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MORNING BID EUROPE - Counting the costs of tariff chaos
Wayne Cole gives us a look at what the future holds for European and global markets. Early Asian reactions to the mess of a U.S. Tariff Policy were to revive the sell America meme. The dollar and Wall Street futures both dropped. The Supreme Court has now struck down President Trump's emergency tariff policy. They basically said that he had been violating the law for over a year. Trump then holds a?media?conference in which he announces that a 10% tariff will be applied to all goods from Tuesday. He then announced on social media that the tariff would be increased to 15% immediately. This apparently caught some of his officials by surprise. White House posted on Friday a list of items that were exempted from the initial tariff rate of 10%. It's unclear if this will still be the case for the new rate. Trump's bill, which he is now using for the first ever time, prevents discrimination among countries. Therefore, everyone must get the 15%. This includes Russia and North Korea who were initially not included in the tariffs. This means that some countries like the UK and Australia will face higher tariffs while others, such as China, could see theirs fall dramatically. The European Commission has ruled out any changes to the deal between India and the U.S. The power lasts only?150 before Congress must extend it. This is something that Republican legislators will be reluctant to do, given the?unpopularity of tariffs in opinion polls. White?House officials claim that tariff rates won't change much, and that trade agreements already agreed upon will remain in place. It's not clear how this works, given that these deals were made under tariffs which no longer exist. Treasury Secretary Bessent threatened to embargo trading partners if they did not honor these agreements. Imagine the U.S. excluding itself from global trade. Would the U.S. Navy blockade Chinese port? Or European ports? It might be easier for the navy to blockade all U.S. port. There's also the rush to get refunds for the roughly $170 billion of now illegal tariffs that were paid. More than 1,800 lawsuits have already been filed at the US Court of International Trade. Any money that is reimbursed to the importers will likely not go to the consumers who paid the tariffs through higher prices. Due to the uncertainty, European stock futures have fallen 0.5%. S&P futures have dropped 0.8%. Nasdaq Futures are down 1%. Markets were already nervous ahead of Nvidia’s earnings on Wednesday. This will test the strength of the AI market. The world's largest company is expected to report a 71% increase in earnings per share for the fiscal fourth quarter, on revenues of $65,9 billion. Analysts expect an average?EPS for the upcoming fiscal year of $7.76. Estimates range from $6.28 up to $9.68. Options indicate that its?shares may move by at least 6 percent in either direction after the announcement. Market developments on Monday that may have a significant impact - Appearances of Christine Lagarde President of the European Central Bank, Alan Taylor MPC of Bank of England, Federal Reserve Board Governor Christopher Waller - Includes data from the Ifo survey in Germany, US factory orders and Dallas and Chicago Fed surveys
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Wall St futures dollar drops amid US tariff turmoil
Wall Street futures in Asia and the dollar fell on Monday, as confusion about U.S. trade tariffs prompted the "sell America's" trade. Meanwhile, the tech-diva Nvidia is set to release its results this week. This will test the confidence of the AI sector. Gold prices dropped and gold grew ahead of the next round of talks between the United States and Iran, which will take place in Geneva on Friday. The risk of U.S. strikes remains if there is no agreement. After the U.S. Supreme Court ruled against President Donald Trump's emergency duties, uncertainty grew. He announced a new rate of 10% on the rest, but then increased it to 15%. Rodrigo Catril is a senior FX Strategist at NAB. He said, "The tariff landscape has become more uncertain. Uncertainty is bad news for any market or economy." "Unless common sense prevails we could enter a circular procedure where new tariffs announced are then possibly overturned only to have new tariffs announced and?we do the same dance again." There was no clear indication of when the tariffs would come into effect, what would be excluded, or if every country would get a 15% tax. Several countries, such as the UK and Australia, had tariff rates of 10% under the old rules. However, many other Asian countries had higher rates. In a light trade, Asian markets showed mixed results. MSCI's broadest Asia-Pacific index outside Japan rose 0.8%. The Nikkei closed for the holiday, but futures fell 1.0% to 56,605 against a close cash of 56,825. South Korea's bull run was extended by a 1.2% rise after a 5.5% jump last week. Taiwan rose by 1.2%, reaching a new record high. NVIDIA to test AI Mettle In Europe, EUROSTOXX Futures and DAX Futures both eased by 0.5% while FTSE Futures declined by 0.1%. S&P 500 and Nasdaq Futures both fell by 0.7% ahead of Nvidia's earnings, which will be a big deal since the tech giant makes up almost 8% in the S&P 500. Estimates range from $6.28 up to $9.68. Options suggest that its shares could move at least 