[TrueZhuo Finance] US Extends Energy Sanctions on Iran Again; Meituan Expects Narrower Losses

Trump has once again delayed the energy strike on Iran, claiming that at Tehran's request, talks will continue for another ten days. Meituan expects losses to narrow this quarter. China is reportedly considering relaxing restrictions on bank shareholding by some major shareholders.

Overnight Highlights

The Nasdaq index of the U.S. stock market plunged more than 2% on Thursday, falling 10.7% from its record closing high set on October 29, confirming it has entered correction territory, while the S&P 500 and Dow Jones indices both fell more than 1%. Amid ongoing tensions in the Middle East, investor concerns about rising oil prices and persistent inflation intensified, pushing U.S. Treasury yields higher. The U.S. dollar rose against major currencies, as signs indicated that differences between the U.S. and Iran over a peace agreement remain vast, dashing hopes for an easing of Middle East tensions, reigniting risks of a prolonged energy shock, and boosting safe-haven demand. Oil prices closed higher, rebounding from the previous session's decline, as market hopes for a swift end to the Middle East war faded. Gold prices fell, pressured by a stronger dollar and rising oil prices, which sustained inflation worries and reinforced expectations that high interest rates will persist.

International News

Trump announced an extension of the suspension of strikes on Iranian energy facilities by 10 days until 8 p.m. ET on April 6, stating this move was at the request of the Iranian government and that negotiations are progressing very smoothly.

The Wall Street Journal, citing peace talk mediators, reported that Iran did not request the U.S. to extend the suspension of strikes on its energy facilities by ten days and has not yet given a final response to the U.S.'s 15-point plan aimed at ending the war.

U.S. Treasury Secretary Bessent said the U.S. insurance plan aimed at boosting shipping in the Strait of Hormuz will launch soon, with further increases in tanker traffic in the Gulf region expected in the coming days.

The U.S. said Houthi forces may attack commercial ships in the Bab el-Mandeb Strait at the entrance to the Red Sea. The Houthis stated they will militarily respond to the U.S. and Israel if developments require.

Axios reported: The Pentagon is developing military options for a "final blow" against Iran, which could include deploying ground troops and large-scale bombing.

Federal Reserve Governor Cook believes the Iran war is pushing inflation risks higher. Vice Chair Jefferson said rising energy prices could push up costs in other parts of the economy, but so far the increases have been manageable.

Fed Governor Milan said the central bank's balance sheet reduction process could last for years and needs to be conducted in multiple steps.

The OECD significantly raised inflation expectations for major global economies, forecasting U.S. inflation could reach 4.2% this year, and expects the European Central Bank to raise interest rates once in the second quarter.

The Economist: ECB President Lagarde said markets may be overly optimistic about the Iran situation, and the war's impact could exceed current imagination.

The Bundesbank downgraded its outlook for the German economy, expecting inflation to accelerate significantly in the near future.

U.S. continuing jobless claims for the week ending March 14 hit their lowest level in nearly two years, indicating the labor market continues to stabilize.

The U.S. 30-year mortgage rate hit a six-month high of 6.38%, dimming prospects for the spring sales season.

Memory chip stocks extended losses after Google (GOOG.US) published research that could make storage usage for AI development more efficient, potentially alleviating some chip shortages and possibly pushing prices lower.

Trump again criticized NATO's reluctance to intervene in the Iran war, saying NATO will pay a heavy price. Germany has reportedly begun studying weak links in the U.S. supply chain to prepare for Trump's next move against traditional U.S. allies.

Turkey's central bank reportedly sold and swapped about 60 tons of gold in the two weeks following the outbreak of the Iran war, further adding to downward pressure on gold prices.

The European Parliament voted on Thursday to approve the U.S.-EU trade agreement, which will eliminate tariffs on U.S. industrial goods and set a 15% tariff cap for most EU products in the U.S.

Apple Inc. (AAPL.US) is reportedly planning a strategic shift to strengthen the iPhone's position as an AI platform by opening Siri to other external AI assistants.

JPMorgan Chase (JPM.US) plans to launch a new fund investing in private credit, which will allow investors to redeem 7.5% of their shares quarterly and may offer a monthly redemption mechanism.

Hedge fund borrowing in the repo market has surged 154% cumulatively since 2022 due to increased leverage trading strategies.

Trump predicts strong momentum for Republicans in the midterm elections, but polls show Democrats are poised to take the House.

Surging oil prices pose a challenge to Thailand's finances, with the Thai baht among the worst-performing Asian currencies and its decline expected to continue.

Greater China News

China's State Administration for Market Regulation plans to strengthen supervision and enforcement of online food. The agency also held a fair competition symposium with companies including CATL (3750.HK), Didi (DIDIY.US), and Meituan (3690.HK), emphasizing deep rectification of "involution-style" competition.

Chinese Commerce Minister Wang Wentao met with U.S. Trade Representative Greer, calling for strengthened mutually beneficial cooperation and close communication between China and the U.S.

A European Parliament delegation visited China for the first time in eight years, with the chair of the Consumer Protection Committee set to meet representatives from Alibaba (BABA.US/9988.HK) and Shein.

Reuters: China is considering relaxing restrictions on bank shareholding by some major shareholders to broaden financing channels for commercial banks.

As Chinese authorities move to curb the food delivery price war, Meituan (3690.HK) founder Wang Xing expects the average loss per order for restaurant delivery to begin narrowing in the first quarter of this year.

Cathay Pacific (00293.HK) will raise its fuel surcharge by 34% from April 1 and conduct assessments every two weeks until the Middle East situation stabilizes.

The U.S. House Foreign Affairs Committee advanced a chip security bill requiring the Commerce Department to urge chip companies to take more measures to prevent AI technology from being smuggled to China.

Pop Mart, after two consecutive days of sharp declines, repurchased HK$599.7 million worth of shares on March 26 at prices between HK$148.4 and HK$157.8 per share.

China said imported Australian beef reached 50% of the annual quota on March 25, and starting from the third day (inclusive) after reaching this year's quota, an additional 55% tariff will be imposed on top of the current applicable tariff rate.

Commodity & Forex Markets

The Bloomberg Dollar Index rose as Trump expressed uncertainty about reaching a ceasefire.

Oil prices surged during New York trading but retreated at the Asian market open after Trump again postponed the deadline for striking Iranian energy facilities. Gold prices fell as investors focused on uncertainty over the prospects of U.S.-Iran talks.

Earnings & Economic Data Focus

U.S. March UoM Consumer Sentiment Index Final (Prev: 55.5, Forecast: 54)

U.S. March 1-Year Inflation Expectations Final (Prev: 3.40%, Forecast: 3.90%)

Source: Golden Horse Capital Management (Hong Kong) Limited

Author: Terry Chow

Proofreader: Penny Yang