Macro Wrap

US equities fell sharply on Wednesday after US’ tightened curbs on Nvidia’s China exports saw a tech stock rout, Nvidia tumbled nearly 7% after warning of a $5.5B revenue hit. Nasdaq led losses at Wall Street with a 3.1% d/d decline, while the Dow and S&P 500 lost 1.7% d/d and 2.2% d/d respectively., while the Nasdaq dropped 3.1%. DXY resumed its fall (-0.8% d/d to 99.38), The 2Y yield fell 8bps to 3.77%, while the 10Y yield dropped 6bps to 4.28%, and Gold soared 3.5% to a record $3,343/oz,

US Fed Chair Powell signalled a patient stance amid Trump’s evolving trade policy, adding to rate cut expectations. Fed Chair Jerome Powell signalled a wait-and-see approach before considering any adjustments to the Fed’s policy stance, adding that the central bank could face difficult trade-offs in achieving its dual mandate of maximum employment and stable prices due to Trump’s tariff. Sentimentally neutral for USD

US retail sales jumped 1.4% m/m in Mar, in line with market expectations. Most of the uptick came from car sales, food services and drinking places, and building materials. Excluding autos and gasoline, sales rose 0.8% versus an upwardly revised 0.8% prior. Sales in the control group — which excludes cars, gas, food services, and building materials — rose 0.4% against an upwardly revised 1.3% prior. Sentimentally positive for USD

UK CPI rose 2.6% y/y in Mar, an easing from the 2.8% increase in Feb, the weakest inflation since Dec 2024, and below the 2.7% predicted by the Bank of England (BOE). The slowdown was driven by cheaper computer games, falling motor fuel prices and unchanged food costs. Services inflation, which is being watched closely by the BOE’s for signs of domestic price pressures, fell to 4.7% from 5.0%. The UK central bank had expected 4.9%. Sentimentally positive for GBP.

The May WTI contract closed up 1.9% at $62.5, as news that China was willing to negotiate with the Trump administration helped lift sentiment and the EIA also announced lower than expected crude inventory build. Positive for crude prices.

Data watch: todays main focus remains ECB which will hold Monetary policy, and we expect pause in policy stance citing the trade war uncertainty as well as major changes to German and European Commission fiscal rules. Followed by US Housing starts and building permits data for Mar; the usual weekly initial jobless claims for the week ending 12 Apr; as well as the Philadelphia Fed business outlook index for Apr.