Nobody Is Off The Hook

Daily Updates:

• You would be excused if the beginning of this week felt somewhat like Deja Vu to the week that preceded it.  
• Last Monday began with a fake social media post that President Trump was considering a 90 day pause on tariffs, setting off the biggest intraday rally in the S&P 500 since 2020. That rally lasted the best of 10 minutes before the White House denounced the post. 
• By Wednesday, however, Trump had indeed announced plans to pause tariffs for 90 days, and on Friday the S&P 500 closed +1.8%. 
• That mixed messaging was extended into from late last week into this week too:
• On Friday evening, Trump’s administration announced an exemption for an array of consumer electronic products such as smartphones, laptop computers,chipmaking equipment, and flat-screen TVs from the 145% tariffs imposed on China and 10% baseline tariff on all other nations. 
• According to Bloomberg those exemptions cover around $390B worth of imports into the US based on 2024 Census trade data, of which $101B came from China. 

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• However, within 48 hours Trump had taken to his social media platform to state “NOBODY is getting ‘off the hook’” and that “There was no Tariff ‘exception’ announced on Friday. These products are subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff ‘bucket’”. 
• Trump’s most recent message suggests that consumer electronics from most of the world are subject to 10% tariffs and 20% for those coming from China. It also signals that the products will likely be subject to their own sector-specific tariffs similar to the steel, aluminium or automotive tariffs Trump has imposed already. 
• Commerce Secretary Lutnick provided a similar message when speaking on ABC’s ‘This Week’ show on Sunday, where he said “What he’s [Trump] doing is he’s saying they’re exempt from the reciprocal tariffs” and that “all those products are going to come under semiconductors, and they’re going to have a special focus-type of tariff.” 

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• Currently trading at $84.5K, BTC is up 12% on the week. ETH spot price has, as we have often seen in this cycle, underperformed BTC since last week, up 8%.
• Since last Friday, implied volatility across all tenors has ticked up for BTC as longer-tenors have followed the front-end up, causing the term structure of volatility to be flat. 
• Alongside that, the BTC 25delta put-call skew ratio has recovered significantly over the week from -13% on April 7 to (just) -1.68% for the 7-day tenor. A similar recovery in skew can be seen in ETH too, which had held a significantly bearish skew towards puts throughout mid-to-late March and early April, and is now at -3%.
• ETH futures markets for 1 week expiries are still trading at a discount to spot, albeit that discount has narrowed since April 12 where the annualized yield was -6%. 

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• The 10Y US treasury yield has traded sideways for most of the day so far after 10Y treasuries sold off sharply over last week. That selloff saw the 10Y yield surge from 3.9% on April 4, a local bottom, by nearly 70bps to a peak of 4.56% on April 11 intraday. That selloff in long-end US treasuries has also been met with a -6.89% decline in the dollar strength index over the last month.

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• Following a USDC transfer from its main wallet, the Trump-backed project, World Liberty Financial (WLFI), acquired 4.89 million SEI tokens worth $775,000 on April 12. This puts WLFI’s total altcoin investment at approximately $347 million.
• May 7th stands as the target date for Ethereum’s Pectra upgrade following the successful Hoodi testnet launch and a call among core developers.
• MANTRA, the Layer 1 blockchain for RWAs, saw its OM token plummet from over $6.30 to as low as $0.43 within hours, wiping out an estimated $5 billion in market capitalisation. MANTRA denies any involvement in insider trading or rug pulls, claiming the crash was triggered by “reckless liquidations”.

This Week’s Calendar:

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Charts of the Day: