Ipek Ozkardeskaya
Swissquote Bank Ltd
The red line was the sovereign bond markets. It was the flash selloff in US Treasuries over the past few days that finally made Donald Trump take a step back from his tariff strategy. Equities rebound by big chunks, treasury yields are down, the US dollar and oil recover but I wouldn’t pop the champagne just yet. We’ve already seen how the uncertainty alone has hit businesses.
Delta Airlines lowered its earnings guidance, citing global trade tensions. Amazon cancelled orders for China-sourced products to cut exposure to Chinese supply and let’s not forget: China remains a critical market for companies like Apple and Nike. So yes—some relief, but tread carefully.
Uncertainties will persist, though yesterday’s rebound rests on solid ground. We could see it extend—if Trump can just stay quiet for a few days, let the market digest the news, and watch how companies react. On the data front, the US CPI update is due today and should land with a bit less tension. The Federal Reserve (Fed) has remained relatively quiet during the selloff, simply noting that policy is “in a good place” amid growth and inflation uncertainties. Recession bets may have eased yesterday, but they’re still far higher than before Trump took office. Markets presently price in more than a 10% chance of a 50bp cut in June.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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