Key Stories from the past week: Tariffs on pause - but tensions are not

Key Stories from the past week: Tariffs on pause - but tensions are not

Macro
Saxo Be Invested
Saxo

The implications of “Liberation Day” reciprocal tariffs & the subsequent uncertainty that came along with them, carried into this week in full force. A global selloff in equity markets & broad risk-off sentiment saw investors looking for safe havens in currencies and gold as the looming recession fears started to amplify & the VIX briefly exceeded 60. Equity Index moves included some of the largest seen in years, with Nasdaq closing a day up +12% & a heavy selloff in US treasuries saw 10yr yields surge 50bps in a significant move – which may have contributed to the US pulling the brakes on some tariffs in a 90-day pause announcement. Read more in this week’s key stories below:

Tariff pause brings relief rally
US President Trump announced a 90-day pause on higher reciprocal tariffs that were due to hit dozens of trade partners on Wednesday. In a sign of relief US equities posted historic gains with the S&P 500 surging 9.5% and the Nasdaq climbing 12.16%, its best single-day performance since 2001. The overall tariff angst remains unresolved with the bounce looking fragile.
Trump's tariff pause sparks rally

Treasury dump
Bonds were the talk of the town this week, as 10-year treasuries spiked 50 basis points in a significant move to 4.5%. While the broader equity market selloff carried into the start of the week, US treasuries suddenly came under heavy selling pressure, which could have been a component of the decision from President Trump to hit pause on the dramatic reciprocal tariff program.
Why are bonds losing appeal in these uncertain times?

Investors seek shelter in currencies
The US Dollar retreated for the fourth consecutive session this week as markets sought safe havens in the Euro, Japanese Yen, Swiss Franc, and Gold. The tariff escalations have led investors to demand higher yields for US debt, as the outlook for the US economy becomes bleaker and the tariff plans remain unclear. The Euro rallied to a three-year high, breaking the 100-month moving average, as German Bunds attracted investors. Meanwhile, the Japanese Yen has strengthened for four consecutive months.
SaxoTraderGO

Big Pharma face targeted tariffs
Speaking at a fundraiser dinner for his Republican Party on Tuesday, Trump said: "We're going to be announcing very shortly a major tariff on pharmaceuticals.” a move that could end decades of low-cost global trade in medicines. In 2024, pharmaceuticals were the EU's largest export to the US, worth a reported $127bn (£100bn).
Potential tariffs for Pharma

Next week we expect that tariff announcements and geopolitical developments will once again dominate. Scheduled earnings releases include Goldman Sachs (Mon), Johnson & Johnson, Bank of America, Citigroup (Tues), ASML, Abbott Laboratories (Weds), Taiwan Semiconductor, UnitedHealth, Netflix, American Express (Thurs). Focus will be as much on guidance and commentary around tariffs as much as the Q1 results. Key economic data to watch for are German Apr ZEW (Tues), China Q1 GDP, US Mar Retail Sales, Fed Chair Powell speaks (Weds), ECB interest rate decision, Atlanta Fed Q1 GDPNow (Thurs). 

 

Quarterly Outlook

01 /

  • 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

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • 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, ...
  • 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

  • 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

Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.


Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.