LVMH market cap plunges below Hermes after Q1 sales

EU Mid-Market Update: Ripple from tariff impact keeps fading but China stirs the pond with halt to Boeing plane deliveries; LVMH market cap plunges below Hermes after Q1 sales.

Notes/observations

- Calmer atmosphere resonates across markets with CBOE VIX continuing to decline, now back at Apr 4th lows below 30. As the dust settles, remaining theme is that incoming trade deals/discussions and US exemptions on electronics indicate a softer approach by Trump. Conversely this morning, China announced a halt to Boeing jet deliveries. Although not unusual in recent years, the timing is seen as slightly escalatory on trade front.

- In UK, Sterling hits 6-month high above $1.32 on easing trade fears as Trump tariff delay boosts UK auto sentiment. UK jobs report saw firms cut 78K jobs in March, the biggest drop since 2020, ahead of tax and wage cost hikes. Markets nearly fully price in May BoE rate cut.

- Asia closed higher with Nifty50 outperforming +2.1%. EU indices +0.5-1.7%. US futures +0.1-0.3%. Gold -0.2%, DXY -0.1%; Commodity: Brent -0.1%, WTI -0.1%; Crypto: BTC +1.7%, ETH +0.1%.

Asia

- RBA Mar Minutes noted that was premature to cut rates. Not yet possible to determine the timing of the next move in rates; Upcoming May meeting would be opportune time to reconsider, but a move in May was not "predetermined.

- New Zealand Mar Food Prices M/M: +0.5% v -0.5% prior.

- China markets said to face liquidity pressures, however PBOC 'would help' (**Note: economists continue to call for interest rate and RRR cuts to counter tariffs).

- Japan Fin Min Kato reiterated FX rates should be determined by markets, excessive volatility would negatively impact economic and financial stability.

- South Korea Finance Ministry announced extra KRW12T budget proposal (**Note: KRW2T more than planned last week).

Europe

- UK Mar BRC LFL Sales Y/Y: 0.9% v 0.6%e.

Americas

- US Treasury Sec Bessent stated that did not see d dumping of US treasuries; The VIX spiked and had likely peaked. Not seen increased foreign competition at US debt auctions and no evidence of sovereign sales. Still had a strong dollar policy and the dollar remained a global reserve currency. Log way from a 'break the glass' situation.

- White House NEC Dir Hassett stated that did not see a US recession at all.

- Fed's Bostic (non-voter for 2025) noted that currently the range of possible outcomes had 'multiplied'; The fog had gotten really thick. Not in position to boldly move in any direction, would not be prudent; more clarity needed.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +1.22% at 506.02, FTSE +0.96% at 8,212.13, DAX +1.70% at 21,263.21, CAC-40 +0.52% at 7,311.26, IBEX-35 +1.53% at 12,763.40, FTSE MIB +1.42% at 35,503.00, SMI +0.05% at 11,528.30, S&P 500 Futures +0.18%]

Market focal points/key themes: European indices opened higher across the board and continued advance through the early part of the session; among sectors leading the way higher are industrials and telecom; trade considerations seen as main driver of the markets; underperforming sectors include consumer discretionary and health care; automotive subsector getting a boost after potential reprieve on auto tariffs; luxury subsector in distress following LVMH’s guidance, dragging on consumer discretionary sector and CAC; De La Rue gets firm offer from Atlas, with Truell reportedly increasing offer; Applied Materials takes 9% stake in BE Semi; earnings expected in the upcoming US session include Piaggio, Bank of America, Citigroup and Johnson & Johnson.

Equities

- Consumer discretionary: LVMH [MC.FR] -6.5% (Q1 earnings misses estimates, analyst downgrade), Puma [PUM.DE] +3.0% (Berenberg initiates with buy), Pandora [PNDORA.DK] +1.0% (analyst upgrade).

- Materials: Salzgitter [SZG.DE] -5.0% (analyst downgrade).

- Industrials: Airbus [AIR.FR] +0.5% (China reportedly orders halt to Boeing jet deliveries), BMW [BMW.DE] +3.5%, Volkswagen [VOW.DE] +3.5%, Mercedes [MBG.DE] +3.5%, Daimler Truck [DTG.DE] +3.5% (Trump considers pausing vehicle tariffs), Volvo [VOLVA.SE] +2.5% (analyst upgrade + Trump considers pausing vehicle tariffs) - Technology: Wise [WISE.UK] -2.0% (trading update) - Telecom: Ericsson [ERICB.SE] +5.5% (earnings; guidance), Publicis [PUB.FR] +2.5% (earnings).

Speakers

- ECB Q1 Bank Lending Survey noted that Banks tightened credit standards for firms at the start of the year as dangers to the region’s economy increased; Saw further net tightening in Q2.

- German ZEW Economists noted that erratic changes in the US trade policy were weighing heavily on expectations in Germany.

- Sweden govt budget said to see 2025 GDP growth at 2.1% and CPIF inflation at 2.5%. It saw 2026 GDP growth at 2.8% and CPIF inflation at 1.9%.

