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Global Sentiment: Risk-on
Factors: US-China Trade Deal; India-Pakistan Tension

TODAY’S WATCHLIST
 - Eurogroup meetings
 - Japan March current account data 

THE BIG STORY
The United States and China concluded two days of trade negotiations in Geneva, resulting in an agreement focused on addressing the US goods trade deficit and easing bilateral tensions. This marked the first in-person meeting between senior economic officials from both sides since the Trump administration imposed high tariffs.

The White House issued a statement confirming the deal, with Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer calling the discussions productive. Greer noted that the agreement came together quickly. Talks were held at the residence of Switzerland’s UN ambassador, with Swiss officials acting as neutral hosts.

China’s Vice Premier He Lifeng stated that both sides reached consensus and agreed to establish a new consultation platform to handle trade and economic matters. However, no changes to existing tariffs were announced. U.S. tariffs on Chinese goods remain at 145%, while China’s tariffs on US products stand at 125%.

Greer said the deal aims to reduce the $1.2 trillion US global trade deficit. Officials said the talks addressed issues tied to the national emergency declared by President Trump. Further details are expected in a joint statement on Monday. White House adviser Kevin Hassett also noted that additional trade deals with other countries are under discussion.

DATA
China's producer prices fell 2.7% annually in April – the sharpest decline in six months – while consumer prices dropped for a third consecutive month, highlighting persistent deflationary pressures from its property crisis and Trump's trade war. Though the PPI contraction was slightly better than the 2.8% forecast, the data underscores how housing market strains and weak domestic demand are compounding external risks from US tariffs. Policymakers face mounting pressure to escalate stimulus as dual deflation risks intensify.

WHAT HAPPENED OVERNIGHT
US stocks closed flat on Friday but posted weekly losses as investors awaited US-China trade talks, with the S&P 500 down 0.47%, Nasdaq dropped 0.27%, and Dow fell 0.16%. Fed officials amplified Powell’s warnings about tariff risks, underscoring the economic stakes of the weekend negotiations. Wall Street stock futures jumped in early trade Monday as signs of progress in US-Chian trade talks boosted hopes a global recession might be avoided.

US Treasury yields saw muted moves in thin Friday trading, with the 10-year inching up 1.3 basis points to 4.386% while the 2-year dipped 0.8 basis points to 3.887% as markets awaited US-China negotiations. The parallel shift – 30-year yields also rose 1.3 basis points to 4.844%, reflects cautious positioning rather than conviction, with investors balancing Fed policy risks against potential trade breakthroughs.

The US dollar slipped on Friday as a US-UK trade deal sparked cautious optimism for broader tariff negotiations, though President Trump dismissed it as a blueprint for future agreements. The dollar index dipped 0.28% to 100.37, while the euro rose 0.25% to $1.1255. The greenback weakened 0.42% to 145.3 yen and 0.12% to 0.831 Swiss franc, while sterling climbed 0.45% to $1.3305.

Brent crude oil prices climbed over $1 on Friday, posting their first weekly gains since mid-April amid optimism ahead of US-China trade talks. US crude rose 1.85% to settle at $61.02 a barrel, while Brent gained 1.7% to close at $63.91. The gains reflected renewed hopes for demand recovery in the world's two largest oil-consuming nations.

Day’s Ledger
Economic Data

• Japan March current account data 

Corporate Actions

• Jan-Mar Earnings: Andhra Cements, Ather Energy, Bajaj Electricals, Bliss GVS Pharma, Carborundum Universal, DCW, Happiest Minds Technologies, Jai Balaji Industries, JM Financial, Jyothy Labs, Kewal Kiran Clothing, KRN Heat Exchanger and Refrigeration, Man Industries (India), Morepen Laboratories, PG Electroplast, Prudent Corporate Advisory Services, PVR INOX, Raymond Lifestyle, Raymond, RBZ Jewellers, Sagar Cements, Siyaram Silk Mills, Speciality Restaurants, SRF, Tata Steel, TD Power Systems, The Ugar Sugar Works, Thomas Cook  (India) , Tips Films, UPL, Usha Martin, Venky's (India), Zaggle Prepaid Ocean Services,   

Policy Events

• Eurogroup meetings
• BoE MPC member Mann speaks

TICKERS

• ACME SOLAR commenced generation from first 52.5 MW phase of 300 MW Sikar Solar Project in Rajasthan.
  ADANI POWER emerged as lowest bidder to supply 1,500 MW thermal power to Uttar Pradesh.
• BEML declared second interim dividend of ₹15/share for FY25. March quarter revenue rose 19% QoQ to ₹7.26 billion.
• MANAPPURAM FINANCE reported March quarter loss of ₹2.03 billion due to impairment surge to ₹9.19 billion..
• NTPC GREEN appointed Sarit Maheshwari as new CEO replacing Rajiv Gupta.
• RELIANCE POWER reported March quarter profit of ₹1.26 billion versus ₹3.98 billion loss last year.
• Sumitomo Mitsui Banking Corporation to acquire a 20% stake in YES BANK for ₹134.83 billion. Stake sale includes SBI (13.19%) and seven other banks including HDFC Bank, ICICI, and Kotak Mahindra Bank.
• SWIGGY net loss widened to ₹10.81 billion in March quarter, nearly double YoY.
• UNION BANK OF INDIA reported 51% YoY jump in March quarter net profit to ₹49.85 billion.

MUST READ

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• Murugappa Group 3-way split talks are back on track
• IPO, buyback hurdles hit Airtel Africa
• Centre likely to distribute 3 months' ration in one go to clear stocks
• US seeks greater India market access for its data centre companies
• Trump heads to the Middle East with oil, trade and nuclear ambitions on the table
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