Market Quick Take – 10 April 2025

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Market drivers and catalysts

• Equities: Tariff pause sparks historic gains; tech stocks lead; caution on US-China tensions
• Volatility: VIX posts record decline; short-term uncertainty persists
• Digital Assets: Crypto rebounds strongly; institutional optimism grows; ETF approvals boost sentiment
• Currencies: USD spiked higher versus safe haven currencies, lower against pro-cyclical currencies on Trump’s tariff delay, but reaction reversing overnight.
• Fixed Income: US short dated yields spike higher as partial Trump tariff pause seen less likely to bring Fed rate cuts. Long US treasury yields reversed from highs.
• Commodities: Pro-cyclical rebound led by copper and gas. Surging gold sends warning signal
• Macro events: US March CPI, US Weekly Jobless Claims, US 30-year T-Bond auction

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Macro data and headlines

• China retaliated against the latest Trump administration tariffs against it by adding 50% to its tariffs on all US imports, with the total tariff now set at 84%.
• US President Trump announced a 90-day pause on higher reciprocal tariffs that hit dozens of trade partners on Wednesday, while raising duties on China to 125%, a decision Trump said was “based on the lack of respect that China has shown to the World’s Markets”. Trump claimed his decision to pause the tariffs was based on the increasingly volatile bond market. Trump suggested deals are possible with China and the EU, emphasized tariff flexibility, and considered exemptions for some US companies, while talking up the ‘beautiful’ bond market.
• Fed minutes from March 2025 indicate policymakers expect tariffs to raise inflation, with uncertainty about the impact's extent and duration. Most officials see inflation pressures as potentially persistent, with inflation risks tilted upwards and employment risks downwards.

Macro calendar highlights (times in GMT)

1230 – US Mar. CPI
1230 – US Weekly Initial Jobless Claims
1300 – UK Bank of England’s Breeden to speak
1430 – EIA's Weekly Natural Gas Storage Change
1600 – EIA's Short-term Energy Outlook
1700 – US Treasury to sell USD 22 billion of 30-year bonds
1800 – US Federal Budget Balance

Earnings events

• Today: Tesco
• Friday: 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. 

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Equities

• US: US equities posted historic gains Wednesday following President Trump's 90-day tariff pause for non-retaliating countries. The S&P 500 surged 9.52%, the Dow rose 7.87%, and the Nasdaq soared 12.16%, its best single-day performance since 2001. Tech giants led gains: Nvidia (+18.7%), Tesla (+22.7%), Apple (+15.3%), Meta (+14.8%), and Amazon (+12%). However, US futures turned slightly lower early Thursday, reflecting renewed uncertainty over the ongoing trade dispute with China, where tariffs escalated sharply to 125%.
• Europe: European futures surged on Trump's tariff reprieve, with Euro Stoxx 50 futures climbing 8.1% and Germany’s DAX futures up 7.8%. Earlier, European stocks closed sharply lower amid trade tensions: DAX (-3%), CAC 40 (-3.34%), and FTSE 100 (-2.92%). Losses were driven by pharmaceuticals, autos, and energy sectors. The CDU/CSU and SPD coalition agreement in Germany boosted investor sentiment, paving the way for increased infrastructure and military investments.
• UK: FTSE 100 plunged 2.92% on Wednesday to a new 52-week low, pressured by escalating tariff tensions and pharma sector weakness, with AstraZeneca (-6.82%) notably impacted by Trump's potential pharmaceutical tariffs. BP and Shell also fell sharply amid revoked US licenses affecting their Venezuelan gas projects. JD Sports bucked the trend, rallying 10% following robust trading updates.
• Asia: Asian markets rallied broadly Thursday following the US tariff pause. Japan’s Nikkei jumped over 8%, South Korea’s KOSPI surged 6%, and Hong Kong’s Hang Seng rose nearly 3%. Chinese markets also climbed despite increased US tariffs, buoyed by state intervention and buybacks. Tech and industrial sectors led gains region-wide, with Samsung (+5%) and SK Hynix (+10%) notably strong. However, analysts warned underlying risks remain due to ongoing China-US tensions.

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Volatility

Volatility fell sharply as markets rebounded. The VIX plunged 35.75% to close at 33.62, the largest single-day drop on record, following Trump’s 90-day tariff pause announcement. Despite the drop, short-term volatility indicators (VIX1D and VIX9D) remain elevated, reflecting lingering uncertainty around US-China trade developments and upcoming economic data, including CPI and financial sector earnings.

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Digital Assets

Bitcoin briefly touched nearly $82,000 Thursday, leading a strong crypto rebound amid broader market relief. XRP and Ether rose sharply, each climbing around 12%, boosted by the US tariff pause. Crypto-linked stocks surged, including Coinbase (+16.9%) and Marathon Digital (+17%). The SEC’s approval of Ether ETF options further supported market sentiment, highlighting institutional interest.

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Fixed Income

• US treasury yields at the short end of the curve rose sharply after Trump announced the 90 day pause in some of the tariffs. This was mostly about reversing out the anticipation of more Fed rate cuts as the 2-year yield is now back in the range established in February and March – trading 3.87% this morning after the low of 3.43% last Friday.
• Long US treasury yields reversed off of spike highs near 4.5% on the 10-year treasury benchmark and 5.0% on the 30-year treasury benchmark but were less reactive to the news of Trump postponing some of the tariffs.
• US high-yield debt spreads tightened yesterday amidst the wide-spread risk on, with a Bloomberg measure of the high-yield spread versus US treasuries dropping 27 basis points to 426 basis points yesterday.

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Commodities

• Commodity markets surged following Trump’s announcement of a 90-day pause on reciprocal tariffs, easing fears of a global recession hurting demand. Leading the gains were copper and gas, both rallying over 7%, while crude oil rebounded nearly eight dollars from a four-year low earlier in the session, and silver jumped 5%.
• With markets held hostage by the White House’s erratic announcements, it’s still too early to call a bottom for pro-cyclical commodities in the energy and industrial metals sectors. However, the tariff pause offers traders a moment to reassess the bleak outlook that has now largely been priced in.
• Gold’s rally to less than 50 USD below last week’s all-time high, meanwhile, sends a signal that all is not well, and its continued strength suggests that despite the tariff pause, underlying concerns remain—geopolitical and economic tensions, mounting fiscal debt, and ongoing central bank demand continue to support precious metals.
• Silver maintained its value against a rallying gold price, suggesting the deleveraging phase has run its course, while also receiving some support from surging copper prices amid heightened expectations for additional stimulus measures being announced in China.

Currencies

• US President Trump’s postponing of the most punitive tariffs (ex-China) saw the US dollar rose sharply versus safe haven currencies like JPY and CHF and even Euro yesterday, while it fell sharply versus pro-cyclical haven currencies, especially AUD and even NOK within the G10 universe. For perspective, the AUDJPY currency pair saw a trading range of over 4% in yesterday’s session.¨
• USDJPY rose from a low of 144.00 yesterday to above 148.00 at one point before settling much lower in the Asian session – trading 146.65 as of this writing.
• USDCNH fell back within the range below the key 7.375 level that was briefly broken recently and saw muted volatility relative to other major USD exchange rates even as Trump raised the tariffs on Chinese imports to 125%