Apr 11, 2025, 10:12 GMT+2 Global stocks fell on Friday and the dollar slipped after a brutal week, marked by the outbreak of a no-holds-barred trade war and a bond market crash that sparked fears of recession and shook confidence in US assets. The dollar fell to a 10-year low against the Swiss franc and a six-month low against the yen, as investors sought other safe havens. The euro rose 1.7% to $1.13855, a level last seen in February 2022, and gold, considered a safe asset in times of crisis, hit another record. Investors are grappling with fears of an escalation in the US-China trade war, after US President Donald Trump raised tariffs on Chinese imports, effectively bringing them to 145%. China responded by raising its tariffs on the US with every Trump increase, raising fears that Beijing could hike duties beyond the current 84%. The sell-off in US Treasuries intensified during Asian hours, with the yield on the 10-year note US10Y rising to 4.45%, gaining about 45 basis points on the week, the biggest increase since 2001, according to LSEG data.
The depreciation of US Treasuries increased during Asian hours, with the yield on the ten-year bond US10Y rising to 4.45%, gaining about 45 basis points for the week, the largest increase since 2001, according to LSEG data. "There is clearly an exodus from US assets. A falling currency and bond market is never a good sign," said Kyle Rodda, senior financial markets analyst at Capital.com. "This goes beyond forecasting a slowdown in growth and trade uncertainty." In Europe, stocks pared initial gains, leaving the STOXX 600 SXXP down nearly 1% on the day and down 1.7% for the week, one of the most volatile ever recorded.
In Asia, the Japanese Nikkei collapsed by 4.3%, while South Korean stocks KOSPI lost almost 1%. U.S. Treasury Secretary Scott Bessent tried to reassure skeptics by saying, during a cabinet meeting on Thursday, that more than 75 countries want to start trade negotiations. Trump himself expressed hope for an agreement with China, the world's second largest economy. But James Athey, fixed income manager at Marlborough, said the outlook remains clouded by greater uncertainty than a month ago. "There are still so many unanswered questions and no answers" U.S. S&P 500 futures ES1! and Nasdaq futures remained mostly flat, but trading was very volatile, with both indices down 2% before recovering 1.6%.
The US S&P 500 and Nasdaq futures NQ1! remained mostly flat, but trading was very volatile, with both indices down 2% before recovering 1.6%. Anxiety over tariffs triggered a new rush to safe-haven assets, after a brief but massive relief rally following Trump's move on Wednesday to temporarily reduce tariffs on many countries. "The short-term outlook for global risk assets remains uncertain, given concerns about growth and inflation, fluid sentiment, and rapidly evolving developments on the trade and tariff front," said Vasu Menon, managing director of investment strategy at OCBC Bank in Singapore. RECESSION FEARS This week's violent selloff in US Treasuries, which recalled the "dash for cash" of the COVID era, has reignited fears about the fragility of the world's largest bond market. Yields on 30-year bonds (US30YT=RR) rose to 4.90%, marking the biggest weekly jump since at least 1982, according to LSEG data. "What we are seeing in the US bond markets is not currently about inflation fears," said Michael Krautzberger, Global CIO Fixed Income at Allianz Global Investors. Krautzberger said that Treasury price action could reflect investors' fears that a sharp slowdown in growth, or a recession, "would further worsen the already unsustainable US fiscal outlook." "On the other hand, we could simply be seeing a rebalancing among institutional investors or a reduction in leverage by leveraged funds." Among commodities, gold GOLD hit another record, rising 1.1% to $3,210 an ounce.
Oil prices rose on Friday, but are still in the red for the second consecutive week due to concerns over a prolonged trade war between the United States and China. Brent futures BRN1! rose 1% to $63.97 a barrel.
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