in a tentative higher low (from oversold conditions). The bigger picture shows that the cyclical basing process is still in progress (hence, retain a bullish bias). Callum says that one needs to keep a close eye on commodity technicals, particularly in case of global growth surprises at a time where pessimism rules. Meanwhile, tariff tinkering saw commodities initially pulling back from a key resistance level, but for now as of last week's Tuesday low have rebounded from oversold conditions (50dma breadth); and put in a short-term higher low. If commodities can rally from here, it may well set the scene for a breakout from that long-standing trading range.

Navigate Commodities

Despite intraweek price volatility of US$7-8/t swings to the downside and back up again, SGX 62% Iron Ore futures were little changed at US$97.40/t CFR China compared with the previous week. According to Atilla Widnell, there's little else the US administration can do to put direct pressure on the Chinese economy. Sino-centric commodity and financial markets have begun to price-in greater expectations of interest rate & RRR cuts and fiscal stimulus injections. Any nod, hat-tip, wink, and/or indication of expansive fiscal stimulus could send industrial metals soaring; updating Atilla’s short-term target to US$100.50-102.58/t CFR China. Currently he expects that volatility in China-centric industrial metals futures markets will largely be dictated by tit-for-tat trade measures between global superpowers… If global trade measures remain in-situ, Atilla believes this increases the prospect of Chinese authorities revisiting expansive fiscal & monetary stimulus to defend the domestic economy; revising his medium-term outlook to US$95.70-107.84/t CFR China for Q2 2025.

Global Mining Research

The Global Mining Research team research the correlation of stocks to the gold price and the beta of those stocks. The stocks with consistently high beta to the gold price over the past five years are Alamos Gold, Genesis Minerals, IAMGOLD, Kinross Gold, Lundin Gold and Torex Gold Resources. Stocks with a weak beta to gold price over the past five years are B2Gold, Centerra Gold, Endeavour Mining, Barrick Gold, Newmont and SSR Mining (except 2025), each with mine or management issues, heightened risk or M&A troubles. Market preference for gold stocks appears to be more driven by investor perception rather than quantifiable valuation or sensitivity measures, and investors are preferring stocks with “issues” and aren’t seeking deeply discounted cheap stocks. Preferred gold stocks are BUY-rated Agnico (delivery and lower-risk portfolio), Kinross (risk reduction and execution), Equinox (transitions from project development to cash generation), IAMGOLD (Côté ramp up and derisking) and Lundin Gold (FDN continues to outperform).

ERA Research

While NBSK pulp import prices have barely budged in China since early March, the futures have been telling a different story. Prices for the dominant Shanghai pulp contract (now July) have plummeted from a $732 equivalent at the end of the Lunar New Year holiday in early February to $638 on Friday 11th April. Prices have not quite reached the lows of 2023, but they are heading there quickly. The ERA team expect import prices to fall in coming weeks. As China is the largest global market for pulp, representing about one-third of World-20 volumes (which are ~80% of global trade), prices in China have typically set the direction for other markets, but it’s unclear if this will be true going forward, as the 145% US tariffs and the 125% Chinese counter-tariffs take effect.