- Japan Econ Revitalization Min Akazawa commented on upcoming US tariff talks and noted would seek what was most effective for national interest (**Note: trade talks scheduled for Thurs, Apr 17th).

- S&P affirmed South Korea sovereign rating at 'AA'; Outlook stable.

- India Central Bank (RBI) stated tht saw no need to activate the countercyclical capital buffer (CCyB).

- China said to have halted Boeing aircraft deliveries and any purchases of aircraft-related equipment and parts.

- IEA Monthly Oil Report cuts the 2025 global oil demand growth from 1.03Mbpd to 726KM bpd (demand seen at 103.5M vs. 103.9M prior) and cut the 2025 global oil supply growth from 1.6M bpd to 1.2M bpd (supply seen at 104.2M vs. 104.5M prior).

Currencies/fixed income

- Calm remain in the FX markets following last week’s volatility. Bond yields were steady as well while dealers noted swap curves suggested rates markets remain pessimistic about the economic outlook further in the future.

- USD tried continued its slow recovery after President Trump stated that he was considering some short-term exemptions to his 25% tariff on foreign-made vehicle imports. But was off its best level after China announced it would halt Boeing aircraft deliveries and any purchases of aircraft-related equipment and parts.

- EUR/USD at 1.1350 area with focus on Thurs ECB rate decision.

- USD/JPY continued to hover above 143 level. Japan confirmed it would by in Wasgh DC on Thurs for trade talks. FX to also be part of the discussion.

- 10-year German Bund yield at 2.50% and 10-year Gilt yield at 4.64%. 10-year Treasury yield at 4.38%.

Economic data

- (DE) Germany Mar Wholesale Price Index M/M: -0.2% v +0.6% prior; Y/Y: 1.35 v 1.6% prior.

- (UK) Mar Jobless Claims Change: No est v +44.2K prior; Claimant Count Rate: No est v 4.7% prior; Payrolled Employees (monthly change): -15Ke v +21K prior.

- (UK) Feb Average Weekly Earnings 3M/Y: 5.9% v 6.0%e; Weekly Earnings (ex-bonus) 3M/Y: 5.9% v 6.0%e.

- (UK) Feb ILO Unemployment Rate: 4.4% v 4.4%; Employment Change 3M/3M: +206K v +170Ke.

- (NO) Norway Mar Trade Balance (NOK): 60.2B v 84.6B prior.

- (DK) Denmark Mar PPI M/M: -2.0% v +0.9% prior; Y/Y: 13.2% v 14.4% prior.

- (IN) India Mar Wholesale Prices (WPI) Y/Y: 2.1% v 2.5%e.

- (FR) France Mar Final CPI M/M: 0.2e v 0.2% prelim; Y/Y: 0.8e v 0.8% prelim.

- (FR) France Mar Final CPI EU Harmonized M/M: 0.2e v 0.2% prelim; Y/Y: 0.9e v 0.9% prelim; CPI Index (ex-tobacco):# v 119.29e.

- (PL) Poland Mar Final CPI M/M: 0.1% v 0.1% prelim; Y/Y: 4.9% v 4.9% prelim.

- (TR) Turkey Mar Central Gov't Budget Balance (TRY): -261.5B v -310.1B prior.

- (IT) Italy Feb General Government Debt: 3.024T v 2.981T prior (record high).

- (IN) India Mar Trade Balance: -$21.5B v -$15.5Be; Exports Y/Y: +0.7% v -10.9% prior; Imports Y/Y: +11.4% v -16.3% prior.

- (DE) Germany Apr ZEW Expectations Survey: -81.2 v -86.9e; Current Situation Survey: -14.0 v +10.0e.

- (EU) Euro Zone Apr ZEW Expectations Survey: -18.5 v +39.8 prior.

- (EU) Euro Zone Feb Industrial Production M/M: 1.1% v 0.3%e; Y/Y: +1.2% v -0.7%e.

- (IS) Iceland Mar International Reserves (ISK): 866B v 899B prior.

Fixed Income Issuance

- (UK) DMO sold £4.0B in 4.5% Mar 2035 Gilts; Avg Yield: 4.638% v 4.679% prior; bid-to-cover: 2.85x v 2.92x prior; Tail: 0.4bps v 0.5bps prior.

- (ID) Indonesia sold total IDR12.0T vs. IDR12.0T target in Islamic bills and bonds (sukuk).

Looking ahead

- (NG) Nigeria Mar CPI Y/Y: No est v 23.2% prior.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (ZA) South Africa Feb Total Mining Production M/M: No est v -1.2% prior; Y/Y: No est v -2.7% prior; Gold Production Y/Y: No est v 1.0% prior; Platinum Production Y/Y: No est v -3.8% prior.

- 05:30 (CH) Switzerland to sell 3-month Bills.

- 05:30 (DE) Germany to sell €4.5Bin 2.4% Apr 2030 BOBL.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 05:30 (ZA) South Africa to sell combined ZAR3.75B in 2032, 2033 and 2037 bonds.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 06:00 (IE) Ireland Feb Trade Balance: No est v €12.2B prior.

