Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
The outcome from US President Trump’s ‘Liberation Day’ was more aggressive than markets had been expecting triggering a global sell off and widening recession risks. Vix volatility reached above 45 intra-day Friday, levels not seen since 2020, and there has been major repricing across all major asset classes in the aftermath. Equity markets fell around the globe following the tariff announcements from the US government. US stocks suffered their worst days since 2020 wiping out $trillions in market value. European equities plunged in sync in the worst session since July 2024. In Asia, Japan’s Nikkei dropped 2.5% and Australia’s ASX 200 hit 8-month lows. The tariffs imposed by the US raised the chance of US recession risk and more aggressive Fed rate cuts. Bonds reacted accordingly with Treasuries rallying and US yields shifting lower across the curve. The US dollar was under broad and significant pressure yesterday in the wake of the Trump tariff announcements. CHF and JPY gained as they served as safe havens, as did CAD and MXN as the countries were omitted from Wednesday reciprocal tariffs increase.
Sharesplunge on tariff news
Trump's tariff tsunami
Treasuries provide a harbour
Bonds rally as investors hide in safe havens
Global currencies recallibrate
Forex update
Oil prices collapse
Both WTI and Brent crude oil fell more than -10% on the week as worries of economic slowdown mount and after OPEC+ unexpectedly increases oil supply in May by three times the amount planned. The group described the increase as a deliberate effort to drive down prices.
Oil extends selloff
Next week will be driven by how countries respond to this week’s actions by the US administration with the EU’s countermeasure expected to be announced on Monday. Q1 Earnings season kicks off with results from the US banks JP Morgan, Wells Fargo, and Bank of New York Mellon (Friday). Key economic releases include US Crude oil inventories (Weds), US Mar CPI (Thurs), German Mar CPI, Michigan Apr Inflation Expectations (Fri). While FOMC Fed minutes and US 10-year note auction on Wednesday will also be keenly watched.