Market drivers and catalysts
Equities: Trump tariffs trigger global equity selloff; Europe, Asia hit hard; autos, tech under pressure
Volatility: VIX futures surge +16.8%; curve inverts; tariffs main risk driver
Digital Assets: BTC +0.95%; $500M liquidations reversed; crypto stocks rebound; VanEck eyes BNB ETF
Currencies: USD weaker, JPY spikes higher in reaction to Trump tariff blitz
Fixed Income: US yields push to new cycle lows after Trump tariff blitz
Commodities: Cotton, crude and copper lead the slump on growth concerns, gold holds steady on haven demand
Macro events: US Weekly Initial Jobless Claims, US Mar. ISM Services
Saxo’s Quarterly Outlook has been published, and can be accessed on the SaxoTraderGO here or web here
Macro data and headlines
US President Trump unveiled a barrage of new tariffs on imports from US trading partners, starting with a baseline tariff percentage of 10%, but with differentiated reciprocal tariffs against most major US trading partners, including 34% tariff on China (This apparently on top of the 20% already announced), 24% on Japan, 20% on the EU, 31% on Switzerland and 10% on the UK (the baseline). The new baseline tariff of 10% will go into effect on April 5, with the reciprocal tariffs set for April 9. The market now awaits potential retaliatory measures from countries impacted by these tariffs.
The blitz of new tariffs from US President Trump were harsher than expected and drove a drop in the US dollar, strong rise in the Japanese yen, a fall in US treasury yields and a significant risk-off in equity markets.
ECB executive board member Isabel Schnabel, a German, spoke yesterday in favour of greater issuance of joint debt in the Euro area to boost the single euro currency’s role in the global economy. The euro responded strongly across the board yesterday before new US tariff announcements partially derailed its strength against other currencies, although it is still stronger versus the US dollar.
According to the US March ADP Employment Change survey, the US private sector added 155K jobs, exceeding expectations. The services sector gained 132K jobs, while trade/transportation/utilities lost 6K. The goods-producing sector added 24K jobs, but natural resources/mining lost 3K. Pay gains slowed to 4.6% for job-stayers and 6.5% for job-changers.
Macro calendar highlights (times in GMT)
0900 – Eurozone Feb. PPI
1000 – ECB’s Schnabel to speak
1130 – US Mar. Challenger Job Cuts
1130 – ECB Meeting Minutes
1230 – US Feb. Trade Balance
1230 – US Weekly Initial Jobless Claims
1400 – US Mar. ISM Services Index
1430 – EIA's Weekly Natural Gas Storage Change
1830 – US Fed’s Cook to speak on economic outlook
Earnings events
Today: Constellation Brands, Conagra Brands, Lamb Weston Holdings
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
US: Tariff shock derails sentiment post-close
Markets closed higher on Wednesday, with the S&P 500 +0.67%, Nasdaq +0.87%, and Dow +0.56%, ahead of President Trump’s post-bell tariff bombshell. Futures reversed sharply as he unveiled sweeping new levies: a 10% baseline tariff on all imports, plus steep reciprocal tariffs—54% on China, 24% on Japan, 20% on the EU, and more. Overnight, S&P 500 futures -3.0%, Nasdaq futures -3.5%. Shares of companies with global supply chains were hit hard: Apple -6.9%, Nike -7%, Gap -8.5%, Lululemon -7%, Five Below -14%, Dollar Tree -11%. Chipmakers like Nvidia and AMD dropped, as did industrial giants Caterpillar and Boeing. Trump’s decision to impose a 25% tariff on all imported autos effective today intensified fears of a global trade war and further rattled investor confidence.
Europe: European stocks brace for tariff retaliation
Equity markets in Europe look set for a rough session after Trump’s tariff package triggered global fallout. Euro Stoxx 50 futures -2%, FTSE 100 -1.7%, as the new US import duties include a 20% levy on EU goods and 25% on autos. Major benchmarks like the DAX (-0.66%) and Stoxx 600 (-0.6%) had already closed lower Wednesday, weighed down by healthcare and autos. German pharma giant Bayer -4%, and industrials also sold off. Brussels is preparing countermeasures, but market focus is now on how swiftly and forcefully Europe will retaliate. Eyes on final services PMIs later today.
