For the third consecutive session, the sharp volatility and continued bleeding of global markets continued with the opening of the week’s session today, Monday, April 7th, with US markets officially entering the bear market phase. US President Donald Trump announced late in the session on Wednesday, April 2nd, as scheduled, the final round of tariffs, imposing a minimum of 10% tariffs on all countries. These tariffs are scheduled to take effect on April 5th, changing the global trade system.
Trump described this day as a historic event and a day of liberation for his country. Most countries have begun trade talks with the United States, with more than 50 countries communicating with the White House in an attempt to find solutions to halt or delay these tariffs. China responded by imposing an additional 34% tariff on all US goods on Saturday.
Trump confirmed in his latest remarks on Sunday that he was not intentionally planning a sell-off in the markets, but sometimes radical measures are required, and that there is no gain without pain. US markets lost an estimated $6 trillion in stock value last week after the tariffs were announced.
Fears of a global recession have simmered with the start of this trade war, and their impact is expected to continue in the coming period. This has prompted investors to seek safe havens and exit high-risk assets. Expectations that the US Federal Reserve will cut interest rates at a faster pace than expected have also risen.
Futures markets, according to the CME’s FedWatch tool, are now pricing in a full basis point Fed rate cut this year, compared to only half a point before Trump’s latest decisions. Markets now see a rate cut at the May meeting of up to 49%, compared to less than 10% early last week.
US bond yields have fallen to their lowest levels since October of last year. This week, markets are awaiting US and Chinese inflation figures. US inflation is expected to grow by 0.1% in March, the lowest rate since July, and to reach 2.6% year-on-year, compared to 2.8% in February.
Inflation in China is also expected to move out of deflation and grow by 0.1% in March. The impact of tariffs will have a significant impact on inflation and economic growth, which explains the US Federal Reserve’s recent decision to raise its inflation forecast and lower its growth forecast.
However, any slowdown in inflation in March could support markets, albeit temporarily. Markets will be monitoring the impact of tariffs imposed on Chinese goods, steel, and aluminum during February and March.
The Producer Price Index (PPI), which is linked to commodity prices, is expected to rise, but this increase is not expected to be reflected quickly in the Consumer Price Index (CPI).
In a related development, the Reserve Bank of New Zealand is expected to cut interest rates by 25 basis points on Tuesday, bringing the rate to 3.5%. The US Dollar Index is trading at 102.70 this Monday morning, after testing 100.98 last week following the tariff announcement and losing more than 3%.
US markets are witnessing declines in futures markets before the open, with the Dow Jones Index falling by more than 1,000 points, and the S&P 500 Index falling by more than 3% and trading below the 5,000 point level, after recording its largest daily decline since March 2020 last week.
The yellow metal is trading at 3,025 at the beginning of the European session after sharp fluctuations in the Asian session, where it tested 2,975.
07/04/2025
ابحاث السوق
شارك المقال على منصات التواصل الإجتماعي
