With just one trading day left in Q1, risk sentiment has collapsed across Asia and Europe. 📉
🇯🇵 Nikkei fell 4%, European indices are all red, and over 550 EuroStoxx 600 stocks are down. Investors are bracing for President Trump’s tariff announcement on Wednesday.
📈 Gold surged by $36 and is now above $3,122/oz, as markets flee to safe havens.
🇺🇸 Meanwhile, US futures point to a sharp drop in the S&P 500 — not exactly a celebration for Liberation Day.
🎢 Q1 Recap:
Markets have been shaken by Trump’s tariff agenda.
📊 Winners:
- EuroStoxx 50: +9%
- DAX: +12%
- FTSE 100: +6%
📉 Losers:
- S&P 500: -5%
- Nasdaq: -10% (officially in correction territory)
Even the DAX, which had led early gains, lost steam in March. Carmakers and luxury stocks were hit hardest.
💥 US Consumer Stocks Hit Hard
Pain is spreading beyond tech:
- Delta: -27%
- United Airlines: -25%
- Ralph Lauren: -20%
- Lululemon: -19%
👉 This shows tariffs are squeezing US consumers — and it may backfire on Trump politically.
🔮 What’s Next?
1️⃣ Trump’s Tariff Plan (2 April)
💣 A major risk to global markets. Tariffs could:
- Push US inflation up by 1%
- Cut GDP by 0.8%
- Drive the dollar even lower (USD is G10’s worst performer in 2025)
- Boost safe havens like 🪙 gold and 🪙 ruble (top FX performer so far this year!)
⚠️ The market sees Trump’s policies as weakening the US globally — hurting consumers, raising costs, and risking a longer downturn.
But… analysts are still bullish on the S&P 500
🧠 FactSet expects a +21% gain over the next year, led by tech and consumer discretionary stocks.
Earnings season will tell us whether this optimism is justified.
If tariffs exceed 15%, US GDP could shrink by over 1%. That would be a big red flag 🚩 for stocks.
💡 Tariff trade so far:
- 🔻 US stocks
- 🔻 USD
- 🔼 Gold
- 🔼 US bonds
2️⃣ US Jobs Report (Friday)
📌 Forecast:
- +138k nonfarm payrolls
- Unemployment: 4.1%
- Wages: +4% YoY
🌪️ There’s potential for a big upside surprise due to:
- Rebound after weather disruptions
- Reversals of gov’t grant freezes
- Front-loading of hiring ahead of tariffs
👀 Watch for market reaction — especially if consumer sentiment picks up.
3️⃣ EU Inflation (CPI)
🇪🇺 EUR/USD is holding below 1.0830, but inflation data could shake things up.
- Headline CPI expected at 2.2% (down from 2.3%)
- Core CPI at 2.5% (down from 2.6%)
📉 If inflation surprises to the downside, ECB may act sooner. Rate cut odds:
👉 Lower CPI = weaker euro, especially if dollar stabilises after tariff announcement.
📊 Key Themes This Week:
- Tariffs = 🔥 short-term volatility
- Jobs = 📈 signs of resilience
- Inflation = 🏦 central bank decisions ahead