Nvidia hit by new chip export curbs – UK inflation cools

EU mid-market update: Trade concerns continue to mount as China wants respectful, consistent dialogue with Trump; Nvidia hit by new chip export curbs; UK inflation cools.

Notes/observations

- Trade concerns continue to dictate price action.

- China is reportedly open to resuming trade talks with the U.S., but wants President Trump to rein in his cabinet, demonstrate consistency, and show greater respect in diplomatic dealings. Beijing seeks a clear U.S. point person—authorized by Trump—to lead the negotiations, though it is also open to Trump taking the lead himself. Key Chinese concerns include U.S. policy on Taiwan and sanctions, which they want addressed in any future dialogue. Chinese officials have taken past silence from Trump on hawkish remarks by U.S. officials as implicit endorsement. Earleir overnight, China also replaced top trade negotiating official.

- Nvidia has disclosed that the U.S. govt will indefinitely require export licenses for its H20 chips and any similar products bound for China. The move is expected to result in a $5.5B charge in the first quarter of fiscal 2026. Despite having secured $18B in H20 orders this year, NVIDIA reportedly failed to notify some major Chinese customers in advance. Note: China accounted for $17B, or 13%, of Nvidia’s total revenue last year.

- UK inflation in March came in slightly below expectations, with headline CPI rising 0.3% month-on-month (vs 0.4% expected) and 2.6% year-on-year (vs 2.7% expected), marking the slowest annual pace since Dec 2024. Core CPI matched forecasts at 3.4% year-on-year. Services inflation also eased to 4.7% (vs 4.8% expected), its lowest level since Dec 2024. BOE futures now fully pricing 25bps rate cut next month.

- ASML shares trade lower after it reported Q1 2025 net bookings, which came in below estimates and the company maintained its full-year revenue and margin guidance despite tariff-related uncertainties, though its management cautioned that tariffs remain a fluid and disruptive near-term risk.

Asia

- China Q1 GDP Q/Q: 1.2% v 1.4%e; Y/Y: 5.4% v 5.2%e.

- China Mar Industrial Production Y/Y:7.7% v 5.9%e (**Note: last major economic figures released from China prior to the imposition of US tariffs on April 2nd).

- China Mar Retail Sales Y/Y: 5.9% v 4.3%e.

- China Mar YTD Fixed Urban Assets Y/Y: 4.2% v 4.1%e.

- China Mar YTD Property Investment Y/Y: -9.9% v -9.9%e; Residential Property Sales Y/Y: -0.4% v -0.4% prior.

- China Mar Surveyed Jobless Rate: 5.2% v 5.3%e.

- China Mar New Home Prices M/M: -0.1% v -0.1% prior; Used Home Prices M/M: -0.2% v -0.3% prior.

- Japan Feb Core Machine Orders M/M: 4.3% v 1.2%e; Y/Y: +1.5% v -0.9%e.

- Australia Mar Westpac Leading Index M/M: -0.11% v 0.07% prior.

- BOJ Gov Ueda stated that might need policy response to "bad scenario" of US tariffs, but would decide appropriately in line with developments.

- China govt said to have named Li Chenggang as Vice Commerce Minister, (replacing Wang Shouwen) and replaced its top trade negotiating official.

Americas

- US govt informed Nvidia it required a license for export to China, with Nvidia now expecting $5.5B charges in Q1:2026 associated with its H20 chips.

- Commerce Department issued new export licensing requirements on Nvidia H20 and AMD MI308 and their equivalents to China [**TTN Note: On May 15th, White House is scheduled to decide on AI Diffusion Rule].

- US said to plan to use tariff negotiations to 'isolate China', in a plan pitched by Treas Sec Bessent.

Energy:- Weekly API Crude Oil Inventories: +2.4M v -1.1M prior.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.95% at 503.36, FTSE -0.58% at 8,201.53, DAX -0.62% at 21,099.68, CAC-40 -0.82% at 7,275.24, IBEX-35 -0.38% at 12,822.66, FTSE MIB -0.87% at 35,532.00, SMI -0.76% at 11,510.30, S&P 500 Futures -0.65%].

Market focal points/key themes: European indices opened lower across the board and trended into the red through the early part of the session; trade concerns weighing on risk sentiment as reports White House considering new tariffs; Israel and Norway early close for holiday; among sectors managing gains are consumer discretionary and utilities; sectors inclined to the downside include materials and technology; tech stocks weight down by prospect of semiconductor tariffs and ASML’s mixed earnings; focus on US retail sales figures coming out later in the day as well as BOC rate decision; earnings expected in the upcoming US session include Abott Laboratories, US Bancorp and Kinder Morgan.

Equities

- Consumer discretionary: Heineken [HEIA.NL] +2.0% (trading update), Bunzl plc [BNZL.UK] -23% (trading update; cuts outlook), Hays [HAS.UK] -1.5% (trading update).

