The Trump administration has decided to delay the implementation of reciprocal tariffs, likely in response to market volatility and declining consumer confidence. Although initially omitted, exemptions were later announced for smartphones, computers, and semiconductor manufacturing equipment. Despite the postponement, new tariffs targeting semiconductors are anticipated soon. The repeated changes in trade policy have led to doubts about any coherent long-term strategy. Market comparisons between the U.S. and emerging economies have become more frequent, echoing past economic tensions seen in the UK during the short-lived Truss administration in 2022.

Asia Pacific Markets

The yen saw a strong rebound against the U.S. dollar, with the greenback falling nearly 4.2% in just three sessions to approach the JPY142.00 level. Although it briefly bounced back to JPY144.20, sellers drove it lower again. The yen's movement appears increasingly disconnected from U.S. bond yields, and speculation over Japanese bond trading continues amid limited real-time data.
Meanwhile, the Australian dollar staged a notable recovery after hitting a five-year low. It surged over 6% to reach $0.6345, though market expectations of significant rate cuts by the Reserve Bank of Australia, which could amount to 120 basis points over the year.

European Markets

The euro posted its strongest weekly performance since November 2022, gaining more than 3.5%. It reached a three-year high of $1.1475 following China's tariff escalation but later settled closer to $1.13. The euro’s rise, combined with falling oil prices, has reinforced market expectations of a quarter-point rate cut by the European Central Bank, potentially as soon as April.
In the UK, sterling extended its gains for the fifth straight session, nearing $1.3200. The upcoming employment and inflation data are unlikely to sway market sentiment, which already anticipates a rate cut from the Bank of England at its May 8 meeting.

 American Markets

The Dollar Index experienced high volatility, plunging to nearly 99.00 before rebounding toward 100.40. Despite a spike in the 10-year Treasury yield to 4.59%, it has since eased below 4.44%, calming market nerves. Stocks and bonds both showed recovery, reducing the previous week's market anxiety. Although upcoming retail sales, industrial output, and housing figures are in focus, their impact may be muted. Some indicators are distorted by temporary boosts, such as strong auto sales, while others don’t yet reflect tariff effects. Even with tariff delays, the average effective U.S. tariff remains at a growth-threatening 24%.