Just hours before the U.S. delayed reciprocal tariffs on all countries except China, President Trump urged investors via social media to buy stocks. The postponement initially drove U.S. equities higher, though analysts remain wary. While tariffs on China were increased, the average effective U.S. tariff rate now stands at 24%, slightly below the projected 27% if reciprocal tariffs had been applied universally. Despite this small relief, concerns remain over its long-term impact on economic growth and inflation. The dollar weakened sharply, with the euro, Swiss franc, and yen gaining more than 1%. Meanwhile, gold extended its impressive rally, adding another $30 after a $100 surge the day prior.

Asia Pacific Markets

The Japanese yen remains sensitive to shifts in the U.S. 10-year yield, which recently jumped from 3.85% to over 4.50% before pulling back. This volatility influenced the yen, with the dollar briefly reaching above JPY148.25. While portfolio flow data lags, Japanese investors sold a notable JPY2.57 trillion in foreign bonds recently—the largest since mid-2024—despite a drop in U.S. yields.
In Australia, the local currency rebounded from a five-year low after the U.S. tariff delay. The Aussie jumped from $0.5915 to as high as $0.6205 before retreating slightly. The broader trade-war climate, however, continues to pressure both economies.

European Markets

The euro saw strong demand in early European trading, reaching toward $1.1070 after dropping to $1.0915 the day before. Support is holding near $1.0880. The yield gap between U.S. and German two-year bonds, which surged over 30 basis points, is now narrowing.
In the UK, the British pound climbed for a second straight day, nearly recovering its 1.25% Monday loss. Sterling touched highs above $1.2880, with further resistance seen near $1.2925 and $1.2960. With GDP data expected to show modest growth, and ongoing trade tensions threatening the outlook, the Bank of England’s policy path remains uncertain.

American Markets

President Trump’s 90-day delay in imposing reciprocal tariffs on nations other than China sparked a market rebound, but U.S. yields and the dollar showed mixed reactions. The 10-year Treasury yield dropped from 4.51% to below 4.30%, while the Dollar Index fluctuated, peaking near 103.35 before falling under 102.00. The recent escalation in trade tensions with China has led to speculation about rising U.S. rates, with some blaming foreign influence and others pointing to the unwinding of complex financial trades. Although March CPI data may typically drive policy outlooks, its significance is overshadowed by tariff developments. Odds of a Fed rate cut in May dropped sharply—from over 50% to about 20%—after the tariff delay.