28/03/2025 Daily Reports
Asian Markets Decline Pre-Trump Tariff 'Liberation Day' as Gold Hits Record High
- Asian stocks plunged, poised for their largest drop in a month, as worries about an escalating US trade war muted risk appetite ahead of President Donald Trump’s announcement on April 2 of higher tariffs.
- A regional share gauge fell 1.3%, with Taiwan’s index hitting a six-month trough and Japanese shares declining due to ex-dividend reasons. Technology shares led declines in the region.
- Trump’s 25% auto tariffs and suggested “reciprocal tariffs” are creating inflation and slowdown fears, causing investors globally to reduce riskier asset exposure.
- Gold jumped to a record high of over $3,077 an ounce as safe-haven buying surged, and US Treasury yields steepened amid uncertainty about future rate reductions.
- Market strategists warned that dangers remain undervalued and that the majority of funds are going defensive and await Friday’s pivotal US PCE inflation data to get cues about the next Federal Reserve move.
- Meanwhile, the yen strengthened following Tokyo inflation increasing, while shares in Nio Inc. dropped over 8% in Hong Kong after a $518 million share sale.
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MARKETS IN TURMOIL: STOCKS FALL, BONDS RISE!
- Stocks dropped for the third consecutive day amid rising inflation and weaker-than-expected consumer spending.
- The S&P 500 nearly erased its weekly gains, while bonds rallied as investors sought safety.
- Gold hit an all-time high, reflecting uncertainty in global markets.
Key Economic Signals:
- Core PCE Inflation (Fed’s preferred measure) rose 0.4% in February, higher than expected.
- Inflation-adjusted consumer spending increased just 0.1%, signaling economic caution.
- The U.S. dollar wavered, while Treasury yields fell, with long-term bonds leading the decline.
What’s Driving the Market?
- Trump’s New Tariffs: A 25% import tax on foreign-made cars is set to take effect on April 3.
- Fed’s Next Move: With inflation still above 2%, rate cuts might be delayed longer than markets hoped.
- Investor Sentiment: Worries over a slowing economy with persistent inflation are fueling concerns about stagflation.
Market Movers:
- Tesla (-5.58%), Toyota (-1.93%), Hyundai (-4%) saw sharp declines amid auto tariff fears.
- Gold surged 0.7% to a record $3,078.50/oz as investors sought safe-haven assets.
- Bitcoin (-2.4%) and Ethereum (-5.6%) slumped, following a broader risk-off sentiment.
What’s Next?:
- Markets are caught in a phase of policy-driven uncertainty. The upcoming April 2 tariff implementation could significantly impact inflation expectations, corporate earnings, and Fed policy decisions.
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