Market drivers and catalysts
Equities: Extreme swings; tariff threats; Nasdaq resilient; European markets heavily hit; Asian rebound
Volatility: VIX spikes above 60; heightened caution persists; futures suggest partial rebound
Digital Assets: BTC resilience; mixed crypto stocks; selective altcoin recovery; market cautious
Currencies: USD softer on improved risk sentiment, but USDCNH poised at critical resistance
Fixed Income: Massive sell-off in US treasuries flips the script on
Commodities: A small comeback led by crude oil, copper and silver
Macro events: US Mar. NFIB Small Business survey, US 3-year Treasury Auction, New Zealand RBNZ Official Cash Rate
Macro data and headlines
Trump threatened to impose an additional 50% import tax on China today if it doesn't pull back from its plan to impose retaliatory levies on American goods. Overall, the mixed messaging from the President and his advisors have created confusion and volatility in markets, with investors struggling to understand his negotiating criteria and the lack of a streamlined process for considering exceptions to the tariffs.
China set the daily reference rate for the Chinese renminbi at 7.20, its weakest since 2023, suggesting a willingness to weaken the currency for the first time for this cycle as observers speculated on whether China will devalue the currency at all and if so, at a rapid or steady pace.
China has signaled a tougher approach to the trade war with the US, imposing blanket duties and export controls in response to Donald Trump's "reciprocal" tariffs. The Communist Party's official newspaper has declared Beijing is no longer "clinging to illusions" of striking a deal, and President Xi Jinping is ramping up efforts to bolster the domestic economy.
After a phone call between US President Trump and Japan’s PM Ishiba, Japan is set to get priority in trade talks with the US after the new Trump tariffs imposed a rate of 24% on Japanese imports. US Treasury Secretary Scott Bessent will lead the talks and the exchange rate of the Japanese yen is said to be on the agenda.
Macro calendar highlights (times in GMT)
1000 – US Mar. NFIB Small Business Optimism
1400 – Canada Mar. Ivey PMI.
1700 – US 3-year Treasury auction
1800 – US Fed’s Daly top speak on US Economic Outlook
0200 – New Zealand RBNZ Rate Announcement
Earnings events
Wednesday: Delta Airlines
Thursday: Tesco, Progressive Corporation
Friday: JP Morgan, Wells Fargo, Morgan Stanley, Blackrock, Bank of New York Mellon, Fastenal
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
US: U.S. stocks saw dramatic swings Monday, marking a third consecutive losing session amid tariff turmoil. The S&P 500 slipped -0.23%, entering bear market territory, while the Dow dropped -0.91%. Nasdaq bucked the trend slightly (+0.2%), buoyed by tech rebound—Nvidia (+3.5%), Amazon (+2.5%), Palantir (+5.2%). Markets briefly surged due to fake news of a 90-day tariff pause, quickly retracing after White House denial. Trump threatened an additional 50% tariff on China, intensifying volatility.
Europe: European markets plunged on Monday amid escalating tariff tensions. The DAX fell sharply by -4.1%, while Stoxx 50 and Stoxx 600 dropped -5.4% and -4.5%, respectively. Sectors heavily affected included utilities, financials, and industrials. Despite temporary relief from false tariff pause reports, selling intensified with Germany’s industrial data showing weakness. The CAC 40 (-4.8%) and FTSE 100 (-4.4%) also suffered major declines, marking multi-month lows.
UK: UK equities ended sharply lower, FTSE 100 dropping -4.4% to its lowest since March 2024. Melrose Industries and RELX led declines (-7.9%), while gold miner Fresnillo (+1.3%) provided slight resilience. UK markets remain vulnerable to ongoing trade uncertainties and retaliatory tariff threats.
Asia: Asian stocks recovered slightly on Tuesday after historic drops. Hong Kong's Hang Seng bounced back +2.5%, while Japan’s Nikkei surged nearly +7% driven by tech stocks and a weaker yen. South Korea's KOSPI rose +1.4%, snapping a losing streak, boosted by Samsung Electronics (+2.6%). Chinese equities edged higher as state-owned firms pledged market support amidst tariff tensions.
Volatility
VIX spiked significantly on Monday, reaching intraday highs above 60 before settling at 46.98 (+3.69%). Extreme swings were triggered by misinformation about U.S. tariffs, illustrating market anxiety. Despite futures signaling a potential rebound, implied volatility remains near historical peaks, indicating continued investor caution and heightened risk perception.
Digital Assets
Bitcoin edged higher (+0.6%) to $79,576, showing resilience amid tariff-induced market uncertainty. Ethereum (+2%) and Solana (+2.6%) also recovered, though XRP slipped slightly (-1.3%). Crypto-related stocks experienced mixed performance: Coinbase (-2%), MicroStrategy (-8.7%), and Marathon Digital (-0.4%) faced pressure while Cipher Mining rose (+6.2%), highlighting selective investor confidence.
Fixed Income
US treasuries suffered a massive sell-off yesterday, with long yields rising the most since the turbulence during the pandemic outbreak, a possible sign of large holders of treasuries, such as foreign holders, selling and repatriating their assets. The 30-year US treasury benchmark rose from lows near 4.30% to as high as 4.65% yesterday, while the 10-year benchmark lifted back to 4.17% from a low near 3.85% the prior day.
The US Treasury will auction USD 58 billion in 3-year notes today and is set to auction 10-year treasury notes tomorrow and 30-year T-bonds on Thursday.
US Junk Bond spreads came under further pressure, with a Bloomberg measure of the spread of high yield debt to US treasuries widening 22 basis points to 449 basis points. For perspective, this same measure peaked at 583 bps in 2022 and at 1100 bps at the worst of the pandemic.
Commodities
Commodities are staging a small comeback as global markets calmed down following a three-day sell-off that saw the Bloomberg Commodity Index slump by 8.25% to an early January low, led by those suffering the biggest setbacks, including crude oil, copper and silver.
WTI crude briefly dipped below USD 60 on Monday and into supply destruction territory, before staging what for now looks like a fragile comeback amid recession worries and rising OPEC+ production.
Gold trades around USD 3,000 after bouncing from key support near USD 2,950 on Monday as US 10-year Treasury yields worryingly surged higher by 25 basis points at one point. The risk of stagflation, de-dollarisation efforts by central banks and investors in general, and worries about the US debt situation remain a key focus for bullion bulls.
Silver and copper are both rebounding, supported by their relative cheapness following the latest slump, a potential Chinese stimulus response supporting demand combined with a tight supply outlook.
Currencies
- Bounce in risk sentiment is seeing the US dollar on its back foot across the board, especially versus pro-cyclical currencies like the AUD, CAD, etc.
USDCNH traded as high as 7.365, with all eyes on the thrice-tested (since 2022) 7.37 area that could indicate China is willing to allow its currency to weaken versus the US dollar.
For a global look at markets – go to Inspiration.