6% either way on the announcement. The tariff news had a negative impact on the Treasury market, as it increased the risk that the U.S. Government would be forced to refund around $170 billion of revenue. On paper, this would increase the fiscal deficit by half a point, or 6.6%, of GDP. Cash Treasuries did not trade in Japan due to the holiday, but 10-year notes futures were down 2 ticks. Mixed data had also pushed the market in two directions, with the economic growth falling short of forecasts for the December quarter but core inflation rising. The probability of the Federal Reserve cutting rates in June dropped to 52% from 60% a few weeks ago. This has led to a stronger dollar for the week. The dollar was under pressure on Monday amid speculation that the tariff chaos could cause investors to lose confidence in U.S. assets. The dollar lost 0.6% against the Japanese yen, reaching 154.06, and the euro gained 0.4% to $1.1826. The dollar also lost 0.6% against the Swiss franc, falling to 0.7716. Meanwhile, Bitcoin's selling spread fell by 4.6% to $64,478. Gold gained 1.0% on the commodity markets as a result of a bid for safe havens. Silver rose 3.2% to $87.25 an ounce after a nearly 8% increase on Friday. Oil prices are choppy and have eroded some of the gains from last week, when Trump stated that the U.S. military would be able to strike specific targets within Iran if there was no nuclear agreement. Brent crude fell by 1.1%, to $70.94 per barrel. U.S. crude dropped 1.2%, to $65.71 a barrel. (Reporting and editing by Lincoln Feast; Reporting by Wayne Cole)
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Wall St futures dollar drops amid US tariff turmoil
Wall Street futures, and the dollar, fell in Asia on Monday as confusion over U.S. Tariffs revived "sell America", while the tech-diva Nvidia's results this week will test the confidence of the AI sector. Gold prices rose and oil prices eased as the world prepares for another round of negotiations between the United States and Iran, which will take place in Geneva on Friday. The risk of U.S. strikes remains if no deal is reached. After the U.S. Supreme Court ruled against President Donald Trump's emergency duties, uncertainty loomed. He announced a new rate of 10% on the rest, but then raised it to 15%. "The tariff landscape has become more uncertain, and uncertainty is bad news for any market or economy," said Rodrigo Catril. He is a senior FX strategist with NAB. "If common sense does not prevail, we may be in a circle where we announce new tariffs, which are then overturned and new ones announced. Then we repeat the dance." There was no clear indication of when the tariffs would come into effect, what would be excluded, or if every country would get a 15% tax. The UK, Australia and other countries had tariffs of?10% under the old rules. However, many Asian countries had rates higher than that. In light trading, Asian markets showed mixed results. MSCI's broadest Asia-Pacific share index outside Japan rose 0.8%. The?Nikkei 225 closed for the holiday, but futures fell 1.0% to 56,605 against a close in cash of 56,825. South Korea's bullish run was extended by a 1.2% increase, after a 5.5% jump last week. Taiwan rose by 1.2%, reaching a new record high. NVIDIA to test AI Mettle In Europe, EUROSTOXX50 futures and DAX Futures both eased by 0.5% while FTSE Futures declined by 0.1%. S&P 500 and Nasdaq Futures both fell by 0.7% ahead of Nvidia's earnings, which will be a big deal since the tech giant makes up almost 8% in the S&P 500. Estimates range from $6.28 up to $9.68. Options suggest that its shares may?shift at least 6% either way on the announcement. The news of the tariffs had a negative impact on the Treasury market, as it increased the risk that the U.S. Government would be forced to refund around $170 billion worth of revenue. On paper, such a result would increase the fiscal deficit to 6.6% of GDP, or a?half-point. Cash Treasuries did not trade in Japan due to the holiday, but 10-year notes futures were down 2 ticks. Mixed data also caused the market to be pushed in two directions. The December quarter's economic growth was far below expectations, while core inflation surprised on the high end. The probability of the Federal Reserve cutting rates in June dropped to 52% from 60% a few weeks ago. This had led to the dollar strengthening on the week. The dollar was under pressure on Monday amid speculation that the tariffs chaos could cause investors to lose confidence in U.S. assets. The dollar lost 0.6% against the Japanese yen, reaching 154.06, and the euro gained 0.4% to $1.1826. The dollar fell?0.6% against the Swiss Franc, to 0.7716. Meanwhile,?the spread for selling Bitcoin dropped 4.6% and reached $64,478. Gold gained 1.0% on the commodity markets as a result of a bid for safe havens. Silver rose 3.2% to $87.25 an ounce after climbing nearly 8% on Friday. Oil prices are choppy and have eroded some of the gains from last week, when Trump stated that the U.S. military would be able to strike specific targets within Iran if there was no nuclear agreement. Brent crude fell by 1.1%, to $70.94 per barrel. U.S. crude dropped 1.2%, to $65.71 a barrel. (Reporting and editing by Lincoln Feast; Reporting by Wayne Cole)
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The US tariffs are causing new uncertainty about oil prices after the Iran nuclear talks.
