US stocks slumped amid economic and tariff concerns - Newsquawk Asia-Pac Market Open

US stocks slumped at the start of the week and wiped out Friday's rally to hit six-month lows as concerns over the economy, US tariffs and retaliatory measures by others, sapped risk appetite. All major indices suffered firm losses with the Nasdaq the worst hit as it posted its largest daily loss since 2022 amid underperformance in tech and Communications.
USD mildly strengthened and the DXY briefly returned to above the 104.00 level amid the risk-off mood which spurred haven flows although further gains were capped amid a light calendar and with the Fed on a blackout period, while participants await Wednesday's CPI release and the US steel and aluminium tariff effective date.
Looking ahead, highlights include New Zealand Manufacturing Sales Volume, Australian Westpac Consumer Sentiment & NAB Business Confidence, Japanese Household Spending & GDP (2nd Reading), Supply from Australia.

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Highlights include New Zealand Manufacturing Sales Volume, Australian Westpac Consumer Sentiment & NAB Business Confidence, Japanese Household Spending & GDP (2nd Reading), Supply from Australia.
Click for the Newsquawk Week Ahead.

US TRADE

US stocks slumped at the start of the week and wiped out Friday's rally to hit six-month lows as concerns over the economy, US tariffs and retaliatory measures by others, sapped risk appetite. All major indices suffered firm losses with the Nasdaq the worst hit as it posted its largest daily loss since 2022 amid underperformance in tech and Communications.
SPX -2.7% at 5,615, NDX -3.81% at 19,431, DJI -2.08% at 41,912, RUT -2.72% at 2,019.
Click here for a detailed summary.

TARIFFS/TRADE

Alberta’s Premier said they will continue to supply energy to the US but need to develop Canadian pipelines to find new opportunities, while she said Canadian oil is currently not subject to US tariffs and production is not impacted, but producers need to prove compliance.
Canada's Ontario said it has imposed a 25% surcharge on electricity exports to New York, Michigan and Minnesota, while it added that any generator selling electricity to the US must add a 25% surcharge valued at USD 10/MWh and if the US escalates, Ontario will not hesitate to shut the electricity off completely.
EU Trade Commissioner Sefcovic said the US does not seem to be engaging in a trade deal with the EU, while he said the EU wants a constructive and positive relationship with the US and the door is always open for engagement.

NOTABLE HEADLINES

US White House Economic Advisor Hassett said there are many reasons to be bullish about the US economy despite some "blips".
NY Fed Survey of Consumer Expectations showed 1yr ahead expected inflation at 3.1% (prev. 3% in January), 3yr ahead expected inflation was unchanged at 3% and 5yr ahead expected inflation was unchanged at 3%.

USD mildly strengthened and the DXY briefly returned to above the 104.00 level amid the risk-off mood which spurred haven flows although further gains were capped amid a light calendar and with the Fed on a blackout period, while participants await Wednesday's CPI release and US steel and aluminium tariff effective date.
EUR softened with some brief headwinds seen following reports Green party officials recommended their lawmakers not to vote for the bill on spending plans.
GBP whipsawed back and forth of the 1.2900 level and ultimately weakened as the downbeat mood pressured cyclicals.
JPY strengthened on the day in which USD/JPY briefly dipped beneath the 147.00 handle amid softer US yields and haven flows.

T-notes gained and the curve bull steepened as economic growth fears continued to hit risk sentiment.

Oil prices wiped out the early gains and declined with crude pressured amid the global risk-off sentiment.
US Energy Secretary Wright said the US approved an extension to the Delfin LNG non-FTA export permit and the administration’s goal is to encourage more LNG exports. Furthermore, Wright said he is pleased with the action of OPEC thus far and it is possible that Trump will remove tariffs on Canadian oil in April. Wright also said he is looking at working with Congress on cancelling mandated sales from the oil reserve, as well as noted that working with Congress on the SPR takes time and refilling the reserve could take 5-7 years.
Russia's Kirishi oil refinery has not stopped operations after a drone attack on Saturday, according to Reuters citing sources.
Chile's Cochilco Copper Production (Jan, tonnes): Codelco -4% Y/Y to 102.7k, Escondida +12% at 109.4k, Collahuasi -46.4% Y/Y at 28k.

MIDDLE EAST

Israel is expected to give more time to mediators, led by Washington, which continues to submit settlement proposals through envoy Witkoff, according to Sky News Arabia.
Hamas said it is fully committed to the ceasefire agreement and the implementation of what was agreed upon and is ready to start negotiations immediately in the second phase, according to Al Jazeera.
Yemen's Houthis said they will take military measures as soon as the Gaza aid four-day deadline ends.

RUSSIA-UKRAINE

Kyiv will propose a truce in the air and sea during talks with Washington in Riyadh, according to Sky News Arabia.
US Secretary of State Rubio said he hopes the meeting with Ukrainians on Tuesday will go well and there are still more details to be worked out on a minerals deal with Ukraine, while he added the important thing is to leave with is a strong sense that Ukraine is prepared to do difficult things like the Russians will. Rubio separately commented that Ukraine must cede territory in any peace deal, according to NYT.
US envoy Witkoff said the US has never stopped providing defensive intelligence support to Ukraine and intelligence sharing with Ukraine will be addressed during this week's meeting, while he expects substantial progress on Ukraine this week.
UK PM Starmer's spokesperson said the PM has spoken to US President Trump ahead of Saudi talks, while UK officials have spoken to Ukraine officials over the weekend and remain committed to lasting peace.

OTHER

French President Macron said Moldova is facing increasingly blatant Russian threats.
Norway’s armed forces said two Norwegian F-35 jets shadowed two Russian military aircraft in international airspace in a routine operation on Monday.

NOTABLE HEADLINES

US President Trump may meet China President Xi in China as soon as April, according to SCMP. The report noted that US President Trump could visit China as early as next month, according to multiple diplomatic sources, as the American leader has appeared focused on hammering out a deal with Beijing since his return to the White House. It was separately reported that the US and China began discussions about a potential Trump-Xi summit for June, according to WSJ.

NOTABLE HEADLINES

ECB's Kazimir said inflation risks remain tilted to the upside and must remain open-minded on whether we cut rates or pause, while he added that geopolitical and trade tensions add another layer of unpredictability.
ECB's Nagel said he does not want to speculate what happens at the next ECB meeting and noted that the current environment requires analysis of data each time.
German Greens party officials recommended Green lawmakers not to vote for a bill regarding spending plans and want investment to go towards climate and country, while it was later reported that the Greens made their own proposal to loosen defence spending, according to Bloomberg.

DATA RECAP