Global stock markets lost ground on Friday and the dollar fell. Added to that, while both global tariffs — have fuelled concerns about a protracted recession — have made investors inclined to U.S asset demand.
Flight to Safe Havens
This sentiment among investors has been reflected as “investors have to hide in safe havens”. This contributed gold to the dollar and also reached the highest recorded in 10 years.
U.S. Treasury Sell-off
Increased selling of U.S. was witnessed throughout Asian trading. The yield on the 10-year Treasury note rose to 4.45%, up around 45 basis points a week. It was the biggest weekly gain since 2001, according to data from LSEG.
When Treasuries are being sold off in this manner, it suggests a lack of demand for this asset, while the dollar being the weak indicates a loss of faith in the U.S. So, we get up in this environment, and at least, so think analysts and investors. Friday’s sharp sell-off in Treasuries and dollar weakness are the reflection of something more positive for U.S.
Asian Market Performance
In other parts of Asia, Japan’s Nikkei index was off 4.3% on the day and South Korean stocks fell nearly 1%. Taiwan’s main index was almost 2% higher after initial losses.
U.S. shares: S&P 500 & Nasdaq futures bounced after steep overnight losses. Futures for Europe heralded a higher opened as participants brace for further turbulence.
Trade War Escalation
Investors are now fighting fear of escalating trading friction between the China and also the US. This nervousness is because the US The total amount of tariffs on Chinese imports has now reached 145%.
In exchange, China imposed billions of dollars in fees on U. S. goods, and there are concerns that Beijing will increase those tariffs from the current 84% to more.
Chinese Stocks: Blue-chip CSI300 Index eased from earlier surge to end down 0.1% Hong Kong’s Hang Seng index was up 0.56%
Dollar’s Decline
And last few weeks there was always a selling pressure on US dollar as many investors started to make switch of the investment into Japanese yen, Swiss franc, euro etc.
The dollar on Friday slipped to a 10-year low against the Swiss franc and a six-month low against the yen. The euro jumped 1.7% to $1.13855, the highest since February 2022.
The dollar index which values dollar against six major currencies hit below 100 for the first time since July 2023. A significant dollar slump also lifted emerging market currencies, including the ringgit.
U.S. Economic Data
U.S. Markets were little moved after Labor Department consumer prices showed a surprise decline for March on Wednesday. Others see the inflation change as temporary, reflecting the consequences of tariffs.
Turbulence in U.S. Treasury Market
All this comes after a week of sharp declines in U.S. Concerns about potential fissures in the largest bond market on earth — Treasury securities — have led to a softening in risk aversion through this week.
Yields on 30-year bonds rose to 4.90% in LSEG data, on track for their biggest weekly gain since at least 1982.
But some analysts think U.S. this bond markets are data’s not just inflation thing
This is said to be where “Treasury price action may reflect fears of a hard economic landing or recession that increase the odds of a U.S. balance sheet.” Or it could simply be these moves are just portfolio rebalancing from some institutional accounts. Or even hedged with “the latest round of margin-cycles of deleveraging,” the note said.
Gold Price Surge
The flight to safety pulled Gold to a new all-time high in the commodities arena. Gold was at 3,210 an ounce, with a 1.1% increase.
Oil Price Decline
Opposed wavy cost on Friday — loss yet another week over the dual weeks. The fall is as the fears of long term trade war by US vs China kept increasing. Futures for U.S. US crude declined 0.5%, while Brent contracts slipped by 0.6%.
