[Macro Matters] 5/3 Weekly Briefing
1. Economic Data
China March Industrial Profits Rise, Defying Trade Tensions - BloombergIndustrial profits in China rose 2.6% in March(YoY)
Inflation Fear Is Making Some People Spend More—and Others Less - WSJ
This article suggests that naive interpretation on inflation expectation might end with
wrong insights. We always need to consider both sides on an issue.
Russia’s Oil Exports Edge Higher With Return of Sanctioned Ships
Russia’s crude oil exports surged higher for a second week despite sanctions imposed on Russian tankers.
Eurozone Business Sentiment Takes Hit From Tariffs - WSJ
All sectors in the Eurozone showed weaker sentiment amid tariff threats from D.J Trump.
US Economy Contracts for First Time Since 2022 on Imports Surge - Bloomberg
Don’t blame imports for the fall in America’s GDP
The US economy contracted 0.3% in the first quarter due to import surge and moderate spending,
Bloomberg explained. However, a column from the Economist pointed out that the explanation is
not enough to fully cover the drop in GDP as the bringing forward of imports to front-run tariffs
should not affect GDP.
China’s New Home Sales Slump Persists as US Tariffs Take Effect - Bloomberg
China’s residential property sales stayed weak in April.
China’s Export Orders Plunge, Hit by Trump’s Trade War - WSJ
China’s manufacturing PMI and measure of new export orders dropped sharply, which
indicates tariffs of the US start to hurt China’s industrial sector.
Eurozone Economy Picks Up Pace Ahead of Tariff Disruption - WSJ
The eurozone economy grew at a faster pace than the U.S. for the first time in almost three years.
Japan’s Job Market Stays Tight, Supporting Wage Momentum - Bloomberg
Japan’s labor market remained tight in March.
U.S. Crude Oil Stockpiles Post Unexpected Decline - WSJ
U.S. crude oil inventories fell unexpectedly last week as exports increased.
U.S. Employers Added 177,000 Jobs in April as Hiring Holds Up - WSJ
The Labor Department reported Friday that the U.S. added 177,000 jobs in April,
above market expectations.
Eurozone Inflation Holds Close to Target, Lining Up New Rate Cuts to Counter Tariffs - WSJ
EU CPI: 2.2%(on par with expectations) , Unemployment Rate: 6.2% (Worse) =>
Room to lower interest rates?
U.S. Factory Orders Rose in March - WSJ
Orders from U.S. factories grew in March, rising for a third straight month.
2. Central Bank
Federal Reserve Flags Risks Tied to Asset-Valuation Pressures - Bloomberg
Fed: “Even after recent declines in equity prices, prices remained high relative to
analysts’ earnings forecasts”
ECB Still Has a Gradual Margin for Rate Cuts, Villeroy Says - Bloomberg
Villeroy(Dovish): Strong guarantee on inflation: no extra inflation even for the next year.
There might be a slowdown in the economy, but not a recession.
ECB’s Kazaks Urges Cautious Steps Even as Growth Outlook Worsens - Bloomberg
Kazaks(Neutral): Rate cuts will come only after the growth outlook deteriorates.
Trump Bashes Powell, Touts Tariffs at Rally Marking 100 Days
Trump says that he knows more about interest rates than Powell does.
Bank Reserves at Fed Drop to $3 Trillion, Lowest Since Jan. 1 - Bloomberg
ECB Can Be Optimistic on Inflation, Guindos Tells Die Presse - Bloomberg
The European Central Bank Vice President Luis de Guindos expressed confidence
over its inflation goal.
3. Politics / World
The Russian Military Moves That Have Europe on Edge - WSJ
The Kremlin is expanding its military bases close to the border of Finland.
Russia’s Defence Minister claimed Russia should be ready for a conflict with NATO.
Nowadays, Russia spends more than 6% of GDP on military spending.
Furthermore, several western intelligence officials reported that more than 30000 people are
signing up every month this year.
Israel Pressured to Lift Aid Ban as Food, Fuel, Clean Water Dwindle in Gaza - WSJ
Conditions in Gaza under aid ban become worse, however Hamas has yet to submit.
Elite Universities Form Private Collective to Resist Trump Administration - WSJ
Top universities group up to deal with Trump, according to people familiar with the matter.
