[True Zoom Finance] US consumer confidence plummets; Russia-Ukraine Black Sea ceasefire; large number of Chinese companies added to US blacklist

The U.S. March consumer confidence index fell to its lowest level in four years, while inflation expectations for the next year rose to their highest in two years. Federal Reserve Governor Kugler expressed concern about rising prices and inflation expectations.

Overnight Highlights

· U.S. stocks closed higher on Tuesday, with Apple (AAPL.US) rising and Nvidia (NVDA.US) falling as investors assessed consumer confidence data and bet on the Trump administration adopting a more flexible trade policy stance next week. U.S. Treasury yields declined, pressured by weak consumer confidence data, as the cloud of an uncertain economic outlook overshadowed initial market optimism about potential flexibility from Trump on new tariffs next week. The dollar weakened against the yen and held steady against the euro as uncertainty over Trump's planned tariffs kept traders cautious. Oil prices were mixed, with a maritime and energy ceasefire agreement between Russia and Ukraine offsetting concerns about tightening global supply due to U.S. threats of tariffs on countries buying Venezuelan oil. Gold prices rose, supported by safe-haven demand, as Trump's upcoming tariff announcement next week could stoke inflation.

International News

· The U.S. March consumer confidence index fell to its lowest level in four years, while inflation expectations for the next year rose to their highest in two years. Federal Reserve Governor Kugler expressed concern about rising prices and inflation expectations.

· The U.S. stated that Russia and Ukraine have agreed to a ceasefire in the Black Sea and established a mechanism to prohibit strikes on energy infrastructure. However, Russia later said the Black Sea agreement would only take effect after some sanctions are lifted and also refused to hand over the Zaporizhzhia nuclear power plant. U.S. intelligence believes Russia and Ukraine may prefer to keep fighting rather than rush into a hasty reconciliation.

· Trump said the April 2 tariffs are finalized and a "very significant" announcement about new U.S. businesses will be made on Wednesday. According to the Financial Times, Trump is considering a two-step tariff plan for April 2, including immediate tariffs of up to 50%.

· Moody's warned of further weakening in U.S. fiscal strength and rising debt pressure. Politico reported that Trump wants to include a debt ceiling increase in the tax bill.

· Bridgewater founder Ray Dalio warned of severe U.S. debt conditions and urged House Republicans to reduce the budget deficit-to-GDP ratio to 3%.

· After a shocking White House group chat leak, Trump expressed confidence in his national security advisor and said he saw no need for a criminal investigation.

· Canada's Prime Minister said he hopes for "serious" trade talks with the U.S. and is prepared with a C$95 billion retaliation list.

· Three ECB policymakers emphasized uncertainty around the April rate decision. The French central bank governor believes the ECB still has room for further rate cuts, but the pace and extent remain debatable.

· German business optimism hit its highest since June last year, boosted by incoming Chancellor Merz's spending plans.

· According to local media, Apple (APPL.US) plans to hold its annual Worldwide Developers Conference in the week of June 9, where it is expected to announce redesigned iPhone, iPad, and Mac operating systems.

· Japanese Prime Minister Shigeru Ishiba plans strong measures to ease the impact of rising prices on consumers.

· Prominent investor Cathie Wood remains bullish on Tesla (TSLA.US), predicting the stock could reach $2,600 in five years, nearly 10 times its current price.

Greater China News

· The U.S. added over 50 entities from mainland China, Hong Kong, and Taiwan, including Inspur Software, to its "Entity List," citing threats to U.S. national security or foreign policy interests.

· China's ambassador to Canada warned the Canadian government not to use China as a "bargaining chip" in trade talks with the U.S. but expressed willingness to seek a bilateral free trade agreement if Canada removes barriers to Chinese investment.

· Driven by massive share placements from Xiaomi (1810.HK) and BYD (1211.HK), Hong Kong stock fundraising in March is set to break monthly records.

· CATL's Hong Kong IPO received approval from China's securities regulator, with plans to issue up to 220 million H shares.

· Morgan Stanley raised its China stock target again after just over a month, listing unexpected impacts from escalating U.S.-China tensions as a key market focus.

· Kuaishou Technology (1024.HK) reported its slowest quarterly revenue growth in four years, pledging increased AI investment. Nongfu Spring, once mired in controversy last year, saw its 2024 profit growth slow to its lowest since listing.

· Chinese milk tea brand CHAGEE filed for a U.S. IPO with the stock code "CHA."

Commodities & Forex

· The Bloomberg Dollar Index fell as U.S. consumer confidence hit a four-year low; the yen led gains among G-10 currencies.

· WTI dipped slightly as traders assessed Russian crude supply prospects. New York copper hit another record high amid speculation about U.S. tariffs on copper imports. Heavy inflows into gold ETFs pushed gold prices higher.

Earnings & Economic Data Focus

· U.S. EIA Crude Oil Inventories (week to March 21) (prior: 174.5K, forecast: -107.4K)

Source: Golden Horse Capital Management (Hong Kong) Limited

Author: Terry Chow

Proofreader: Gloria Guo