Markets data released over the period 10 – 11 April 2025 has been mixed:
- UK Gross Domestic Product (GDP) is strong, against expectations, for February: 0.5% versus January (0.1% expected).
- Industrial production grew 1.5%, with upward revisions to past data.
- Growth strength is, in part, driven by trying to export in advance of tariff increases.
- Employment surveys for February were on the ‘soft’ side, suggesting firms are not wanting to commit to hiring while uncertainty is elevated.
- US equity markets had a weak session yesterday evening after the market, and at one stage S&P futures, were “only” 6% off Monday’s lows. They are now over 3% higher than this level, bringing the total rebound since Monday to nearly 10%.
- S&P Futures, however, are off over 7% since President Trump revealed the tariff chart at the Rose Garden presentation on 2 April – and, nearly 6% from the start of ‘Liberation Day’.
- Currency: The world market in local currency terms is down 12% since 18 February 2025 peak.
- UK gilt yields, have risen relative to the close on 10 April. Yields on conventional bonds are around 9 bps (2-year) to 10 bps (20-year) higher. Yields on ILG are 17 bps (2-year) to 11 bps (30-year) higher. US Treasuries look to be the driver of this, with yields having risen overnight.
- 1-year-inflation swaps are moving higher on the impact of tariffs, but the market looks to be pricing any increase in US inflation as short-term “transitory”, when inflation surged in 2021 during the Covid-19 pandemic.
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Source: Bloomberg, Office for National Statistics, Chicago Mercantile Exchange.
