Asia open: Are we setting up for a classic Wile E. Coyote moment?

US markets

Despite looming tariff threats, US investors shrugged off the noise and pushed stocks slightly higher yet again, with the S&P 500 notching another record close on Wednesday. But let’s be clear—this wasn’t a smooth, confident ride. Markets churned, burned, and wobbled throughout the session before staging an afternoon rally, seemingly relieved that the FOMC minutes didn’t drop any fresh hawkish surprises.

Is that what we call a "defensive" relief bounce? Perhaps. It had all the hallmarks of a market cautiously climbing the wall of worry—buying dips but with one eye on the exits.

With no fresh hawkish surprises, some investors seized on the Fed’s measured stance, signalling that policymakers are still playing the long game on inflation and remain on an “ easing bias.” But make no mistake—inflation risks are shifting to the upside, and the Fed isn’t blind to it. The minutes revealed growing concern over trade policy uncertainty, with businesses already planning to pass on higher input costs from potential tariffs.

While the rally had some very short legs today, this isn’t a green light for risk-on euphoria. The market is still dancing between inflation inertia and tariff landmines. Whether this bounce sticks depends on how much traders are willing to ignore the tariff storm clouds gathering on the horizon.

Yet somehow, maybe it’s just my view, but it’s hard to believe inflation can easily be stuffed back into the bottle once it makes an encore appearance—especially when you layer in the reality that peak tariffs could be far more severe than what the market is pricing.

I can’t shake the feeling that we’re setting up for a classic Wile E. Coyote moment—where the market is sprinting full speed off the edge of a cliff, legs still churning, utterly oblivious to the fact that there’s no ground left beneath it.

The real question is: when does it finally look down?

Asia markets

The People’s Bank of China’s interest rate decision takes center stage on Thursday, headlining a packed Asia-Pacific economic calendar. Meanwhile, global markets are hitting fresh record highs or clinging to recent peaks as investors attempt to navigate the ever-evolving global trade tensions.

Given the stakes, you’d expect markets to be pricing in a more significant chunk of trade war risk —a scenario that could slam the brakes on global growth. But judging by the market’s resilience, it seems investors are either betting that the worst-case scenario won’t materialize or they’re underestimating just how severe the fallout could be.

The crystal ball is murky today, with signs of U.S. dollar inertia, but yields aren’t exactly ripping—which makes sense since the FOMC minutes didn’t throw any curveballs. Unless, of course, you somehow didn’t expect tariffs to push prices higher (in which case, welcome back to reality).

Honestly, my market view is shifting by the hour. One moment, I’m completely numb to the noise, and the next, I’m ready to load up on gold to hedge against trade war chaos. And while I still like the China tech trade that we jumped into post-Lunar New Year, we’re now out—because the whole market has caught on after Xi’s tech charm offensive, and chasing the herd isn’t my style.

So, back to the only game in town, trading the dollar. Nail the dollar trade, and the rest follows. Right now, it’s all about positioning—because once the next major macro shift kicks in, the real money moves won’t wait for a second invitation.

European stoxx

Europe’s main STOXX index took a drubbing, logging its biggest daily drop since the start of the year as fears of an all-out trade war surged following Trump’s latest tariff threats. Markets didn’t just wobble—they flinched hard, pricing in the grim reality that Europe is now firmly in the crosshairs of America’s growing isolationist and trade policy.

And while EU leaders scramble for damage control, Washington’s stance is crystal clear—the "pay your own way" security doctrine is in full effect. Any EU stimulus intended to cushion the economic blow from the trade war won’t be padding European pockets—instead, it’s getting funnelled straight into military spending.

The message is loud and unmistakable: higher deficits are coming as Europe needs to shoulder an enormous burden—both in defence and in the fallout of a fractured global trade order. The days of relying on US-backed security while reaping the economic benefits of globalization are fading fast. Now, the continent faces a harsh new reality—spending big on defence or risking being left behind in an increasingly unstable world.

Oil markets

Oil prices are treading water, struggling to gain traction as markets grapple with the true implications of a potential U.S.-Russia peace deal. While traders have priced in optimism about an agreement, they haven’t priced in the flood of unsanctioned Russian crude that could come roaring back into the market if sanctions are lifted.

And that’s where the real mispricing lies. The deal reportedly includes a rollback of U.S. sanctions imposed after Putin’s invasion, a move that’s already sparking friction with European allies—who would rather crush Russia’s economy than broker a truce.

The implications? A supply shock that could send oil tumbling as barrels long locked out of the global system come rushing back. While markets have been focused on the diplomatic chess game, the real question is: Can oil bulls stomach the flood when sanctions lift?

Gold markets

Gold isn’t playing by the usual script. Forget the old-school correlation with the dollar—this isn’t about mild FX fluctuations. Instead, gold is glued to tariff headlines, bouncing around like a jackrabbit on adrenaline as traders react to shifting odds of Trump’s 25% tariff sledgehammer actually landing.

Simply put, gold is the ultimate Trump tariff hedge.

With April 2 shaping up as "Tariff D-Day," the stakes couldn’t be higher. If Trump goes nuclear and escalates into a full-blown trade war, expect a panic-fueled rush into gold, with prices piercing $3,000+ as investors scramble for safety. On the flip side, if the tariff threats turn out to be more bark than bite, and the actual measures underwhelm, we could see a risk-on, dollar-off trade that dims gold’s shine as the fear trade fades.

Bottom line? Forget watching the dollar—gold’s fate is tethered to trade war risk, not currency moves.