MARKETS
US Stocks clawed higher on Wednesday, with broad-based gains outshining some lacklustre earnings from Big Tech. Even as the Magnificent Seven basket wobbled, with Alphabet Inc. (GOOGL) tanking to its worst plunge in over a year, the market held firm, thanks in part to NVIDIA (NVDA) spearheading a rally in chipmakers.Muted or not, the rally suggests that investors have steadied their nerves—at least for now—following Trump’s tariff bombshells aimed at America’s three largest trading partners. But let’s not mistake calm for complacency. The market remains hyper-aware of “tariff whiplash syndrome,” knowing that just as quickly as Trump turns down the tariff heat, he can crank it back up.For the moment, the ongoing tit-for-tat threats with Canada and Mexico have cooled, and China’s measured response—with tariffs placed on a select few American goods—was seen as relatively tame by Wall Street.But the real market-moving catalyst came in a package delivered by Scott Bessent, who opted to keep things steady at Treasury, signaling that debt issuance won’t be ramped up. That sent 10-year Treasury yields sliding, further fueling US risk appetite.This remarkable resilience—let’s call it ‘rebounditude’—isn’t just blind optimism. It’s been fueled by a potent cocktail of liquidity, a softer dollar, and sinking U.S. Treasury yields—a trifecta that has loosened financial conditions and emboldened risk-taking across global markets. Investors are indulging in this setup like VIPs at an open bar, sipping on easy money and carefree speculation.But here’s the million-dollar question—what if falling bond yields aren’t a green light, but a massive warning sign? Investors may be celebrating lower yields, but this party could come to a screeching halt if the market suddenly realizes yields are dropping for all the wrong reasons—a slowing economy, a cooling labor market, or worse, both.And if that realization kicks in? “Rebounditude” will turn into “risk-off hysteria” faster than you can say ‘Hee’s Back.’ The catalysts? Friday’s U.S. labour market data or a surprise tariff escalation from Trump.Until then, investors are sipping from the half-full glass—but they better brace for the moment it spills.
Gold: The Hedge for All Seasons
Gold is proving itself once again as the ultimate hedge—against inflation, trade wars, and Trump’s unpredictable domestic and international policies. Spot gold surged past $2,880 per troy ounce in intraday trading before settling just below $2,870—yet another record close.While mainstream financial analysts might attribute the rally to a weaker dollar and sliding U.S. yields, that’s only part of the story. The real fuel behind this gold rush? A relentless wave of central bank demand—especially from the BRICS bloc, which is aggressively pushing de-dollarization. And if that wasn’t enough, Trump’s threat to slap 100% tariffs on BRICS nations if they abandon the dollar has only accelerated the bullion buying spree.Here’s the key takeaway: When central banks buy gold, it gets locked away in vaults for decades, untouched. Unlike speculative flows, which ebb and flow, this is structural demand that doesn’t reverse. London is already facing a shortage, and that’s before considering the investment boom sweeping across ASEAN. Singapore, Indonesia, Malaysia, and Thailand are all reporting double-digit year-over-year growth in gold purchases.Meanwhile, in the West, gold traders and hedge funds are front-running Trump’s policies, while in Asia, buyers are loading up on gold as both an economic shield and a store of value. With BRICS+ controlling 42% of global central bank FX reserves and shifting toward gold, this isn’t just another speculative rally—it’s a seismic shift in the global financial order.