Oil prices fell?1%?on Monday as the U.S., Iran, and other countries headed to a third round nuclear talks. This eased concerns over a possible conflict. Meanwhile, President Donald Trump's new tariffs created uncertainty about global growth and fuel consumption. Brent crude futures fell 75?cents or 1.05% to $71.01 a barge by 0055 GMT, while U.S. West Texas intermediate crude?futures dropped 74?cents or 1.11%, and were now at $65.74 a barge. Trump announced on Saturday that he will increase a temporary tariff on U.S. Imports from All Countries from 10% to 15%, the maximum allowed by law. This is after the U.S. Supreme Court ruled against his previous tariff program. Tony Sycamore, an analyst at IG Markets, said that the tariff 'news' over the weekend has resulted in some risks aversion flows today. This can be seen in the prices of gold and U.S. stock futures. It is also weighing down on the crude oil rate. The decision to impose tariffs offset the growing concern about a possible military conflict between America and Iran, which drove Brent and WTI up by more than 5% in price last week. Oman's foreign minister Badr Albusaidi announced?on Sunday that Iran and the U.S. would hold a third round?of?nuclear discussions on Thursday at Geneva. Sycamore stated that the announcement confirmed his belief that Iran and the U.S. are engaged in a diplomatic cat-and-mouse game. Sycamore stated that "I do not believe the U.S. is interested in attacking?Iran due to the risks of regional destabilisation as well as voter discontent before the November midterms." A senior Iranian official said that Iran had 'indicated' it was willing to make concessions in its nuclear program for the lifting sanctions and recognition of Iran's right to enrich uranium. (Reporting and editing by Florence Tan, Jamie Freed and SonaliPaul)
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Dollar slips as Asia shares are hesitant
Investors waited on Monday for clarity about U.S. Tariffs. Meanwhile, the tech-diva Nvidia's results this week will test the confidence of the AI industry. The oil prices fell ahead of the next round of "talks" between the United States of America and Iran, which are scheduled to take place in Geneva on the Thursday. If a deal cannot be reached, the United States could launch military strikes. After the U.S. Supreme Court ruled against President Donald Trump's emergency duties, confusion grew. He announced a new 10% tariff on the rest, but then raised it to 15%. Rodrigo Catril is a senior FX Strategist at NAB. He said, "The tariff landscape has become more uncertain. Uncertainty is bad news for any economy or market." "Unless commonsense prevails, it is possible that we will enter a process in which new tariffs announced are then potentially reversed, before new tariffs announced and the whole dance repeated." There was no clear indication of when the tariffs would come into effect, what would be excluded and whether every country would receive a 15% tax. Some countries, such as the UK and Australia had tariff rates of 10% under the old rules. However, many other Asian countries had higher rates. MSCI's broadest Asia-Pacific share index outside Japan increased 0.5% during light trading. Japan's Nikkei closed for the holiday, but futures were traded at 56970?versus a cash closing of 56825. South Korea continued its bull run by gaining another 2.0% after already jumping 5.5% to new highs last week. NVIDIA WILL TEST AI MOOD S&P 500 Futures fell by 0.3%, and Nasdaq Futures by 0.4% before earnings from Nvidia. This is bound to make waves as the tech giant makes up almost 8% in the S&P 500 Index. Estimates range from $6.28 up to $9.68 for the world's most valued company. Options suggest that its shares may move by at least 6 percent in either direction after the announcement. The tariff news had a negative impact on the treasury market, as it increased the risk that the U.S. Government would be forced to refund around $170 billion of revenue. On paper, such a result would increase the fiscal deficit of around 6.6%?of GDP by a half-point. Cash Treasuries did not trade in Japan due to the holiday, but 10-year notes futures fell 2 ticks. Mixed data also caused the market to be 'pulled in two directions,' with the economic growth falling short of forecasts for the December quarter but core inflation being higher than expected. The probability of the Federal Reserve cutting rates in June dropped to 52% from 60% a few weeks ago. This resulted in the dollar being firmer for the week. The dollar suffered early Monday amid speculation that the turmoil over U.S. Trade Policy could reinforce the theme of "sell America", which has been evident on the markets for the past few months. The dollar slipped 0.4% against the Japanese yen, to 154.36. Meanwhile, the euro rose 0.4% to $1.1826. The dollar fell 0.5% against the Swiss franc, to 0.7718. Gold gained a safe haven bid and rose 0.8% on commodity markets to $5,143 per ounce. Silver rose 2%, to $86.24 an ounce after a Friday gain of almost 8%. The oil prices are choppy after gaining last week when Trump announced that the U.S. military would be able to strike specific targets inside Iran if there was no nuclear agreement. Brent crude oil fell 0.6% to $71.29 per barrel while U.S. crude dropped 0.8% to $65.95. (Reporting and editing by Lincoln Feast; Reporting by Wayne Cole)
