Market drivers and catalysts
Equities: US-China tariffs escalate; tech stocks sharply lower; Europe rebounds on tariff pause optimism
Volatility: VIX surges; significant intraday volatility spikes; PPI and bank earnings critical
Digital Assets: Bitcoin volatility below S&P 500; Ethereum, Solana rise; crypto stocks struggle
Currencies: USD pummelled lower yesterday and overnight and seems now to serve as a broad risk-sentiment measure
Fixed Income: US treasury yields push toward top of range at long end of yield curve, suggesting strain on liquidity.
Commodities: Gold hits fresh record as US assets fall
Macro events: US March PPI, US preliminary April University of Michigan Sentiment, US Fed speakers
Macro data and headlines
The White House stated that US tariffs on China now total 145% after the latest hike. CNN reported the 125% "reciprocal" tariff announced by Trump adds to the existing 20% tariff. The Trump Administration may delist Chinese public company shares from US exchanges, with incoming SEC chair Paul Atkins likely to address this upon taking office, according to FBN's Gasparino.
President Trump’s chaotic tariff rollouts continue to undermine confidence in the US economy, and less than 24 hours after pausing reciprocal tariffs excluding China to prevent a meltdown in financial markets, selling resumed, hitting US stocks, bonds, and the US dollar as investors pull money out of US assets, with the CHF, EUR, JPY, and not least gold being the main beneficiaries for now. Gold posted a new record high in USD terms at 3,220 overnight.
US March CPI came in cooler than expected across the board, with headline numbers at -0.1% MoM and 2.4% YoY vs. +0.1% / +2.5% expected, respectively, and vs. 2.8% YoY in Feb.US Mar. CPI ex Food and Energy out at +0.1% MoM and 2.8% YoY vs. +0.3% / +3.0% expected, respectively and vs. +3.1% YoY in Feb.
Macro calendar highlights (times in GMT)
1230 – US Mar. PPI
1400 – US Preliminary Apr. University of Michigan Sentiment
1400 – US Fed’s Musalem to speak on US Economy, policy
1500 – US Fed’s Williams to speak on Outlook, Monetary Policy
Earnings events
Today: JP Morgan, Wells Fargo, Morgan Stanley, Blackrock, Bank of New York Mellon, Fastenal
Next week
Monday: Goldman Sachs
Tuesday: Johnson & Johnson, Bank of America
Wednesday: ASML, Abbot Laboratories, Progressive Corporation
Thursday: TSMC, UnitedHealth, Netflix, American Express, Blackstone, Charles Schwab, Marsh & McLennan, ABB
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
US: US stocks tumbled Thursday, reversing most gains from Wednesday’s rally amid intensified US-China trade tensions, with tariffs increasing to 145%. The S&P 500 lost 3.46%, Nasdaq slumped 4.31%, and Dow dropped over 1,000 points (-2.50%). Tech stocks led declines, notably Tesla (-10%), Nvidia, Apple, and Amazon, each falling over 6.5%. Energy stocks like Chevron and Exxon Mobil slid around 6% on weakening oil prices, exacerbating recession fears. Investors remain cautious ahead of today’s key bank earnings and US consumer sentiment data.
Europe: European equities surged Thursday as trade fears eased with the EU and US suspending mutual tariffs for 90 days, prompting strong rallies across sectors. STOXX 50 rose 4.4%, DAX jumped 4.53%, CAC 40 increased 4.25%, and FTSE 100 advanced 3.20%. Banks, technology, and industrials led gains, reflecting optimism towards resumed trade negotiations. Key movers included SAP (+7.21%), Deutsche Bank (+7.15%), and Barclays (+8.10%). Investors remain watchful of persistent global trade uncertainties affecting future sentiment.
UK: The FTSE 100 rallied strongly Thursday (+3.20%), recording its best day since 2020, propelled by tariff suspension optimism. Financial and commodity sectors benefited significantly, with Barclays (+7.99%) and Anglo American (+7.7%) leading gains. Tesco shares dropped 4.89% after cautious profit guidance amid competitive pressures in the grocery sector. Despite the strong rebound, market participants remain vigilant amid underlying trade and economic concerns.