- Industrials: Barratt Redrow [BDEV.UK] +1.5% (trading update; UK CPI data).

- Technology: ASML [ASML.NL] -5.0% (earnings, net bookings miss, tariff comments; US govt export restrictions on Nvidia H20 chips), Datagroup [D6H.DE] +31.5% (KKR reaches agreement to acquire Datagroup form €54/shr in cash).

- Materials: Antofagasta [ANTO.UK] -1.5% (production report), Rio Tinto [RIO.UK] -1.5% (production report).

Speakers

- Russia's upper house of parliament ratified Russia-Iran strategic partnership treaty.

- Iran Foreign Min Araghchi noted that conflicting US statements would not help nuclear talks.

- BOJ said to be planning to cut its fiscal 2025 growth forecast from current 1.1% level in quarterly report due on May 1st.

- China Foreign Ministry spokesperson reiterated stance that US should use dialogue not pressure or bullying to resolve disputes.

- China govt said to be open for talks with US on trade. Wants President Trump to reign in Cabinet members and show respect. Want US talks to address concerns on Taiwan and sanctions.

Currencies/fixed income

- USD began the session on soft footing as concerns about US tariffs and their economic implications persisted.

- GBP/USD at 1.3270 and unfazed by softer UK inflation data as the reading did little to materially shift the Bank of England's policy outlook. OIS now fully pricing a 25bps May BoE cut (was 90% priced before CPI), with the curve now pricing 86bp of easing by end-2025 (prior was 74bp).

- EUR/USD initially was edging back towards the 1.14 area with focus on Thurs ECB rate decision. However, report that China was willing to talk to the US on trade helped the greenback off its worst levels of the session. For Thus session ECB was widely expected to continue its easing and deliver a 25bps cut its key rate within the neutral range, Dealers note that language in the ECB statement would likely to maintain a data-dependent, meeting-by-meeting approach. Nonetheless markets expect ECB to cut rates at least in the next two meetings to take the deposit rate to 1.75%.

- USD/JPY moved off session lows of 142.04 to test 142.75 by mid-session on some trade talk optimism.

Economic data

- (SE) Sweden Mar PES Unemployment Rate: 3.7% v 3.8% prior.

- (UK) Mar CPI M/M: 0.3% v 0.4%e; Y/Y: 2.6% v 2.7%e; CPI Core Y/Y: 3.4% v 3.4%e; CPI Services Y/Y: 4.7% v 4.8%e; CPIH Y/Y: 3.4% v 3.5%e.

- (UK) Mar RPI M/M: 0.3% v 0.4%e; Y/Y: 3.2% v 3.2%e; RPI (ex-mortgage interest payments) Y/Y: 2.8% v 3.0% prior; Retail Price Index: 395.3 v 395.4e.

- (AT) Austria Mar Final CPI M/M: 0.2% v 0.2% prelim; Y/Y: 2.9% v 2.9% prelim.

- (CZ) Czech Mar PPI (Industrial) M/M: -0.3% v +0.1%e; Y/Y: -0.3% v 0.0%e.

- (EU) Euro Zone Feb ECB Current Account Balance: €34.3B v €40.3B prior.

- (IT) Italy Mar Final CPI M/M: 0.3% v 0.4% prelim; Y/Y: 1.9% v 2.0% prelim; CPI Index (ex-tobacco): # v 121.5e.

- (IT) Italy Mar Final CPI EU Harmonized M/M: 1.6% v 1.6% prelim; Y/Y: 2.1% v 2.1% prelim.

- (UK) Feb ONS House Price Index Y/Y: 5.4% v 4.9% prior.

- (IT) Italy Feb Current Account Balance: +€1.6B v -€3.9B prior.

- (PT) Portugal Feb Current Account Balance: €0.0B v €0.5B prior.

- (GR) Greece Feb Current Account Balance: -€2.5B v +€1.0B prior.

- (EU) Euro Zone Mar Final CPI Y/Y: 2.2% v 2.2% advance; CPI Core Y/Y: 2.4% v 2.4% advance; CPI M/M: 0.6% v 0.6% advance.

- (CY) Cyprus Mar CPI EU Harmonized M/M: 0.5% v 0.3% prior; Y/Y: 2.1% v 2.3% prior.

Fixed income issuance

- (IT) Italy Debt Agency (Tesoro) opened book to sell new 7-year BTP bond; guidance seen +14bps to 2031 BTP.

- (IT) Italy Debt Agency (Tesoro) opened book to sell new 30-year inflation-linked bonds (BTPei); guidance seen +38bps.

- (IN) India sold total INR190B vs. INR190B indicated in 3-month, 6-month and 12-month bills.

- (SE) Sweden sold total SEK17.5B vs. SEK17.5B indicated in 3-month and 6-month Bills.