Asia: Asia tumbles on “Liberation Day” tariffs
Asian equities slumped as US futures collapsed and global trade fears escalated. Nikkei -4%, Hang Seng -1.8%, and ASX 200 -1.1% were all in red. Japan bore the brunt of a 24% tariff on exports, especially autos—Toyota, Nissan, and Honda all -5% or more. Vietnam’s market posted its worst drop in 3 years, hit by a 46% US tariff. China was more resilient on stimulus hopes, with the Caixin Services PMI beating expectations (51.9). Safe havens like the yen surged, while the yuan hit a two-month low. Risk-off dominates Asian sentiment heading into the day.
Volatility
VIX futures spike as trade war fears explode
The VIX closed at 21.51 (-1.19%) on Wednesday, but post-close, markets flipped after Trump's tariff announcement. VIX futures soared +16.8% to 23.55, while VIX1D +33%, signaling panic hedging into today. The VIX futures curve re-inverted, with near-term contracts pricing in severe risk. S&P 500 and Nasdaq futures dropped over 3% overnight, driving a surge in demand for protection. Today’s volatility will hinge on reactions from major economies like the EU, China, and Japan. Although macro data is due (jobless claims, ISM, PMI), trade retaliation remains the top volatility driver.
Digital Assets
Crypto recovers as markets brace for retaliation
Bitcoin rebounded to $83,299 (+0.95%) after early Asia-session losses below $82K triggered $500M in liquidations. ETH +1.51%, XRP +1.56%, SOL +1.37% followed suit. Despite risk-off in equities, BTC held ground, buoyed by hopes of rate cuts and safe-haven narratives. Crypto-related equities surged in US trading: COIN +4.83%, MARA +4.9%, RIOT +6.37%, CIFR +7.72%, as investors rotated back into high-beta plays post-selloff. Meanwhile, stablecoin regulation advanced in the US, and VanEck filed for a BNB ETF, signaling rising institutional interest despite short-term trade war jitters.
Fixed Income
The Trump tariff announcements triggered a strong rally in US treasuries, as the US 2-year treasury benchmark slid to new lows since last October as the market eyes more Fed easing and the 10-year treasury benchmark likewise fell to new multi-month lows as investors eye a weaker US economy from the tariff disruptions. The 2-year yield trades this morning just below 3.80% after a low of 3.76% overnight and the 10-year yield dropped to 4.05% after trading as high as 4.23% in yesterday’s session.
Japanese bonds launched a furious rally in the wake of the US tariff announcements, with the 10-year JGB benchmark yield plunging 12 basis points to trad 1.35% overnight, and the 2-year fell some seven basis points to trade at 0.77%, marking a sharp flattening of the Japanese yield curve as the market eyes a weaker Japanese economy on the US tariff impacts.
Credit spreads on high yield US corporate bonds tightened sharply yesterday, with a Bloomberg measure of the spread on high yield bonds versus treasuries tightening 11 basis points. But risk sentiment dropped heavily as Trump announced the large reciprocal tariffs after the markets closed in the US yesterday, so developments bear watching today.
Commodities
Growth-dependent commodities—led by cotton, copper, and crude oil—declined following the announcement of Trump’s sweeping and, in some cases, harsher-than-expected reciprocal import tariffs. While certain commodities were exempt, traders remain concerned about the tariffs' negative economic impact, particularly in the U.S., which now faces the looming threat of stagflation.
Gold trades steady around $3135 after hitting a fresh record at $3167, supported by geopolitical and economic tensions as well as rising inflation driving down real yields in the US. However, a general rush by investors to deleverage amid rising volatility has limited gains and may potentially weigh on the metal in the short-term. Meanwhile, silver and platinum trade was sharply lower due to expectations of an economic slowdown dampening demand for these semi-industrious metals.
Currencies
The Trump tariff announcements triggered a sharp and significant yen rally as global yields plunged in their wake. This took USDJPY from above 150.00 yesterday to as low as 147.12 overnight, with the cycle low of 146.54 from early March suddenly in traders’ sights. The JPY was also stronger across the board.
The US dollar was weaker across the board on the Trump tariff announcements yesterday, possibly as the market sees the disruption for these new measures triggering a US recession and additional Fed rate cuts and a general lightening of the weight of US assets in portfolios.
The Euro rose above 1.0900 in EURUSD terms in the wake of the tariff announcements, but suffered a volatile session yesterday – first seeing significant broad strength on the ECB’s Schnabel speaking in favor of more joint EU debt to strengthen the euro, before Trump’s announcement of 20% reciprocal tariffs on EU imports erased much of the strengthening move.
CAD and MXN escaped further relative weakness versus the USD as Trump’s new tariff announcements failed to mention Canada or Mexico.
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