Headlines:
Markets:
- CHF leads, GBP lags on the day
- European equities lower; S&P 500 futures down 2.6%
- US 10-year yields down 1.6 bps to 3.975%
- Gold down 0.3% at $3,028.43
- WTI crude down 2.3% to $60.56
- Bitcoin down 2.8% to $76,591
The session started with full-on risk aversion as Asia markets were feeling the heat, unable to find any shelter from the impact of Trump’s tariffs.
Japan’s Nikkei index closed down by nearly 8% and even with some help from the plunge protection team, Chinese benchmark indices closed down by over 7%. The Hang Seng was the one beaten up brutally, closing down by over 13% on the day.
That kept the market mood in a very poor state going into European trading, where regional indices also cratered at the open. The DAX opened down by roughly 9% in erasing its year-to-date gains. That comes as US futures also held lower by a little over 4%.
In FX, USD/JPY also retreated closer towards 145.00 as 10-year yields in the US were marked down to around 3.90%.
The dollar was mixed as it held gains against the commodity currencies and sterling, while keeping lower against the euro and franc. USD/CHF was a big mover, falling to 0.8450 at the lows earlier in the day.
All this before a recovery in the past two hours, driven by a couple of headlines.
First, we continue to see a potential break in the ranks as Elon Musk seems to be anti-tariffs in what looks to be an attempt to now salvage his dying reputation. Then, Italy suggested that the EU might look into delaying counter-tariffs while other members said that they may look to non-tariff measures in hitting back at Trump.
Adding to that then was a potentially misconstrued headline involving JP Morgan CEO, Jamie Dimon’s annual letter to shareholders. The headline on the wires quotes Dimon in saying that “tariff policy issues should be resolved quickly”. But in his letter, Dimon definitely was not underplaying the tariffs impact.
S&P 500 futures rallied back to pare losses to as low as 1.5% while 10-year Treasury yields bounced back to 4% during the session. Dip buyers are testing the waters but there’s still much caution to be had considering what’s at stake ahead of the 9 April deadline on Trump’s tariffs.
That also saw USD/JPY move back up to 146.40 levels now while EUR/USD fell back from 1.1020 to 1.0965 at the moment. AUD/USD is also seen paring losses from around 0.6000 to 0.6030 levels currently.
In other markets, gold also rallied back in response from $3,020 to $3,046 before being pulled back lower again now.
It’s all still a mess with volatility bouts largely persisting to start the new week. Coming up, we have Japan PM Ishiba set to speak to Trump on tariffs. So, keep an eye out for that and any other negotiations or talks regarding tariffs. That is the next key rhetoric in this saga as we have to see which countries are able to bring something to the table before 9 April.
