Market Quick Take - 2 April 2025

Market Quick Take - 2 April 2025

Macro 3 minutes to read
Saxo Strategy Team

Market Quick Take – 2 April 2025


Market drivers and catalysts

  • Equities: Tech leads gains; Trump tariff speech looms; EU rebounds but opens lower
  • Volatility: VIX dips ahead of Trump’s speech; traders cautious; gold, sector options in play
  • Digital Assets: BTC -1.2%; crypto stocks up; Circle IPO filed; ETH fee revenue hits low
  • Currencies: Pro-cyclical currencies bounce back with risk sentiment yesterday as USD sideways ahead of today’s US tariff announcement barrage
  • Fixed Income: Credit spreads on high yield debt have widened dramatically over last week
  • Commodities: Gold traders ponder how much has been priced in. Strong day for softs
  • Macro events: US Mar. ADP Employment Change, US “Liberation Day” Trump tariff announcements

Saxo’s Quarterly Outlook has been published, and can be accessed on the SaxoTraderGO here or web here


Macro data and headlines

  • Two US House of Representative seats remained in Republican hands after special elections to replace the two Republicans that were nominated for Trump administration positions, although the margin of victory fell by about half in both elections to 16-17 points from 33-34 points in the November elections, suggesting US President Trump is losing some of the middle ground.
  • For today’s “Liberation Day” tariff announcements in a Rose Garden event scheduled for today at 2000 GMT, US President Trump is considering three tariff strategies: a blanket 20% on all trading partners, tiered rates, and country-specific rates, with a focus on the latter. Additional tariffs are likely on pharmaceuticals and semiconductors, a lifting of fentanyl-related tariffs for Canada and Mexico, and imposing secondary tariffs on Venezuela. Put together, the tariffs could exceed the scope of the infamous 1930 Smoot-Hawley tariffs.
  • US February JOLTS Job openings dropped 194,000 to 7.568 million in February 2025, missing the 7.63 million forecast. Declines occurred in retail trade, finance and insurance, health care and social assistance, leisure and hospitality, and manufacturing.
  • The March US ISM Manufacturing PMI came in lower than expected at 49 vs 49.5 expected while ISM manufacturing prices surged to 69.4, above expectations of 64.6. The report indicated that “price growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery slowdowns and manufacturing inventory growth.”

Macro calendar highlights (times in GMT)

1215 – US Mar. ADP Employment Change
1400 – US Feb. Factory Orders
1430 – US Weekly DoE Crude Oil and Product Inventories
2000 (estimated) – US President Trump at Rose Garden press conference to announce tariffs
0145 – China Mar. Caixin Services PMI

Earnings events

  • Thursday: Constellation Brands, Conagra Brands, Lamb Weston Holdings 

For all macro, earnings, and dividend events check Saxo’s calendar.


Equities

  • US: Stocks edge higher ahead of Trump’s “Liberation Day” tariffs. The S&P 500 rose 0.38%, Nasdaq +0.82%, while the Dow slipped 0.03% as investors await details of sweeping import tariffs. Tech and discretionary sectors led, with Tesla +3.6%, Nvidia +1.6%, and MicroStrategy +6.2% among top performers. Economic data remained weak: factory activity contracted in March, and job openings fell to 7.57M, below expectations. Johnson & Johnson -7.6% weighed on the Dow after a failed talc-related bankruptcy attempt. Futures are flat this morning as investors brace for tariff announcements scheduled just after market close.
  • Europe: Markets rebounded Tuesday but open lower today as tariffs loom. The Stoxx 50 +1.4%, DAX +1.7%, and CAC 40 +1.1% snapped a four-day slide, driven by upbeat German manufacturing data (PMI output index 52.1) and easing eurozone inflation (2.2% in March). Gains were led by Thyssenkrupp +7% and Airbus +3.2%. However, Wednesday’s open is weaker amid caution over Trump’s tariffs, which could include a universal 20% levy. The FTSE +0.6% gained despite soft UK factory data (PMI 44.9). Futures indicate a modest pullback today, with no key economic releases scheduled.
  • Asia: Asia trades cautiously as Trump’s tariff clock ticks. Markets lacked clear direction with Japan flat, China +0.2%, and HK -0.2%. While optimism from strong Chinese manufacturing data helped early gains, nerves returned ahead of today's 3pm ET tariff speech. Xiaomi -2.9% hit a six-month low following an EV accident. South Korea’s KOSPI +1.7% outperformed after the court confirmed an April 4 ruling on President Yoon’s impeachment, bringing clarity to markets. Traders expect clarity on China stimulus and potential retaliation, adding to regional unease.