Asia: Asian markets retreated Friday amid escalating US-China tariff tensions. Japan’s Nikkei slumped nearly 5% initially, as significant trade exposure weighed heavily, while Hong Kong’s Hang Seng dipped 0.5%, breaking its three-day positive streak. South Korea’s KOSPI lost 1.54%, dragged by technology and automotive stocks. Mainland Chinese indices showed resilience, bolstered by state fund support and stimulus discussions despite increased tariffs. Markets brace for China’s trade data release, further influencing sentiment.
Volatility
Volatility surged Thursday with VIX climbing sharply to close at 40.72 (+21.12%), driven by renewed trade fears and equity sell-offs. Short-term indicators spiked dramatically (VIX1D +12.04%, VIX9D +25.89%), signaling heightened market anxiety. Nasdaq 100 volatility rose significantly (+25%) amid severe tech-sector declines. Today's volatility outlook hinges on US PPI data and major financial institutions' earnings releases, critical for investor sentiment.
Digital Assets
Bitcoin extended gains (+1.85%) to above $81,000 as volatility fell below that of the S&P 500, highlighting crypto’s evolving role as a low-beta hedge against equities. Ethereum climbed modestly (+2.06%), with notable moves from Solana (+3.50%) driven by Janover’s significant acquisition. Crypto-related stocks mostly declined, impacted by broader equity market weakness. Investors closely monitor the $2.25 billion Bitcoin options expiry today, with a significant open interest around key strike levels.
Fixed Income
US yield curve steepening continued, with the 2-10 slope reaching 60 basis points for the first time since early 2022. Long-dated treasuries remain under pressure despite Wednesday’s 10-year US treasury auction, which saw record demand from direct bidders, who included foreign official institutions and are largely considered “buy and hold” hands in the treasury market. Yesterday’s 30-year auction also saw strong demand from direct bidders, but merely at the highest end of the range near 26%, completely unlike the unprecedented 89% of the 10-year auction.
The volatility of the US treasury market is unacceptable at some unknown degree of stress, so an official response could be forthcoming soon if US treasury yields continue to spike higher – watch for this response if the US 10-year spikes toward 5.0% (recent high has been 4.50% and the cycle high was in late 2023 at just above 5.0%)
US junk bond spreads widened slightly amidst widespread risk aversion yesterday, with a Bloomberg measure of the high yield spread to US treasuries widening 8 basis points to 434 basis points vs. the cycle high earlier this week of 453 basis points.
Commodities
The Bloomberg Commodity Index is heading for a small weekly gain, with losses among the pro-cyclicals in energy and industrial metal sectors being offset by surging gold and silver prices, while the agriculture sector trades mixed with notable gains in corn, cotton, and soybeans, and losses in coffee and sugar.
Gold climbed to a fresh record overnight at USD 3,220, a year-to-date gain of 23%, as the metal continues to attract demand from investors seeking shelter amid continued tariff-driven turmoil in global markets, raising concerns about a global recession and hopes for more monetary easing. The main source of support this past week has been the turmoil in the US bond market, raising concerns about financial stability.
Silver and platinum, two other semi-investment metals, have, despite supply tightness, struggled to keep up with gold for two major reasons. Central banks only buy gold, while the risk of recession continues to weigh given their uses as industrial metals.
Currencies
The US dollar came under intense pressure late yesterday and overnight, with an unusual degree of volatility in the Asian session as EURUSD spiked all the way to 1.1383 after trading near 1.1200 in the late US session yesterday, while USDJPY traded as low as 142.89 before rebounding to 143.65 as of this writing.
The USD weakness was most intense versus safe haven currencies CHF, EUR and JPY and appeared correlated with the direction in risk sentiment during the intense phase of its sell-off and may be a broad indicator now on risk sentiment, which picked up in early European trading as the
The USD action versus pro-cyclical currencies like GBP, CAD and AUD overnight was erratic, with new local highs in these currencies versus the US dollar before the USD recovered broadly by early European trading hours..
Long yields in the UK bear watching as risk indicator for sterling akin to the episode of fragility and systemic risk induced during the Truss mini-budget in late 2022. The 10-year gilt has traded as high as 4.80%, versus the cycle high of 4.90% in January.
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