India, Pakistan exchange small arms fire across Kashmir border for fourth night | Reuters
World military spending hits $2.7 trillion in record 2024 surge | Reuters
Global military spending rose 9.4% in 2024, SIPRI reports. Ukraine spent all tax revenues
on military purposes.
Russia says last Ukrainian troops expelled from Kursk region, Kyiv denies assertion | Reuters
Putin claimed that Russia had taken over the Kursk region entirely,
but Kyiv denied the Kremlin's assertion. The Kremlin also approved for the first time that
North Korean soldiers have been supporting Russian troops in Kursk.
China holds off on new stimulus, shows composure in US trade war | Reuters
China downplays impact of Trump tariffs on economic recovery | Reuters
China stays cautious about extra stimulus or negotiations with the US.
Fox News Poll: The first 100 days of President Trump's second term
Even Fox News Polls claims that overall approval of Trump’s job performance comes in at 44%.
Putin announces May 8-10 ceasefire, Ukraine wants truce now | Reuters
Goldman Sachs Is Advising Countries Scrambling to Please Trump on Tariffs - WSJ
Chinese officials urge hospitals and researchers to reduce reliance on US imports for
pharmaceutical products and raw materials, according to the people familiar with the matter.
China Copper Market Gauge Hits 16-Month High on Demand Flurry - Bloomberg
The copper premium paid by Chinese buyers surged into its highest level since 2023.
This might indicate that Chinese production sentiment is resilient.
Amazon Denies Tariff Label Plans After Trump Called to Complain
Amazon canceled its plan to display the ‘tariff costs’ posed on products
after Trump blamed the action as ‘a hostile and political act.’
Germany, Greece Ask for EU OK to Ramp Up Defense Spending - WSJ
Russia Hopes Warmer Weather Will Boost Flagging Spring Offensive - WSJ
=> As the frozen lands harden amid warmer weather, Russia sees an opportunity
to intensify its offensive toward Ukraine.
Russia says it's waiting for Ukraine's response to May ceasefire and offer of direct talks | Reuters
India considers offering a rare 'forward most-favoured-nation' clause to the US and tariff
concessions on 90% of imports, two anonymous officials told Reuters.
'Never kneel': China taps Korean War and AI memes to hit back at Trump | Reuters
China’s propaganda video expresses a simple message: Never surrender to U.S bullies.
China Hints at Possible Thaw With US in Evaluating Trade Talks - Bloomberg
Chinese officials stated that they are currently evaluating the possibility of trade negotiations
with the U.S. Furthermore, China has quietly exempted some US imports from tariffs
according to people familiar with the matter.
Trump Proposes Slashing $163 Billion in Government Programs, While Boosting Military Spending - WSJ
Trump proposes $163 billion cut to US budget that slashes domestic spending | Reuters
The budget proposal: Downsizing programs that support renewable energy, education,
low-income households, foreign aid.
EU Could Offer to Buy $56 Billion of U.S. Products to End Trade War, Top Negotiator Says - WSJ
Iran must 'walk away' from all uranium enrichment, Rubio says | Reuters
Chinese military exercises foreshadow a blockade of Taiwan
China will keep squeezing Taiwan through “grey-zone” aggression. Plans such as an interruption
to shipping and cutting supply lines might be enough to defeat Taiwan without direct military
actions.
The unbearable self-indulgence of Europe
The article criticizes that some of Europe’s policies for boasting its ‘moral high ground’ only
annoy other countries and lower its flexibility. The writer claims that it’s time to ditch such
“luxury policies” to emphasize goals that really matter.
The trouble with MAGA’s manufacturing dream
The Economist represents several reasons why MAGA’s manufacturing dream can’t be achieved.
1: Low productivity despite high wage level 2: Not enough available robots in production lines
3: Outdated factories and infrastructures
Emigration from Africa will change the world
As other countries age, they will need African youth.
Israel strikes near Syria's presidential palace in 'message' to new leader Sharaa | Reuters
Israel bombed an area near the presidential palace in Damascus early on Friday.
4. Business / Market
Johnson & Johnson’s Rare AAA Rating No Longer at Risk, S&P Says
China-to-U.S. Cargo Shipments Dwindle as Ship Cancellations Increase - WSJ
Exclusive | China’s Huawei Develops New AI Chip, Seeking to Match Nvidia - WSJ
WSJ reported exclusively that Huawei started to test its new chip, hoping it can replace
NVIDIA’s H100 prohibited to use in China under the US restrictions.
