The Overnight Report: You’re Fired?

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The bad news just keeps coming as far as markets are concerned, with new worries around the position of Jerome Powell, the most powerful and important global central bank head. ASX200 futures are pointing down.

World Overnight
SPI Overnight	7803.00	– 30.00	– 0.38%
S&P ASX 200	7819.10	+ 60.20	0.78%
S&P500	5158.20	– 124.50	– 2.36%
Nasdaq Comp	15870.90	– 415.55	– 2.55%
DJIA	38170.41	– 971.82	– 2.48%
S&P500 VIX	33.82	+ 4.17	14.06%
US 10-year yield	4.41	+ 0.07	1.66%
USD Index	98.13	– 1.05	– 1.06%
FTSE100	8275.66	+ 0.06	0.00%
DAX30	21205.86	– 105.16	– 0.49%

Good Morning,

US futures markets soured in Asian trade yesterday and continued into the US trading sesson with another round of media reports that Trump is looking at ways to remove Federal Reserve Chairman, Powell. 

What happened overnight: Extract NAB Markets Today

US markets sold off sharply on Monday as President Trump renewed his verbal assault on Fed Chair Powell. The first volley on Thursday had little market reaction, but Monday’s second barrage has seen an intensification of the sell America trade.

The S&P500 is down -2.4%, US 10yr yields are up 8.8bps to 4.41%, and the USD (DXY) is down -0.9%. Gold, the alternative hard asset, soared 2.8% to $3,422, while most currencies are higher against the dollar. Note while US markets were open, most European markets were closed for Easter Monday.

Why the violent reaction to President Trump’s latest verbal assaults on the Fed.

Two reasons: (1) Kevin Hassett, who is the Director of the National Economic Council, said on Friday Trump was studying whether he’s able to fire Fed Chair Powell. Hassett also distanced himself from his prior stance of advocating for an independent Fed during Trump 1.0. The significance of that pivot should be seen in the context of the prior director under Biden being former Fed Vice-Chair Lael Brainard; and (2) the Supreme Court is due to rule any day now on whether Trump has the authority to remove board members of two other independent agencies.

As for the offending tweet, Trump Truth Social: “Preemptive Cuts” in Interest Rates are being called for by many. With Energy Costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other “things” trending down, there is virtually No Inflation. With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. Europe has already “lowered” seven times. Powell has always been “To Late,” except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?” 

The sell America trade was in full flight on Monday, though moves may have been exacerbated with the Easter break and with Europe out.

Whether or not President Trump is legally able and willing to move against the US Fed, the jousting underscores the loss of US exceptionalism and the very real policy risk for investors. 

As for trade developments, the most important was China warning countries against making trade deals with the US that could hurt Beijing’s interests. The WSJ had reported earlier in April that the Trump administration planned to use trade talks with other countries to isolate China.

As for US trade negotiations so far, they are not going smoothly. Japan’s PM Ishiba told Parliament yesterday that Japan won’t just keep conceding to US demands to reach a deal over tariffs, and he launched a strong defence of barriers to agricultural imports. He added the government has no plan to terminate a trade deal struck with the US in 2019.

Meanwhile, US fees for Chinese-owned or operated ships docking at US ports is going ahead. It is estimated a surcharge of $1.9m will be imposed per US port for Chinese-made ships sailing under non-Chinese operators and $5.2m for Chinese-operated ships.

The first hard data is also starting to come in, reflecting the trade and tariff uncertainty. South Korean exports fell -5.2% y/y for the first 20 days of April, with falls to the US and China.

What’s happening in commodities markets: Extract from ANZ Bank Australian Morning Focus

Gold prices hit a record high of USD3,420/oz amid a renewed USD selloff, which fell to a three-year low following reports of Trump attempting to end Powell’s term early. 

This action could undermine the Federal Reserve’s credibility, destabilise the US economy and erode confidence in the USD. 

Gold attracted haven flows amid these developments, with ETF holdings rising by 13t last week and net speculative positions increasing by 4.8t. 

Switzerland’s exports to the US fell to 106t in March from a peak of 195t in January; while COMEX inventories are retreating, with a narrowing spread between COMEX futures and London spot. 

Industrial metal prices came under pressure due to increasing demand headwinds, despite falling exchange inventories. The ongoing trade tariffs turmoil impacted trade flows, with China reducing imports from the US. 

The increasing copper spot premium in the US led to a decline in scrap exports by more than -50% to 22kt, while concentrate exports dropped -38% to about 19kt. 

However, China’s domestic refined copper production remained elevated at 1.25mt in March, with total output rising 5% year-on-year to 3.54mt. 

Aluminium production was high at 3.7mt due to increased smelter profitability from falling alumina and coke prices. 

Iron ore prices rose 2% to USD 99.5/t as steel production increased by 4.6% to 93t in March despite government efforts to curb capacity. 

Falling coking coal and iron ore prices improved steel mill profitability, supporting production growth to 259t in Q1 2025. Steel product output was even stronger, up 8.3% year-on-year. 

Strong iron ore buying by steel mills and lower imports saw inventories decline sharply by -1.4mt to 124mt last week. 

Brent oil prices fell -3% to US$66/bbl amid growing concerns over oil demand due to the worsening trade war. 

Progress in talks between Washington and Tehran did not help. Market concerns increased following the release of China’s final trade data, showing it had substantially reduced commodity imports from the US while oil imports from Malaysia rose to a record high of 8.75mt in March, which is normally made up of Iranian or Venezuelan oil. 

Floating oil storage increased to 78.19mbbl as of 18 April, the highest since August last year. Speculators decreased their bullish Brent crude oil bets by -56,887 net-long positions to 98,951.

Corporate news in Australia

-A 19.99% stake in Transgrid is looking for a home with the Abu Dhabi Investment Authority’s stake on the market.

-Yancoal ((YAL)) has warned of an uncertain outlook for coal miners due to global trade issues.

-Investment banks are circling the co-founders of Chemist Warehouse holding worth more than $16bn of shares in Sigma Healthcare ((SIG)).

-Macquarie Group ((MQG)) is selling its public investment business in the US and European Union to Nomura in a $2.8bn deal.

On the calendar today:

-US Phil Fed non-manufacturing

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Spot Metals,Minerals & Energy Futures
Gold (oz)	3435.25	+ 93.90	2.81%
Silver (oz)	32.64	+ 0.10	0.29%
Copper (lb)	4.72	+ 0.02	0.32%
Aluminium (lb)	1.08	0.00	0.00%
Nickel (lb)	6.99	– 0.01	– 0.09%
Zinc (lb)	1.18	0.00	0.00%
West Texas Crude	62.69	– 1.62	– 2.52%
Brent Crude	66.54	– 1.31	– 1.93%
Iron Ore (t)	99.92	– 0.16	– 0.16%

The Australian share market over the past thirty days

Index	17 Apr 2025	Week To Date	Month To Date (Apr)	Quarter To Date (Apr-Jun)	Year To Date (2025)
S&P ASX 200 (ex-div)	7819.10	2.26%	-0.31%	-0.31%	-4.17%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
BOQ	Bank of Queensland	Upgrade to Equal-weight from Underweight	Morgan Stanley
GMD	Genesis Minerals	Downgrade to Hold from Buy	Shaw and Partners
NAN	Nanosonics	Downgrade to Sell from Hold	Bell Potter
PPT	Perpetual	Downgrade to Neutral from Buy	Citi
SHV	Select Harvests	Upgrade to Buy from Neutral	UBS

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)

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