Our latest ING Consumer Research survey sheds light on what European consumers are worried about – and what they believe governments should prioritise in spending
Latest round of tariffs will come into effect on 5 and 9 April. Donald Trump announced the imposition of a 10% baseline tariff on all imports to the United States from 5 April. For countries with which the United States has the biggest trade deficits, higher, individualised reciprocal tariffs will take effect on 9 April.
The Nikkei Index can be estimated using nominal GDP, net domestic fund demand (corporate savings rate + fiscal balance), Abenomics dummy and Economic Policy Uncertainty Index. For the current Q225, if we place nominal GDP at around JPY624trn and net domestic fund demand at +1.3%, and assume that global uncertainty continues, the macro fair value would be around JPY34,800, roughly in line with the prevailing Nikkei index
At 0.76 (vs 0.25 last week) our Risk Index has jumped decisively back into risk-averse territory. The Index bounced off its 100-day moving average suggesting a sustained reduction in investor risk appetite.
Ahead of the tariff announcements markets are trading cautiously. Asian stock markets are marginally higher whilst European futures are indicating a marginally softer opening. UST yields are up but have mainly been going sideways during Asian hours and the Eurex complex is essentially unchanged from last night.
President Trump announced tariffs on autos and parts. In line with our expectations, and ahead of the main course expected for April 2nd, the US announced this week 25% tariffs on imports of autos and auto parts.
The US administration is poised to announce a new round of “reciprocal” tariffs on 2 April after imposing a range of tariffs on China, Mexico, and Canada, a separate set of tariffs on steel, aluminum, and derivative products, and newly announced levies on autos and auto parts.
Last week's FOMC meeting appeared to come as a relief to many market participants as two cuts remained in the dots for both this year and next (some had expected a cut to come out for this year). Further, Chair Powell seemed to downplay concerns about inflation, offering a bit more emphasis on the growth side of the mandate than perhaps assumed going into the meeting.
PMI data released today will be closely scrutinised to gauge how the eurozone economy has navigated uncertainty triggered by Trump’s tariffs threats. Besides some sentiment effect, it is too early to assess the impact on the economy of Germany’s bold policy response to recent geopolitical events, with a commitment to heavily invest domestically.
The Nasdaq and the S&P 500 ended higher, while the dollar strengthened as cooler-than-expected inflation data calmed tariff concerns. Meanwhile, Treasury yields gained on potential inflationary impact of global trade war. Oil prices jumped on lower-than- expected oil and fuel inventories in the U.S. Safe-haven gold rose.
Germany’s chancellor-in-waiting Friedrich Merz announced plans for a major increase in defense and infrastructure spending. If passed by the German parliament, the plans would mark a significant fiscal shift that has the potential to boost growth and support Eurozone assets.
Yesterday, the ECB lowered its GDP forecasts for this year and next, confirming a downward trend in forecast revisions.US tariffs and fiscal stimulus in Germany represent opposing risks for GDP trajectory.
Goldman Sachs plans to trim its staffing by 3% to 5% in an annual performance review process this spring, said a source familiar with the matter who declined to be identified discussing personnel matters.
