The Overnight News Roundup - May 2

May 02, 2025

PiQ and Zack Eiseman provide you with a consolidated roundup of the overnight news that matters most to markets.

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TRADE:

Risk on during APAC after China said it is assessing the possibility of trade talks with the US, the first sign since Trump hiked tariffs last month that negotiations could begin. China’s Commerce Ministry said that it had noted senior US officials repeatedly expressing their willingness to talk to Beijing about tariffs, and urged officials in Washington to show “sincerity” toward China. (BBG)
US Secretary of State Rubio said on Fox News that China wants to meet and talk on trade and discussions will come up soon. "Our Treasury Secretary Scott Bessent is involved in those efforts, and their talks will come up soon," he said, adding that there was a question about how much the US should buy from China going forward. (Fox News)
Japan's top economic negotiator, Akazawa, said that tariff negotiations with the US covered how Japan can expand trade, non-tariff measures and economic security cooperation. The two countries did not discuss FX and national security matters and Akazawa said Japan aims to hold the third round of discussions after the middle of this month. (RTRS)
Japan's huge U.S. Treasury holdings are among tools available for Tokyo in trade negotiations with the United States, Japanese Finance Minister Kato said. He added, "Whether we actually use that card, however, is a different question". (RTRS)
Japanese Finance Minister Kato said he did not discuss with the US FX target and framework to control FX moves, with no discussion whatsoever on where FX levels should be. Said he confirmed with US Treasury Sec. Bessent that FX moves should be set by markets and that excessive volatility is undesirable. (RTRS)
The Trump administration ended US duty-free access for low-value shipments from China and Hong Kong on Friday, removing the "de minimis" exemptions availed of by Shein, Temu and other e-commerce firms as well as traffickers of fentanyl and other illicit goods. (RTRS)
China has told its carmakers that it would like them to ensure at least a quarter of the chips in their vehicles are made in China as of this year, according to WSJ sources, which is described as difficult to attain with the proportion at 15% as of late 2024. (WSJ)
Some Chinese automakers recently held talks with Western chip companies, including Texas Instruments and NXP, about producing more chips for China locally, according to WSJ sources. (WSJ)
Apple said a majority of its devices shipped into the U.S. in the June quarter will originate in India and Vietnam, a move to allay investor concerns about the impact of tariffs on its operations. (WSJ)
Temu is abandoning the model centered around cheap Chinese imports that catapulted it to success in the US, aiming to sell only goods from local merchants to American consumers for the foreseeable future. (BBG)
More than half of major Japanese auto parts makers that expect higher costs due to Trump's tariffs are considering raising prices, a Nikkei survey has found. (Nikkei)
South Korea's chief tariffs negotiator and Finance Minister Choi Sang-mok resigned Thursday night, hit by political turmoil, leaving the country vulnerable in its trade talks with the US. (Nikkei)
India and the EU reaffirm commitment to conclude an ambitious FTA by the end of 2025 and deepen strategic trade ties. (Newsquawk)

MACRO:

Trump is expected to propose far-reaching cuts to federal environmental, renewable energy, education and foreign-aid programs in a budget blueprint that slashes nondefense discretionary spending by more than $160 billion, according to administration officials. (WSJ)
Trump plans to unveil his budget proposal for the 2026 fiscal year on Friday and send it to Congress, according to a White House official. (RTRS)
House Republicans plan to raise more than $15 billion in revenue through increasing US oil, gas and coal lease sales, as well as other measures, to help pay for Trump’s massive tax cut package. (BBG)
The US banking system’s reserves tumbled to the lowest in nearly four months in the week through April 30th amid banks reining in balance-sheet intensive activities and directing cash to the RRP facility. (BBG)
Trump ordered an end to taxpayer subsidies for National Public Radio and the Public Broadcasting Service, a longstanding goal of some Republicans who have accused the media outlets of bias. (BBG)
Japan's jobless rate in March rose to 2.5% from 2.4% in February. Economists' median forecast was for 2.4%. The jobs-to-applicants ratio inched up to 1.26 from 1.24 in February. The median forecast was 1.25. (RTRS)
Nigel Farage’s insurgent Reform UK bagged what should be one of Labour’s safest House of Commons seats after a dramatic by-election recount saw the result come down to just six votes. (Politico)
Australian retail sales rose only modestly in March and sales volumes were flat for the first three months of the year, suggesting consumer spending made no contribution to economic growth last quarter. (RTRS)
Australia producer prices for the March quarter rose 0.9% Q/Q (prev. +0.8%) and +3.7% Y/Y (prev. +3.7%). The ABS said the main contributor to rising costs was a lower Australian dollar, combined with rising property rents and education fees. (RTRS)
Australia's PM Albanese campaigned in his conservative opponent Peter Dutton's constituency on the final day before Saturday's election, with polls favouring the incumbent in a campaign overshadowed by Trump's volatile diplomacy. (RTRS)
Manufacturing activity across most of Asia contracted in April, with companies struggling with weaker demand and pausing new orders in the face of US President Donald Trump’s baseline 10% tariff, according to S&P's surveys. (BBG)
South Korea’s headline inflation remained flat in April, possibly paving the way for the central bank to loosen monetary policy further to support the sagging economy. (WSJ)