Volatility

Volatility pulled back slightly but remains elevated. The VIX closed at 21.77 (-2.3%), with VIX futures at 21.00 (+0.58%). Short-term vol (VIX1D -8%) fell sharply after Monday’s spike but still reflects tariff event anxiety. SKEW -3.75% and VVIX -1.6% show a slight reduction in tail risk hedging. JPMorgan expects a ~1.6% move in SPX on today’s tariff news and sees opportunities in gold straddles and sector rotation via options. Despite the easing, a lack of VIX put buying suggests traders aren't ready to fade the risk spike yet.


Digital Assets

Bitcoin steadies as tariff risk tempers sentiment. BTC dipped -1.2% to $84,141, while ETH fell -2.5% to $1,856, and SOL -1.8%. XRP -2.6% also underperformed. Caution dominated ahead of Trump’s tariff announcement. Crypto stocks surged, with MSTR +6.2%, RIOT +5%, CLSK +12.5%, and IBIT +3.2% leading gains. Meanwhile, Circle filed for a $5B IPO, hoping to join Coinbase and MicroStrategy among listed crypto plays. Ethereum’s revenue from L2 “blob fees” hit 2025 lows, showing fragility in the network’s new fee structure. Binance delisted USDT pairs in the EU, complying with MiCA.


Fixed Income

  • Credit spreads for high-yield bonds have spiked over the last week, with one Bloomberg measure of the spread on high-yield bonds to US Treasuries stretching to 347 basis points on Monday before tightening two basis points yesterday. This is the widest the spread has been since a a few days in early August of last year, when a dramatic spike in the Japanese yen unsettled global markets. This episode of widening spreads indicate rising default concerns and comes after a period from November to February in which credit spreads were near their tightest ever.
  • US treasury yields remained within the range after the 10-year benchmark treasury yield prbed new multi-week lows near 4.13% before rebounding to 4.19% by this morning. The cycle low in that benchmark since last October is 4.10%.
  • European short yields were rangebound after yesterday’s flash Eurozone CPI estimate came in lower than expected at 2.4% (versus 2.5% expected and 2.6% in Feb.) This was a new three-year low in that reading. At the longer end of the yield curve, the 10-year German Bund yield fell five basis points to close at 2.69 , it’s lowest close since Germany’s coming chancellor Friedrich Merz promised a massive German fiscal boost


Commodities

  • Gold prices briefly slumped USD 50 on Monday after reaching a fresh record, before finding support and bouncing from USD 3,100, with traders now looking ahead to today’s tariff announcement while pondering how much of the economic fallout has already been priced in.
  • Spot silver trades back below USD 34 while the discount to the COMEX future widens on tariff jitters. New York HG copper trades softer as well, while maintaining a 14% premium over London.
  • Crude prices paused last month’s rally, with Brent finding some resistance above USD 75, with the focus—for now—turning from a sanctions-led reduction in supply to Trump’s tariff announcement and its potential negative impact on growth and demand.
  • The softs sector saw broad gains on Tuesday, with coffee and cocoa rising on mounting supply fears in top growers West Africa and Brazil. The strength spread to sugar and not least orange juice, which surged 6%, with buyers emerging following a halving of the price during the past three months.

Currencies

Yesterday’s rebound in risk sentiment favoured pro-cyclical currencies like the commodity dollars AUD, CAD and NZD and the Scandies NOK and SEK, as EURSEK and EURNOK pushed back to the cycle lows.

USDJPY remains stuck near 150.00 and EURUSD near 1.0800 ahead of Trump’s tariff announcements later today. Yesterday was the eighth consecutive day that EURUSD crisscrossed that 1.0800 level as investors remain indecisive on the impact of incoming European fiscal stimulus and US tariffs as well as global portfolio reallocations sparked by Trump administration policies.


For a global look at markets – go to Inspiration.

 

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

Content disclaimer

The information on or via the website is provided to you by Saxo Bank (Switzerland) Ltd. (“Saxo Bank”) for educational and information purposes only. The information should not be construed as an offer or recommendation to enter into any transaction or any particular service, nor should the contents be construed as advice of any other kind, for example of a tax or legal nature.

All trading carries risk. Loses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money.

Saxo Bank does not guarantee the accuracy, completeness, or usefulness of any information provided and shall not be responsible for any errors or omissions or for any losses or damages resulting from the use of such information.

The content of this website represents marketing material and is not the result of financial analysis or research. It has therefore has not been prepared in accordance with directives designed to promote the independence of financial/investment research and is not subject to any prohibition on dealing ahead of the dissemination of financial/investment research.

Please refer to our full disclaimer and notification on non-independent investment research for more details.
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-ch/legal/disclaimer/saxo-disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.