Oil Prices Slide on Surging U.S. Supplies and Trade War Jitters
Crude oil took a 2% tumble on Wednesday as a larger-than-expected build in U.S. crude and gasoline inventories put the brakes on any bullish momentum. Add to that growing concerns over a renewed U.S.-China trade war and lackluster gasoline demand, and it’s clear why oil bulls are losing their grip.Monday’s temporary pause on Canadian oil tariffs starting the ball rolling sout, but in hindsight, that tarrif threat drivin spike looked like an overreaction. The reality is that Canadian oil producers will still take a hit, bearing the burnt on a wider-than-normal discount on Canadian crude, simply because alternative export options are limited.And here’s where Canada is truly stuck between a rock and a hard place—not only does it send nearly all of its crude to the U.S., but its pipeline infrastructure is heavily reliant on U.S. transit routes. Western Canada produces the bulk of the country’s oil, but for it to reach refineries in eastern Canada, it first has to pass through the United States.With weak demand, rising inventories, and geopolitics clouding the horizon, oil prices could remain on the defensive unless supply-side shocks emerge or OPEC+ steps in with further production cuts. For now, traders are taking a cautious stance, knowing that the next trade war headline could send oil into another whiplash-inducing move.Oil traders are raising an eyebrow at Trump’s bold proclamation to take over Gaza and relocate Palestinians to neighbouring countries. Markets are treating it with skepticism for now, but if there’s even a whisper of U.S. military deployment in the Middle East, expect the risk dial to shift dramatically.If Washington moves beyond rhetoric and into action, we’re looking at a classic risk-off playbook:
For now, the market seems to believe that this is more political posturing than policy, but if hard evidence emerges that boots are hitting the ground, we could see an immediate oil rally and a broad flight to safety in global markets.
Forex Markets: The Trade War Rollercoaster Is Far From Over
Tariff threats aren’t disappearing—they’re just shifting targets. And if you’re watching the tape, the next trade war battleground is clear: the EU is in Trump’s crosshairs.The euro’s move from 1.0275 to above 1.04 suggests that the market has yanked out a good chunk of the trade war premium, but let’s be real—how much higher can this rally run? The fundamentals for the euro are still weak, and with Trump openly signalling that Brussels is next on his tariff hit list, traders should be wary of getting too comfortable above 1.0400.Meanwhile, there’s a growing consensus that a U.S.-China trade deal is the likely endgame, but we’re calling BS on the market’s complacency. The risk of a prolonged trade spat is wildly underpriced. Unlike Canada and Mexico, where tariffs hit U.S. consumers and businesses hard, Trump has more room to maneuver with China, meaning he can drag negotiations out, make Beijing sweat, and extract more concessions.But here’s the real kicker—this trade war might not just be about trade anymore. Trump holds all the leverage, and he knows it. Expect Washington to use tariffs as a tool to pressure Beijing into leaning on Russia to de-escalate the war in Ukraine. This isn’t just about economics—it’s about global power shifts.The trade war isn’t fading—it’s morphing. Markets are mispricing risk, hedges are too light, and the next tariff shoe is about to drop. Buckle up, because this currency rollercoaster is just getting started.
Markets Bracing for the Next Tariff Trigger—It’s Not Just About April 1
Beyond the widely expected April 1 Tariff D-Day, there’s a dormant trigger lurking in the shadows—one that could send markets scrambling well before the deadline.Monthly trade figures are about to become more than just economic data—they’re now a geopolitical minefield. With the Trump administration doubling down on tariffs, each release will be scrutinized to the decimal, as Washington looks to reshape global supply chains, reinforce national security, and target what it sees as unfair trade imbalances.And make no mistake—this isn’t just a China story anymore. The tariff hammer has already landed on North America, Europe, and Asia, proving that Trump’s trade war playbook is far-reaching and highly adaptable. The speed at which tariff threats have turned into real policy actions suggests that every new trade print will serve as a temperature check for Washington’s next move.Wall Street has made its stance clear: The U.S. equity market is the administration’s scorecard. If policy changes start hammering risk assets, they’ll be quickly dialed back. That’s why traders aren’t just watching tariffs—they’re watching how markets react to them.But complacency is dangerous. The reality is that we’re one bad trade report away from another tariff escalation, whether it’s aimed at China, the EU, or an entirely new target. The next move isn’t about “if,” but “when”—and the markets know it.More By This Author:April 1: The True Tariff Wildcard Date?
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