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Indonesia Stock Exchange to release $11 billion in shares amid global scrutiny
According to an IDX official and an analysis of publicly available data, nearly one third of the companies listed on 'the Indonesia Stock Exchange', including its largest listings, could be affected by capital markets reforms promised by Jakarta. This could potentially unleash over $11 billion of new share supply. Indonesia has announced a number of capital market reforms after index provider MSCI warned in late January that the country could be downgraded to frontier status by May due to the opacity on the market, which'may have enabled price manipulation. The plan includes a key component of raising the minimum level of free float for listed companies from 7.5% to 15%. According to IDX's assessment of the end of 2025, 267 of the over 900 companies listed on IDX would need to issue new shares, sell some of their holdings or buy back equity in order to go private. IDX director I Gede Nyoman Yetna stated that if no company chose to delist they would be required to offer the public a total of 187 trillion Rupiah worth ($11.08 billion). Liza Camelia Suryanata is the head of research for Kiwoom Sekuritas Indonesia. She said that if the increase in free float of 15% was properly designed, it could be a turning point to improve the quality and attractiveness of Indonesia’s capital market. She said that short-term volatility could undermine the confidence in this reform. Since the beginning of time, exchanges have struggled to find ways to promote trading in tightly held stocks. A series of corporate governance reforms in Japan, such as the requirement that companies maintain a minimum of 35% free float has helped to boost the market and attract foreign investors. Analyzed publicly available data in order to determine which Indonesian firms would be most affected. The Top 5 The top company on the list by market capitalisation is Indonesian giant Barito Renewables Energy. According to publicly available data, the company owned by Indonesian billionaire PrajogoPangestu will need to sell shares worth more than $1.8billion to reach the 15% threshold. Other names on the list include Bank Permata whose majority shareholder could be Bangkok?Bank. This bank would have to issue new shares worth around $450 millions, and Hanjaya Mandala Sampoerna cigarette manufacturer, controlled by U.S. cigarette giant Philip Morris International. Its value is around $420million. Bank Syariah Indonesia, the state lender, will need to issue shares worth $350 million, while Lim Hariyanto, an Indonesian nickel tycoon, will need to raise $230 million through secondary offerings. The companies have not responded to the request for comments. Hasan Fawzi, interim chief capital markets supervisor for the Financial Services Authority in Indonesia (OJK), has said that companies may be given up to three years of transition time. However, exact details are still pending. The Big Challenge Analysts warn that the oversupply of products could have a significant impact on valuations. The increase in free float was "good for?transparency', but can our market cope with it? Will investor demand increase as well? One stock trader who refused to be named because he was not authorized to speak with media lamented this. Gilman Pradana nugraha, executive Director?of Indonesian Issuers Association, stated that regulators must be aware of the fact that not all companies will be ready right away. "Adjusting the free float isn't just about technical corporate actions, but it also involves our strategy for managing valuation and stock price stability," said he. Gilman stated that a timeline too short could potentially lead to unhealthy sales pressure. CREATING DEMAND The warning from MSCI has already caused some international investors reduce their exposure to Indonesian stocks. Confidence in the bond and money market of Indonesia is also declining due to concerns about fiscal health and independence of the central bank. To absorb the additional supply of?shares, the authorities plan to double the equity investment limit for insurance companies and pension funds from 10% to 20%. Indonesia's social insurance fund BPJS Ketenagakerjaan, with over $53 billion of assets, and the sovereign wealth fund Danantara, which has pledged to purchase stocks, could also provide support. Retail investors could also demand the product. Retail transactions accounted for half of the daily average trading volume of 18 trillion rupiah in 2025. Bernadus Wijaya is the chief executive officer of brokerage Sucor Sekuritas. He said that if MSCI maintains Indonesia's status as an "emerging markets" in May, then there will be demand for it from returning foreign investors. Beyond Free FLOat Some analysts, however, said that the overall quality of market reforms would be closely monitored, rather than just a higher level of free-float. This is especially true with Indonesia's stock-frying, or "gorenggorengsaham", which is used to boost prices. Analysts also warn that ownership of certain firms may remain concentrated even with a larger free float. $1 = 16,885,0000 rupiah (Reporting and editing by Gibran Peshimam, Kim Coghill and Gayatri Sulaiman)