- (UK) DMO sold £1.5B in 0.125% Jan 2028 Gilt via tender; Avg Yield: 3.631% v0.531 % prior; bid-to-cover: 3.84x v 2.20x prior.

Looking ahead

- (AR) Argentina Mar Budget Balance (ARS): No est v 1.18T prior.

- (AR) Argentina Mar UTDT Leading Indicator: No est v 2.3% prior.

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

- 05:30 (DE) Germany to sell combined €2.5B in 2052 and 2056 Bunds.

- 05:30 (PT) Portugal Debt Agency (IGPT) to sell 12-month Bills.

- 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays).

- 06:00 (IE) Ireland Feb Property Prices M/M: No est v 0.0% prior; Y/Y: No est v 8.1% prior.

- 06:00 (EU) EU Commission to sell 3-month, 6-month and 12-month Bills.

- 06:00 (RU) Russia to sell OFZ Bonds.

- 07:00 (US) MBA Mortgage Applications w/e Apr 11th: No est v +20.0% prior.

- 07:00 (ZA) South Africa Feb Retail Sales M/M: No est v 1.2% prior; Y/Y: 6.6%e v 7.0% prior.

- 08:00 (PL) Poland Mar CPI Core M/M: 0.3%e v 0.4% prior; Y/Y: 3.5%e v 3.6% prior.

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

- 08:30 (US) Mar Advance Retail Sales M/M: 1.3%e v 0.2% prior; Retail Sales (Ex Auto) M/M: 0.4%e v 0.3% prior; Retail Sales (Ex Auto and Gas): 0.6%e v 0.5% prior; Retail Sales (Control Group): 0.6%e v 1.0% prior.

- 08:30 (US) Apr New York Fed Services Business Activity: -12.4e v -19.3 prior.

- 09:15 (US) Mar Industrial Production M/M: -0.2%e v +0.7% prior; Capacity Utilization 77.9%e v 78.2% prior; Manufacturing Production: 0.2%e v 0.9% prior.

- 09:45 (CA) Bank of Canada (BOC) Interest Rate Decision: Expected to leave Interest Rates unchanged at 2.75%.

- 10:00 (US) Apr NAHB Housing Market Index: 38e v 39 prior.

- 10:00 (US) Feb Business Inventories: 0.2%e v 0.3% prior.

- 10:30 (US) Weekly DOE Oil Inventories.

- 11:30 (US) Treasury to sell 17-Week Bills.

- 12:00 (RU) Russia Mar PPI M/M: No est v 0.9% prior; Y/Y: No est v 9.8% prior.

- 12:00 (US) Fed's Hammack.

- 13:00 (US) Treasury to sell 20-Year Bond Reopening.

- 15:00 (AR) Argentina Mar Trade Balance: $0.6Be v $0.2B prior.

- 16:00 (US) Feb Total Net TIC Flows: No est v -$45.2B prior; Net Long-term TIC Flows: No est v -$48.8B prior.

- 18:45 (NZ) New Zealand Q1 CPI Q/Q: 0.8%e v 0.5% prior; Y/Y: 2.4%e v 2.2% prior.

- 18:45 (NZ) New Zealand Q1 CPI Tradeable Q/Q: 0.6%e v 0.3% prior; CPI Non-Tradeable Q/Q: 0.8%e v 0.7% prior.

- 19:00 (US) Fed's Schmid and Logan on Economy, Banking.

- 19:50 (JP) Japan Mar Trade Balance: ¥464.9Be v ¥590.5B prior (revised from ¥584.5B); Adj Trade Balance: -¥251.0Be v ¥182.3B prior; Exports Y/Y: 4.4%e v 11.4% prior; Imports Y/Y: +3.1%e v -0.7% prior.

- 20:30 (SG) Singapore Mar Non-Oil Domestic Exports M/M: No est v 2.6% prior; Y/Y: 11.9%e v 7.6% prior; Electronic Exports Y/Y: No est v 6.9% prior.

-21:00 (KR) Bank of Korea (BOK) Interest Rate Decision: Expected to leave 7-day Repo Rate unchanged at 2.75%.

- 21:00 (CN) China Mar Swift Global Payments (CNY): No est v 4.3% prior.

- 21:30 (AU) Australia Mar Employment Change: +40.0Ke v -52.8K prior; Unemployment Rate: 4.2%e v 4.1% prior; Full Time Employment Change: No est v -37.5K prior; Part Time Employment Change: No est v -17.0K prior; Participation Rate: 66.9%e v 66.8% prior.

- 23:00 (ID) Indonesia Feb External Debt: No est v $427.5B prior.

- 21:30 (JP) BOJ Board Nakagawa speech in Gunma.

- 23:30 (JP) Japan to sell 12-Month Bills.