In today’s briefing:
- The Drill – The Commodity Onslaught (Still)
- Tariff Part II: Canada-Mexico Web Ensnares US; USTMA Projects Higher Volume
- US Travel Crashes Inflation In Mar-25
- From Rs.87 to Rs.85: Rupee’s Rebound Faces Tariff Test
- India Twin Deficit Watch: Fiscal Deficit to Shrink to 4% of GDP in FY26, CAD to 0.2%
- [ETP 2025/15] Tariff Pause Halts Slide in WTI and Henry Hub but U.S.-China Tensions Weigh on Prices
- CX Daily: Cargo Ships Are Racing Across Pacific as U.S.-China Tariff Deadline Looms
The Drill – The Commodity Onslaught (Still)
- Greetings from Copenhagen.
- We were just about to wrap up this week’s edition of The Drill when the news hit: tariffs are officially on pause for all trade partners except China.
- So that initial line—“risk sentiment was improving a tad this afternoon as markets likely see the worst headlines and data behind us”—can now be upgraded to markets partying like there’s no tomorrow.
Tariff Part II: Canada-Mexico Web Ensnares US; USTMA Projects Higher Volume
- Components crossing US–Mexico–Canada corridor face disruption
- Reshoring production to US would involve multi-year lead times
- USTMA expects U.S. tire shipments of 340.4 million units in 2025
US Travel Crashes Inflation In Mar-25
- Downside news from February’s US CPI print extended into a March crash with a 0.2pp undershoot at -0.05% m-o-m, not just because of a 2.4% m-o-m fall in energy prices.
- Hotels joined another sharp fall in airfares to drive the core inflation weakness. The late Easter appears responsible, similar to 2023, ahead of an April resurgence.
- Market participants are unusually unfazed by data that does not reveal the impact of substantial policy changes. Resilience should damp dovish hopes for cuts returning.
From Rs.87 to Rs.85: Rupee’s Rebound Faces Tariff Test
- INR rose from Rs.87.6 in Feb to Rs.85 in Apr 2025, but tariffs may halt this in June.
- Trade deficit narrowed to $56.5B in Mar, yet expected to hit $60 to 65B in June, pressuring INR.
- FPI inflows turned positive in Mar but may fade in June due to rate cuts and global uncertainty.
India Twin Deficit Watch: Fiscal Deficit to Shrink to 4% of GDP in FY26, CAD to 0.2%
- India’s exports (merchandise+invisible) topped US$1trn in 2024, up over 36-fold in 33 years. This has been crucial to bolstering the economy, and is likely to strengthen as Chinese exports recede.
- CAD likely moderated to 0.7% of GDP in FY25, and will shrink further in FY26, helped by lower oil prices and broad-based export recovery, as oil-refinery shutdowns end.
- Fiscal deficit was 4.4% of GDP in the 12months to Feb’25 (below official estimate of 4.8%). With tax revenue strong, the FY26 fiscal deficit should shrink to 4% of GDP.
[ETP 2025/15] Tariff Pause Halts Slide in WTI and Henry Hub but U.S.-China Tensions Weigh on Prices
- For the week ending 04/Apr, U.S. crude inventories rose by 2.6m barrels (vs. expectations of 2.2m rise), and gasoline stockpiles fell less than expected.
- US natural gas inventories rose by 57 Bcf for the week ending 04/Apr, missing analyst expectations of a 60 Bcf build. Inventories are 2.1% below the 5-year seasonal average.
- Trump cancelled BP and Shell’s licenses for gas projects in Venezuela. UBS lowered its price target for Chevron, Exxon, Occidental, Halliburton, and Schlumberger.
CX Daily: Cargo Ships Are Racing Across Pacific as U.S.-China Tariff Deadline Looms
- Tariffs /: Cargo ships are racing across Pacific as U.S.-China tariff deadline looms
- Retaliation /: Trade war escalates as China raises tariffs on U.S. goods to 84%
- Quant /In Depth: How China’s quant funds became AI incubators
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