- 06:00 (FI) Finland to sell combined €1.5B in 2031 and 2055 RFGB Bonds.

- 06:30 (IN) India Mar CPI Y/Y: 3.5%e v 3.6% prior.

- 06:30 (EU) ESM to sell €1.1B in 6-month Bills.

- 06:30 (TR) Turkey to sell (2 tranches).

- 07:00 (BR) Brazil Apr FGV Inflation IGP-10 M/M: -0.3%e v 0.0% prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 08:15 (CA) Canada Mar Annualized Housing Starts: 240.0Ke v 229.0K prior.

- 08:30 (US) Mar Import Price Index M/M: 0.0%e v 0.4% prior; Y/Y: No est v 2.0% prior; Import Price Index (ex-petroleum) M/M: No est v 0.4% prior.

- 08:30 (US) Mar Export Price Index M/M: 0.0%e v 0.1% prior; Y/Y: No est v 2.1% prior.

- 08:30 (US) Apr Empire Manufacturing: -12.5e v -20.0 prior.

- 08:30 (CA) Canada Mar CPI M/M: 0.7%e v 1.1% prior; Y/Y: 2.7%e v 2.6% prior; CPI Core- Median Y/Y: 3.0%e v 2.9% prior; CPI Core- Trim Y/Y: 3.0%e v 2.9% prior; Consumer Price Index: 163.9e v 163.0 prior.

- 08:30 (CA) Canada Feb Manufacturing Sales M/M: -0.2%e v +1.7% prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 (CA) Canada Mar Existing Home Sales M/M: No est v -9.8% prior.

- 10:30 (ZA) South Africa SARB Monetary Policy Review.

- 11:00 (PE) Peru Mar Unemployment Rate: 6.7%e v 6.3% prior.

- 11:00 (PE) Peru Feb Economic Activity Index (Monthly GDP) Y/Y: 3.4%e v 4.1% prior.

- 11:00 (CO) Colombia Feb Retail Sales Y/Y: 7.2%e v 10.2% prior.

- 11:00 (CO) Colombia Feb Manufacturing Production Y/Y: 1.7%e v 1.9% prior; Industrial Production Y/Y: -0.8%e v -0.1% prior.

- 11:30 (IL) Israel Mar CPI M/M: 0.3%e v 0.0% prior; Y/Y: 3.2%e v 3.4% prior.

- 11:30 (US) Treasury to sell 52-Week Bills.

- 11:30 (US) Treasury to sell 6-Week Bills.

- 16:30 (US) Weekly API Oil Inventories.

- 17:00 (KR) South Korea Mar Import Price Index M/M: No est v -0.8% prior; Y/Y: No est v 4.6% prior.

- 17:00 (KR) South Korea Mar Export Price Index M/M: No est v -0.6% prior; Y/Y: No est v 6.3% prior.

- 18:45 (NZ) New Zealand Mar Trade Balance (NZD): No est v 0.5B prior; Exports: No est v 6.7B prior; Imports: No est v 6.2B prior.

- 19:10 (US) Fed’s Cook.

- 19:50 (JP) Japan Feb Core Machine Orders M/M: +1.2%e v -3.5% prior; Y/Y: -0.9%e v +4.4% prior.

- 20:30 (AU) Australia Mar Westpac Leading Index M/M: No est v 0.07% prior.

- 21:30 (CN) China Mar New Home Prices M/M: No est v -0.1% prior; Used Home Prices M/M: No est v -0.3% prior.

- 21:10 (KR) Bank of Korea to sell KRW1.0T in 3-Year Bonds; Avg Yield: 2.4200% v 2.586% prior; bid-to-cover: 2.80x prior (Apr 6th 2025 under 2.875% coupon).

- 21:10 (JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 3~5 Years; 5~10 and 25Years.

- 22:00 (CN) China Q1 GDP Q/Q: 1.4%e v 1.6% prior; Y/Y: 5.2%e v 5.4% prior; GDP YTD Y/Y: 5.2%e v 5.0% prior.

- 22:00 (CN) China Mar Industrial Production Y/Y: 5.9%e v 5.6% prior; Industrial Production YTD Y/Y: 5.9%e v 5.9% prior.

- 22:00 (CN) China Mar Retail Sales Y/Y: 4.3%e v 4.2% prior; Retail Sales YTD Y/Y: 4.3%e v 4.0% prior.

- 22:00 (CN) China Mar YTD Fixed Urban Assets Y/Y: 4.1%e v 4.1% prior.

- 22:00 (CN) China Mar YTD Property Investment Y/Y: -9.9%e v -9.8% prior; Residential Property Sales Y/Y: No est v -0.4% prior.

- 22:00 (CN) China Mar Surveyed Jobless Rate: 5.3%e v 5.4% prior.

- 23:00 (NZ) New Zealand Mar Non Resident Bond Holdings: No est v 61.8% prior.