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Ampol, Australia's refinery company, beats profit expectations on the strength of its margins
Ampol, Australia's largest?fuel retailer, reported a better-than expected annual profit? on Monday. This was driven by robust refiner margins at its lytton refinery in Queensland and a strong performance of its convenience retail operations. The refinery returned to profitability in fiscal year 2025 as a result of the Lytton refinery's margins, which rose by 46%, to $10.34 a barrel. This was due to global refinery failures and additional sanctions against?Russia. Fuel & Infrastructure, including its Lytton refinery business, reported full year operating earnings of A$405.6 (287.04 millions), which is more than double what it earned last year. Despite lower tobacco sales, its Convenience Retail division saw its annual operating earnings increase by about 5%, to A$373.7 millions. The fuel retailer reported a full-year net loss after tax of A$429.2 on a replacement cost basis. This was a little higher than Visible Alpha's consensus of A$428.5 and last year’s A$234.8. Ampol announced a final dividend per share of 60 Australian cents, which is?higher? than the 5 Australian cents declared last year.
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Verona protests ahead of Olympics closing ceremony
The protest was against the housing costs, and the environmental concerns associated with the Winter Games. The "Olympics?" rally was organized by university groups and associations that oppose hosting an event they say disrupts forests, pours concrete onto fragile land and deepens social inequality. The rally, "Olympics? "We're here to protect our territory against speculation...and from the impossible cost of attending events," Giannina, a 76 year old activist said. Tickets were priced between 950 euros and 2,900 euros. The ceremony began at 8:30 pm (1930 GMT), inside Verona’s ancient Roman Arena. The banner said: "Fewer Games, more homes." Francesca (34), who traveled from Vicenza about 60 km away, claimed that the landscape was "defaced" by new Olympic structures. She said, "They built concrete monsters like the bobsleigh tracks which will serve no use." "Public money was wasted, which could have been spent on hydrogeological safety or housing plans." Some protesters waved Palestinian flags while wearing keffiyeh scarfs. Protesters marched from the 16th century Porta Palio up to the 19th century Arsenal Square for about two hours. They asked unsuccessfully to be let inside the'red zone' at the closest point. Before the march moved on, activists painted in large letters the words "FIVE CIRCLE, A THREE HUNDRED DEBTS" on the road. Verona mayor Damiano Tomasi stated that high-profile events like the Olympics are always at risk of people trying to take advantage of the situation. It is therefore appropriate to "deploy an increased level of security." On the first day of these Games, a?much bigger demonstration -- attracting nearly?10,000 -- was held in Milan. It later became violent. $1 = 0.8482 Euros (Reporting and writing by Emilio Parodi, Editing by Ed Osmond & Alison Williams).
Goldman Sachs increases oil price forecasts for Q4 2026
Goldman Sachs has raised their Brent and 'West Texas Intermediate crude' forecasts for the fourth quarter 2026 by $6 each, to $60 and $56 respectively, citing lower than expected OECD stocks. However, it still assumes that there will be no disruption in supply due to Iran and continues to maintain its view on a 2026 excess.
In a Sunday note, the 'bank stated that it expected OPEC+ would begin to gradually increase?production during the second quarter 2026 due to the fact that OECD inventories had not yet built.
The bank's 2026 forecast of a surplus of 2.3 million barrels a day (bpd) was maintained, assuming that there would be no major disruptions in supply and that Russia-Ukraine will not reach peace.
The bank's 2026 surplus is a result of a 0.2 million bpd downward revision to the supply and demand due to softer growth in Asia.
Goldman expects that the downside risk for Brent will be $5 and for WTI $8 in the fourth quarter of 2026, depending on whether sanctions relief for Iran or Russia could accelerate landed stock building and increase supply?in the long term.
The firm expects Brent and WTI prices to be $65 and $60 respectively in 2027, and to rise to $70 & $66 by December 2027 due to a slowdown in supply growth and solid demand. (Reporting and editing by Thomas Derpinghaus in Bengaluru)
(source: Reuters)