End of a volatile Q1 but no sign of volatility abating as we await Trump's tariff announcements

Good morning

Option expiries back to 3pm London time, key US data releases back to 1.30pm/3.00pm london time after UK clock change this weekend.

Well what a splendid weekend, and what a difference a bit of warm sunny weather makes.  OK, there was still a chilly breeze which made it one of those odd times where you’d walk down the street and some people would still be wrapped up in coats while others had braved the shorts and t-shirts.   The forecast for the whole week shows sunshine, with temperatures pushing towards 20°c but not quite getting there.  Still cold overnight mind you. 

Anyone looking for a cheap treat in London would do well to head to 22 or 8 Bishopsgate.  Both are pretty new, and very tall buildings and both have viewing platforms up on the 58th (22nd Bishopsgate – Horizon 22) and 50th (8 Bishopsgate – Lookout) floors.  Access to is free although it is sensible to book in advance.  You do need to book well in advance for Horizon but Lookout is much easier, OK it is 8 floors lower but the view is still hugely spectacular, particularly on clear days such as those this weekend.   There aren’t many things you can do that are free.  By contrast, The Shard’s viewing platform is taller, around the 70th floor and has a full 360° vista, but costs £38 for an adult. 

Friday’s trading day came and went with little real fuss.  GBPUSD traded broadly within a 1.2920 and 1.2965 range, as I type it is at the upper end of that range.  EURUSD had seen a low of 1.0765 Friday, but had a strong push higher to 1.0845, although was unable to break above that level despite trying a few times overnight and this morning, now back at 1.0835.  The USD weakness comes as markets talk of lower US growth and more rate cuts from the Fed to counter the tariff-led weakness in the US economy.  The relative strength of EUR over GBP is noticeable in GBPEUR, the pair had been as high as 1.2025 last week but a sell-off through Friday saw it trade as low as 1.1945.  We’ve recovered a little to 1.1970 this morning. 

Equity prices were generally lower Friday as the markets await Trumps ‘Liberation Day’ on Wednesday.  Overnight most Asian markets were lower, Japan hit hardest with Nikkei down over 4%.  Talk that Trump is still looking for larger and wider-ranging tariffs than the recent reports suggest, while other nations are preparing their response should they be hit hard on 2nd April.  With all the uncertainty it is little surprise that gold has hit record highs yet again, this time up at $3.128.

We’ve seen the imprisonment of Erodgan’s opponent Imamoglu and we look on it as a loss of democracy, with protests taking place across Turkey.  Meanwhile in France, I see Marine Le Pen could be barred for standing in the next presidential election if she is sentenced for using EU money to pay party salaries.  Now I don’t know all the ins and outs here but it seems judges will have the power to prevent her from standing in the election in which she is one of the potential winners.  Many don’t like her right-wing policies but this smells a little bit of getting rid of political opponents, just as we have seen in Turkey.

In other news, Trump has said he is very unhappy with Putin who doesn’t seem to be doing what Trump says with regards to peace in Ukraine.  Really, what did he expect?  Did he also expect Greenland to welcome US with open arms?  Or expect countries to accept tariffs with no retaliation?  Well, I actually think yes, he did expect that. He’s in for a nasty surprise, but I’m not comfortable with how irrationally he will respond.

Congratulations to Crystal Palace, Notts Forest, Aston Villa and Man City for making it to the FA cup semi-finals which take place on 26th April.  No great surprise that Man City are favourites but they have to get through high-flying Forest first.  Premier league action returns this week, can’t say I’m looking forward to Chelsea v Spurs n Thursday.  That rarely goes well for Spurs!

Looking to the week ahead, RBA are expected to leave rates unchanged at their meeting early tomorrow morning.  EU inflation tomorrow, US ISM PMI’s tomorrow and Thursday, while the week also brings US employment data including JOLTS Tuesday, ADP Wednesday, Challenger and initial claims Thursday and the finale, the nonfarm payrolls Friday.

So with the first quarter pretty much out of the way and a week of sunshine ahead you’d think things can’t get a lot better. Well, most domestic bills are going up, including gas and electricity, water, and even council tax, despite the many clips of Starmer doing the rounds where he assured us all that he would freeze council tax levels.  We are paying more and getting less, that’s for sure and I for one am not happy, particularly when I read of the huge dividends being paid to energy and water firms.

And on that note I will end today’s rant, and wish you all a very tremendous day. 

-  13.00 German HICP

-  14.45 US Chicago PMI

-  00.30 Japan unemployment

-  00.50 Japan Tankan survey

-  01.30 AUS retail sales

-  02.45 China caixin manufacturing PMI

-  04.3.0 RBA rate announcement

-  05.30 RBA press conference