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GEOPOLITICS:

France and Poland are set to sign a wide-ranging treaty covering defence and economic matters in the latest move by European countries to deepen military ties in the face of Russia’s aggression and uncertainty over US security guarantees. (FT)
A Chinese Communist Party-linked group has mobilized volunteers to support an independent candidate ahead of Saturday's federal election in Australia, a video indicates, spurring allegations of foreign election interference. (Nikkei)

EQUITIES:

Apple traded lower after it narrowly beat estimates for the quarter. It guided sales in line with estimates but its margin guidance was soft. Apple trimmed its share buyback program by $10 billion, with CEO Tim Cook telling analysts that tariffs could add about $900 million in costs this quarter. (RTRS)
Amazon reported strong quarterly earnings that weren’t affected by new tariffs on Chinese imports, but the looming levies dimmed the company’s outlook, weighing on shares. Meanwhile, its Amazon Web Services saw quarterly sales grow beneath expectations. (WSJ)
Reddit shares ripped after it logged higher revenue and swung to a profit in the first quarter as advertising revenue rose on higher impressions and prices. The Co. also guided Revenue above forecasts. (WSJ)
Airbnb Inc. issued a weak outlook for the second quarter, following online travel peer Booking Holdings Inc. in blaming economic uncertainties for softer travel demand in the US, sending shares lower. (BBG)
Block shares fell after it posted a drop in first-quarter revenue and profit and cut its full-year guidance after the company noticed changes to consumer spending as a result of the macro environment. (WSJ)
Roku forecast second-quarter revenue below Wall Street estimates on Thursday, as customers pull back spending amid an uncertain market environment. (RTRS)
Amgen Inc. outperformed Wall Street’s quarterly profit estimates as it moves forward with plans to crack the multibillion-dollar market for novel weight-loss medicines. (BBG)
Strategy (formerly MicroStrategy) reported its fifth consecutive quarterly loss and announced a $21 billion equity offering. (RTRS)
Duolingo Inc. raised its full-year sales and profit outlook as artificial intelligence offerings drive users to its higher-priced subscriptions. (BBG)
Singaporean prosecutors secured eight more weeks to deepen a probe and potentially bring more charges against three men accused of fraud in shipping servers likely containing Nvidia Corp. chips banned from China. (BBG)
A judge ruled that Elon Musk can pursue fraud claims against OpenAI in a lawsuit filed last year. (BBG)
The DoJ filed a complaint alleging some of the biggest Medicare insurers paid kickbacks to brokers that sell such plans, seeking to grab market share and in some cases avoid enrollees with disabilities who might come with heavy health costs. (WSJ)
Canadian National Railway Co. kept its financial outlook for 2025 intact despite rising economic risks, but management acknowledged that uncertainty is leaving many customers in limbo. (BBG)
BASF reaffirmed its full-year earnings guidance but warned the outlook was fraught with high uncertainty because of U.S. tariffs and how other countries respond to them. (RTRS)
Shell Plc stuck to its plans for investor returns and capital spending, taking on extra debt to fill the gap in its cash flow stemming from the drop in oil prices. (BBG)
NatWest narrowed its income and returns targets for the year to the upper end of the guided range after it reported better-than-expected earnings for its first quarter. (WSJ)
Standard Chartered reported a rise in first-quarter net profit and maintained its guidance despite heightened uncertainty over tariffs. (WSJ)
Equinor is selling a 60% stake in a Brazilian oil field for about $3.50 billion, part of its effort to “high-grade” its international portfolio. (WSJ)
ING launched a $2.26 billion buyback and posted a smaller-than-feared decline in net profit for the first quarter. (WSJ)
Japanese trading house Mitsubishi Corp forecast a 26% drop in annual profit, citing lack of capital gains. (RTRS)
Samsung Electronics began early mass production of HBM3E 12-Hi products for NVIDIA around February, according to Korean media.