Bitcoin Recovers Slightly Ahead of U.S. TariffsMarket Talk

0800 GMT - Bitcoin recovers slightly following losses in the previous session as traders remain cautious ahead of U.S. reciprocal tariffs on Wednesday. President Trump on Monday said he would be "very kind" to trading partners when he unveils tariffs with an announcement expected at 1500 ET Wednesday. His comments come a day after he said the tariffs would target all countries. Tariff details remain unclear, prompting traders to tread cautiously as global markets grapple with heightened volatility, Tickmill Group's Patrick Munnelly says in a note. "Concerns about the potential impact on U.S. economic growth and inflation have tempered large investment moves ahead of the announcement." Bitcoin rises 1.3% to $83,552 after hitting a near two-week low of $81,311 Monday, according to LSEG. ([email protected])0743 GMT - U.K. short-dated gilts look attractive given the global shift away from risky assets in favor of safer assets as uncertainty around tariffs intensifies ahead of Wednesday's announcement due from the U.S., RBC Capital Markets analysts say in a note. "We have titled our portfolio towards the bond bullish side (particularly regarding the front-end of the curve) given...what we see as an accumulation of potential near-term negative external risk events." The October 2031 gilt is likely to outperform in the near term given the attractiveness of short-maturity gilts and because it is close to the end of its tapping cycle, they say. ([email protected])0719 GMT - The euro falls as traders look ahead to eurozone inflation data and U.S. reciprocal tariffs while digesting news of French far-right leader Marine Le Pen being found guilty of embezzling European parliament funds. The inflation data will be released at 0900 GMT while the reciprocal tariffs are set to take effect Wednesday. Le Pen has been banned from running in France's 2027 presidential election after her conviction. This "fuels fears that France is becoming ungovernable, which does not bode well for the euro-area," Commerzbank currency analyst Michael Pfister says in a note. The euro falls 0.1% to $1.0807. ([email protected])0711 GMT - Eurozone government bond yields trade lower as investors favor safe havens ahead of U.S. President Trump's tariff announcements on Wednesday. Investors also anticipate a fall in eurozone headline and core inflation when data are released at 0900 GMT. The 10-year German Bund yield last trades around 2.5 basis points lower at 2.709%, according to Tradeweb data. The French 10-year OAT yield is down 2.5 basis points at 3.426%, having underperformed against German Bunds on Monday after French politican Marine Le Pen was banned from politics for five years for misusing European Union funds. ([email protected])0657 GMT - The Nikkei Stock Average ended flat at 35624.48 as gains in pharmaceutical and utility stocks offset losses in chip and bank shares. Daiichi Sankyo gained 6.0% and Chubu Electric Power climbed 3.7%, while Kioxia Holdings fell 5.6% and Rakuten Bank dropped 4.0%. The broader market index Topix rose 0.1% to 2661.73. U.S. tariff news are in focus. The 10-year Japanese government bond yield rose 1.5 basis points to 1.500%. USD/JPY was at 149.88, compared with 149.95 as of Monday 5 p.m Eastern time. ([email protected]; @kosakunarioka)0656 GMT - French government bonds, or OATs, further underperformed Italian peers BTPs after a Paris court banned far-right leader Marine Le Pen from running in the next presidential election, Citi Research's Aman Bansal say and Jamie Searle in a note. However, they say, any further underperformance might pause while the tariff narrative plays out. A French court convicted Le Pen of misusing EU funds, banning her from seeking public office for the next five years. "Whilst this verdict increases the risk of RN [Le Pen's National Rally] garnering sympathy votes in opinion polls in the near-term, its market ramifications remain limited until a legislative election can be called," Citi's rates strategists say. The 10-year French OAT-German Bund yield spread widened to 72.5 basis points on Monday; it last trades at 71 basis points, according to Tradeweb. ([email protected])0651 GMT - China's exports have so far remained resilient in the face of U.S. tariffs, says Julian Evans-Pritchard, head of China economics at Capital Economics, in a note. March PMI data suggest infrastructure spending is ramping up again, he says. The surveys are consistent with slower 1Q GDP growth amid weakness in the services sector, he adds. The official and Caixin manufacturing PMIs both improved in March, he notes. The uptick in demand partly reflects U.S. importers front-loading purchases of Chinese goods ahead of further tariffs, with the export orders component rising to the highest level since last April, he says. However, these factors aren't enough to prevent further disinflation, with the output price index pointing to a deepening of factory-gate deflation, he says. ([email protected]; @ivy_jiahuihuang)0635 GMT - The dollar trades steady as investors tread with caution ahead of Wednesday's U.S. reciprocal tariffs. The dollar is the "most exposed of all currencies to the zero-sum game of trade wars and the most vulnerable to the continued incoherence emanating from the White House," Pepperstone strategist Michael Brown says in a note. The focus Tuesday will be on the outcome of investigations by federal agencies into U.S. trading relationships to be delivered to President Trump, he says. Markets will also monitor the U.S. ISM manufacturing report and U.S. job openings and labor turnover survey, both at 1500 GMT. The DXY dollar index trades flat at 104.255. ([email protected])0632 GMT - The near-term growth risks for Thailand's economy could be exacerbated by the recent earthquake, OCBC economists write in a research note. The extent of the damage from the earthquake has not been officially estimated yet, but they say anecdotal evidence suggests noticeable damage in Bangkok, with the Bangkok Metropolitan Administration noting over 700 cases of property damage. The earthquake's impact on tourist arrivals and economic data should also be felt from April, they say. Thailand's economy underperformed its regional peers in 2024 and has shown limited signs of improvement in 1Q, they add. "Domestic headwinds will coincide with external headwinds, given the impending announcements on potential tariffs from the U.S.," they say. ([email protected])0619 GMT - The long end of the U.S. Treasury yield curve is no longer the perfect hedge given several risks, including high inflation, stagflation, and low growth, says Adam Marden at T. Rowe Price. Long Treasurys were the perfect hedge post the global financial crisis because the Fed was mostly on hold and inflation was never a realized worry, says the portfolio manager. However, Treasury supply dynamics are negative today with the U.S. government's large budget deficit, which may get worse if a growth shock triggers even more spending, he says in a note. "I don't think long Treasuries present many defensive characteristics today unless we see a major shift down in growth and inflation levels to what we experienced between the GFC and the start of the pandemic," he says. ([email protected])0606 GMT - A reorientation of global trade flows is likely to place sustained pressure on European companies, according to the latest Weil European Distress Index, which tracks the deterioration in financial-market conditions and company performance. All sectors are expected to experience pressure from trade shifts as the year unfolds, law firm Weil says in the report. "As global and regional challenges continue to evolve in the coming months, businesses will need to stay agile to navigate uncertainty," according to the Weil European Distress Index. The index--which aims to be an early-warning indicator of a default wave--showed a rise in corporate distress across Europe as of February, reaching its highest level in six months. ([email protected])0602 GMT - Money markets are becoming less convinced about an interest-rate cut by the European Central Bank at its April 17 meeting, says Danske Bank Research's Stefan Mellin in a note. The significant fiscal easing in Europe together with the possible trade war with the U.S. is making the European Central Bank more uncertain on the monetary policy outlook, the chief analyst says. "The market has once again begun a repricing of ECB," he says. Money markets scaled back their ECB rate cut expectations on Monday to currently price in a 79% probability of a cut, according to LSEG data. ([email protected])