President Trump has announced the imposition of tariffs on several of America's trading partners, a move that has left global markets assessing potential impacts. Despite this significant development, the market's response remained largely muted. In other economic news, the European Commission has shelved a planned AI liability directive, while traders continue to process recent updates on Trump's tariffs and the Russia-Ukraine peace deal. Meanwhile, a $25 billion 30-year US Treasury auction concluded without disrupting the intraday rally.
The EUR/USD pair closed at 1.046, reflecting a stable foreign exchange environment despite geopolitical shifts. In Asia, risk sentiment remained constructive, with USD/JPY almost completely reversing Wednesday’s gains. This indicates a certain degree of resilience among traders in the region as they digest the unfolding international developments.
In financial markets, BNB price traded around $680 on Friday after witnessing an impressive rally of nearly 11% over the week. Treasuries marked a comeback, with yields finishing the day between 4.8 basis points lower for the 2-year and 9.5 basis points lower for the 30-year notes. Similarly, German yields followed suit, declining between 4.9 basis points for the 2-year and 6 basis points for the 5-10 year maturities.
Swiss National Bank board member Tschudin expressed readiness to revert to sub-zero interest rates if necessary to maintain price stability. The central bank's key policy rate currently stands at 0.50%.
“It allows us to steer the rate differential also in a low-interest environment in a way that the franc becomes less attractive than other currencies and therefore doesn’t appreciate excessively.” – Tschudin, Swiss National Bank board member
The DXY index dropped to 107.31 from 107.87, signaling a weaker dollar amid ongoing market adjustments. Across Europe, the Eurostoxx 50 index finished just shy of its March 2000 all-time high, underscoring investor optimism even as they navigate complex economic landscapes.
Virkkunen, involved in an EU-initiative linked to deregulatory efforts, asserted that their push is independent of US policies. This highlights a broader trend of regional efforts to carve out autonomous economic pathways amidst shifting alliances and trade measures.
Market participants continue to closely monitor developments surrounding Trump's new tariffs and the peace negotiations between Russia and Ukraine. These factors remain pivotal in shaping global economic dynamics and investor strategies. Despite these uncertainties, risk appetite appears resilient, particularly in Asian markets where positive sentiment prevails.