MARKET WRAPS

European stocks rose on Tuesday ahead of an expected annoucement from Trump about moves to reduce auto industry tariffs.

The White House is also expected to unveil details about what negotiations with Asian countries have produced , as it tries to de-escalate the trade war.

Any "deals" it announces aren't likely to remove the worry over tariffs, analysts said.

Economic Insight

Royal London Asset Management still expects two interest-rate cuts by the Federal Reserve in 2025 , although not before the second half of the year.

At that point the economy is expected to show firmer signs of slowing, it said.

U.S. Market

Stock futures rose.

Quarterly results from companies including Coca-Cola, General Motors and Spotify are expected and will be eyed with a view to any tariff impact.

Close attention will be paid to anything executives say about likely conditions ahead.

Forex:

The dollar rose but struggled to sustain a meaningful recovery as investors remained cautious amid uncertainty over U.S. tariffs.

Optimism that the U.S. could reach trade deals with other countries is helping the dollar slightly.

However, there remained little to like about the dollar, with the U.S. exceptionalism narrative stone dead, Pepperstone said.

Bonds:

Euro-denominated investment-grade services bonds have performed better than other investment-grade peers since the start of 2025 because U.S. trade tariffs only impact goods and not services, CreditSights said.

"In the absence of first-order impacts from tariffs on most services companies, the sector stood among the most resilient during the period of peak spread volatility."

Treasury market dislocations appeared to have largely healed from the aftermath of the turmoil following Trump's tariff announcements on April 2, Capital Economics said.

Long-term Treasury yields have unwound much of their sharp (and surprising) rise since the start of April.

The gap between short- and long-term bond yields remains considerably wider than previously, it said.

Valuations across the bond market returned to more normal ranges, with many bond categories offering substantial extra yields over Treasurys, U.S. Bank Asset Management said.

"Riskier corporate and municipal bonds can experience price swings but can generate meaningful income returns over the long run."

Bond yields reflected the likelihood of the Federal Reserve cutting interest rates in June or July, U.S. Bank Asset Management said.

"Ultimately, the timing of Fed cuts relies on trade policy as officials gauge tariff impacts on the Fed's mandates for price stability and full employment."

Money markets are divided about the prospect of a rate cut in June, but expect one in July, according to LSEG.

Energy:

Oil prices extended losses from the previous trading session, weighed down by lingering concerns over global demand.

Meanwhile, weak economic data added to the bearish outlook, ANZ said.

"This came as the prospect of a relatively quick resolution to the trade war between the U.S. and China was snuffed out."

Metals:

Gold futures fell as immediate safe-haven demand eases.

Extended uncertainty in U.S.-China trade talks and economic instability should continue to support gold's safe-haven characteristics longer-term, ING said.

Prices are still up more than 25% year-to-date on market volatility and ever-shifting U.S. policies, further supported by increased gold ETF inflows and central bank buying.

EMEA HEADLINES

Rheinmetall Beats Forecasts on Strong Defense Business Performance

Rheinmetall reported a rise in first-quarter preliminary earnings that beat market forecasts due to higher sales for its military business, and backed its full-year guidance.

The German arms maker said late Monday that preliminary group sales for the first quarter were 2.305 billion euros ($2.63 billion), a rise of 46%. Within this, military business sales rose 73%.

AstraZeneca Sales, Earnings Rise; Warns of Mounting Legal Challenges in China

AstraZeneca posted increased core earnings per share and sales for the first quarter but warned of mounting legal challenges in China.

The British pharmaceutical giant said Tuesday that its core earnings per share-the company's preferred metric, which strips out exceptional and other one-off items- increased to $2.49 from $2.06 the prior-year period.

Porsche Slashes Guidance as Tariff Hit Adds to Mounting Challenges

Porsche AG cut its sales and profitability guidance for the year, warning of hits from U.S. import tariffs and a realignment of its battery activities, as challenges mount for the German premium sports-car maker.

The company-majority-owned by Volkswagen-is among the most vulnerable to President Trump's tariffs given that it doesn't have factories in the U.S. The import duties in the U.S. add to challenges the company was already facing in China due to weak demand and stiff local competition and a global slowdown in uptake of electric vehicles.

HSBC Reports Lower Quarterly Profit, Announces $3 Billion Share Buyback

HSBC Holdings announced a share buyback of up to $3 billion as it reported a drop in first-quarter net profit.

The London-based bank said Tuesday that net profit fell 32% from a year earlier to $6.93 billion for the three months ended March. That beat the estimate of $5.81 billion in a poll of analysts by data provider Visible Alpha.

GLOBAL NEWS

German Consumers Shrug Off Tariff Concerns as Confidence Unexpectedly Picks Up

German consumer confidence surprisingly ticked up despite warnings of the economic hit from U.S. trade policy, as consumers pinned their hopes on the stability of a new incoming government.

The consumer-climate index published by research groups GfK and the Nuremberg Institute for Market Decisions ticked up to minus 20.6 in May's forecast, 3.7 points higher than in April. Economists polled by The Wall Street Journal expected a fall to minus 26.0.

Tariffs to Weaken Growth and Inflation, Says ECB's Cipollone

The global economy is set for a period of slower growth as trade and financial linkages fray, and closer cooperation between those countries that favor openness is needed to avoid worse outcomes, a senior official at the European Central Bank said Tuesday.

In a speech, executive board member Piero Cipollone said the imposition of tariffs by the U.S. may weaken the dollar's role in international trade and financial flows, leading to greater competition among currencies for "reserve status."

Trump to Soften Blow of Automotive Tariffs

WASHINGTON-President Trump is expected to soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs he has imposed and easing some levies on foreign parts used to manufacture cars in the U.S., according to people familiar with the matter.

The decision will mean that automakers paying Trump's automotive tariffs won't also be charged for other duties, such as those on steel and aluminum, according to people familiar with the policy. The move would be retroactive, the people said, meaning that automakers could be reimbursed for such tariffs already paid. The 25% tariff on finished foreign-made cars went into effect early this month.

Mark Carney Wins Canada Election, Capping Dramatic Turnaround

Canada's Liberal Party won a fourth term in office but appeared short of a majority in Parliament, which could force Prime Minister Mark Carney to seek help from rival politicians to push through an economic agenda designed to contain fallout from President Trump's trade war.

Preliminary estimates early Tuesday from Elections Canada, the government body overseeing elections, indicate the Liberals had 43% of the popular vote, compared with 42% for the Conservatives. The Liberals won or were in the lead in 168 of the 343 seats in Parliament. Pollsters had predicted a Liberal majority, but the Conservative Party outperformed expectations in Ontario, especially in the suburbs around Toronto. Votes were still being counted and several close races had yet to be called.

China Offers Olive Branch to U.S. Firms After Boeing Delivery Halt

Beijing is willing to support normal business cooperation with American firms, China's commerce ministry said, coming days after Chinese airlines were ordered to stop taking delivery of Boeing aircraft.

The Chinese commerce ministry on Tuesday said that U.S. tariffs had harmed China's airlines and Boeing. It expressed hope that the U.S. government would listen to businesses and create a stable, predictable environment for trade and investment.

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(END) Dow Jones Newswires

April 29, 2025 04:54 ET (08:54 GMT)

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