Trump 2.0 Era Brings Flurry of Crypto Deals - WSJ
M&A activity among crypto businesses remains strong despite concerns over market conditions
that have slowed deals in other sectors.
Exclusive: Some Amazon sellers are pulling out of Prime Day amid Trump tariffs | Reuters
Some Amazon sellers who mainly import Chinese products are now reluctant to participate
in Prime Day amid strict tariff policies against China.
Coca-Cola Says Global Strength Will Make Tariffs Manageable - Bloomberg
Coca-Cola showed higher-than-expected quarterly profits and maintained its guidance unlike
rival PepsiCo.
Kraft Heinz Cuts Outlook on Weakening Consumer, Tariff Costs
OpenAI Lets Users Go Shopping With ChatGPT - Bloomberg
OpenAI unleashed new features on ChatGPT to enable customers to go shopping directly.
=> AI companies must strive to survive competition. Now or Never. On edge.
IBM to Spend $150 Billion in U.S. Over Next Five Years - WSJ
Xiaomi Joins China AI Game With Maiden DeepSeek-Like Model - Bloomberg
Xiaomi debuted its open-source AI MiMo, amplifying the competition in AI development among
Chinese tech companies. Xiaomi also stated that its ultimate goal is to develop AGI.
Alibaba Rolls Out ‘Instant Commerce’ Feature as China Delivery Battle Heats Up - WSJ
Alibaba Group has added a new rapid-delivery feature to its shopping platform.
Trump eases auto tariffs burden as Lutnick touts first foreign trade deal | Reuters
Tariffs imposed on imported auto parts in U.S.-made cars will be exempted.
Intel attracts interest for test chips using new manufacturing process | Reuters
Intel said that several customers are testing Intel’s foundry unit.
OpenAI Rolls Back GPT-4o Update That Made ChatGPT Fawning, Disingenuous - Bloomberg
TikTok Fined $600 Million in Europe Over China Surveillance Risks - WSJ
TikTok was fined $600 Million in Europe over privacy violations.
Exclusive: WHO to back use of weight-loss drugs for adults globally, raises cost issue | Reuters
WHO plans to officially back the use of weight-loss drugs to treat obesity in adults for the first time,
a memo reviewed by Reuters on Thursday showed. Also, the UN wants a breakthrough to provide
drugs to low income countries.
Apple shares fall as buyback cuts, tariff fears fan investor jitters | Reuters
Nvidia raised concerns about Huawei's growing AI capabilities with US lawmakers | Reuters
Nvidia claimed that demand on Huawei’s chips can surge if Chinese AI models continue using
Huawei chips for optimization.
Chinese EV makers sell more plugin-hybrids in the EU to avoid tariffs, research firm says | Reuters
Chinese carmakers are selling more plug-in-hybrids in the European Union to avoid import tariffs
on Chinese-made electric cars, data released on Friday showed.
Microsoft forecasts strong growth for Azure cloud business, shares surge 7% | Reuters
India’s new chip fab rises from the dust
India’s first commercial chip factory is about to operate. India aims to reduce its reliance on
cheap chips from China as a chip shortage could pose a significant national security threat.
Most of the upcoming facilities are for end-up stage only, which means India cannot actually
‘produce’ semiconductors by itself. Nonetheless, there is a certain possibility that India can
come up with its own chip-design firms as 125,000 Indians, which accounts for 20% of chip
designers around the world, already work in semiconductor design.
The Information reported that NVIDIA began designing chips tailored to comply
with US export regulations.
US lawmakers urge SEC to delist Alibaba and Chinese companies, FT reports | Reuters
FT reported that two Republican lawmakers urged the SEC to delist Alibaba and some
Chinese companies which seem to support the Chinese military.
US FDA accepts Novo Nordisk's application for oral Wegovy for weight loss | Reuters
5. Indices & Commodities
DXY and interest rates soared due to optimistic expectations on trade negotiations between the U.S. and China.
Strong earnings of tech companies and signs of easing trade tensions boosted global markets.
Gold prices declined as Treasury yields and the DXY rose.
OPEC+ Discusses 400,000-Barrel Production Hike Ahead of Call - Bloomberg
Key OPEC+ nations are discussing making another production increase of roughly 400,000 barrels => Brent futures extended losses.
6. Opinion
Since my stance and thoughts remain largely unchanged from what I wrote last week, I decided to skip this week’s Summary & Opinion.
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