【Weekly Market Kickoff: Trump Tariffs Deepen – Spotlight on EU’s Response】
― Ongoing Risk-Off with Global Equity Sell-Off – The Key Lies in “Retaliation or Dialogue” ―
■ Trump Tariff Shock Expands, Heightening Market Turmoil
Risk-off sentiment surrounding Trump’s tariff policy has continued and intensified even through the weekend.
- President Trump declared tariffs will remain in place “until the U.S. trade deficit is resolved”
- He dismissed falling stock prices as “within expectations,” showing no signs of concern over market volatility
- He increased pressure on Fed Chair Powell, claiming that rate cuts are “too slow,” signaling further political interference in monetary policy
→ The market is now grappling with simultaneous shocks from tariffs, monetary policy uncertainty, and geopolitical risks, fostering an environment of extreme uncertainty.
■ Currency Strength Ranking: Capital Flows in a Risk-Off Market
📊 Performance of Major Currencies vs. USD (Past 1 Month):
| Currency | Trend | Key Drivers |
|---|---|---|
| 🇨🇭 CHF (Swiss Franc) | Strongest | Safe haven with minimal U.S. economic exposure |
| 🇨🇦 CAD (Canadian Dollar) | Strong | Tariff exemption from U.S. + commodity support |
| 🇪🇺 EUR / 🇯🇵 JPY | Firm | Defensive inflows + potential retaliatory tariffs |
| 🇬🇧 GBP (British Pound) | Weak | Vulnerable export sector + impact of lower oil prices |
| 🇦🇺 AUD / 🇳🇿 NZD | Weakest | Highly correlated to China, facing direct trade war impact |
→ The trend of buying CHF and selling AUD/NZD is gaining traction. Cross-pair setups like CHF/AUD and NZD/CHF are effective in this environment.
■ All Eyes on the EU: Retaliation or Negotiation?
Markets are now closely watching how the EU will respond to U.S. tariffs.
📌 EU Retaliation Tariff Timeline:
- Apr 9 (Tue): European Parliament to deliberate on proposed retaliation
- If approved, a two-phase implementation is expected:
- Phase 1: Tariffs on select goods from Apr 15
- Phase 2: Full rollout by mid-May
→ If the EU opts for dialogue and restraint, it could trigger a temporary rebound in equities and risk assets.
Conversely, if it takes a hardline retaliatory stance, markets could spiral into full-blown trade war risk-off mode.
■ Fundamentals Take a Backseat to Geopolitics and Policy Risks
Today’s Main Events:
- 🇪🇺 Eurozone Feb Retail Sales: Limited market impact expected
- 🇺🇸 Fed Governor Kugler Speech: Focus on inflation and the Phillips curve
- 🇪🇺 EU Foreign Affairs Council: Discussions on U.S.-China trade strategy
→ Macroeconomic indicators are taking a backseat, with tariffs and geopolitical dynamics steering the market narrative.
■ Trading Strategy: Risk-Off as Default, Flexible Shifts Based on EU’s Move
📌 Current Positioning Outlook:
| Asset Class | Bias | Notes |
|---|---|---|
| USD/JPY | Sell on Rebounds | Likely to test lower on equity weakness and risk-off flows |
| Gold (XAU/USD) | Buy on Dips | Supported by falling yields and safe-haven demand |
| AUD & NZD | Bearish | Prefer shorts vs CHF and JPY |
| CHF (Swiss Franc) | Stay Long | Defensive strength continues, favorable in crosses |
📊 Summary:
| Theme | Current Situation & Outlook |
|---|---|
| Trump Tariffs | U.S. braces for prolonged conflict, weighing on stocks and the dollar |
| EU’s Response | Crucial inflection point this week – dialogue vs retaliation will shape market direction |
| Currency Strategy | Favor CHF strength, short AUD/NZD, and continued JPY support |
| Economic Indicators | Fundamentals are likely to remain secondary to geopolitical risks |
