Global markets are still reeling from an escalation in trade disputes, as US President Donald Trump imposes high-stakes tariff blitz. The trade-weighted average tariff rate on all US imports has increased by about 5.5-6.0 percentage points. Combined with increases made last year, this new increase brings the total level of tariffs to their highest level since the Second World War. President Trump is poised to announce new reciprocal tariffs. Even as the world braces for America’s retaliatory measures, fears of a worldwide trade war are increasing.
The impact of these tariff changes are being felt throughout all the markets. Output of the story Aussie bears mauled as fears escalate over a resurgence in global trade tensions. At the start of the bearish Asian session on Monday, the AUD/USD pair remained heavy in prospected negative territory, around 0.6280. The currency is crashing amid a surge in global economic slowdown panic. This possible stagflation scenario of the US has spooked USD bulls, pulling USD/JPY down to one-week-low.
Keeping its uptrend intact is the precious metal gold, which soared to $3,090 at the start of the Asian session on Monday. Investors are flocking to Gold, looking for a safe-haven from the escalating uncertainty over a possible global trade war. They are justifiably concerned by mounting inflationary pressures. Similarly, the Japanese Yen has gained strength due to hawkish expectations from the Bank of Japan and a general risk-off mood among investors.
In Europe, all eyes are on the Eurozone inflation data. This data will be especially important for the European Central Bank (ECB) as they deal with foggy forecasts surrounding a possible rate cut in April. The markets are waiting on a few key economic indicators that central banks would like to drive their decisions over the upcoming months.
The RBA indicates it will maintain interest rates at current levels. With so many global economic uncertainties, this decision should bring some stability. Jun 30th Market participants have been looking ahead to several key data releases. The Canadian jobs report and the BoJ Tankan survey both have the potential to be very informative on economic conditions.
Here in the US all eyes are abuzz anticipating Friday’s jobs report. Hopefully it would open up a window into the impact of recent labor-market upheaval, including the reported impact that cryptos like DOGE are having.