- Global stocks saw a positive week due to easing US-China trade war concerns, despite mixed messages from President Trump.
- Gold experienced a decline as safe haven flows decreased, while Bitcoin saw a significant increase.
- The US Dollar Index is aiming for its first weekly gain since mid-March but remains vulnerable below the 100.00 level.
- The upcoming week is packed with high-impact data releases from Asia Pacific, Europe, UK, and the US, potentially raising recession fears.
Week in Review: Trump and Bessent Eye China Deal as Markets Grow Optimistic
Global stocks ended the week on a solid note as early week concerns around Federal Reserve independence and the ongoing US-China trade war dissipated. President Trump and Treasury Secretary Bessent have tempered rhetoric as they eye a deal with China.
The comments by both parties went a long way to restoring some confidence in the market and this has seen a notable shift in sentiment. Risk assets have risen at a steady pace for the majority of the week, while safe haven flows have taken a knock.
Friday saw US equities largely muted as market participants continue to wait for more information on the US-China situation. The mood remained somewhat uneasy after the US President Donald Trump said he would see it as a "total victory" if tariffs on foreign imports reach 50% within a year.
He also mentioned talks with China about a tariff deal and claimed Chinese President Xi Jinping had called him, though Beijing denies any negotiations are happening. The mixed messages dampened some optimism, which had been boosted by China granting exemptions on the steep 125% tariffs for certain U.S. imports.
Despite the uncertainty on Friday, all in all market participants should see this as a positive week.
At the time of writing the S&P 500 has gained 4% this week, while the Nasdaq is up 5.6% and the Dow has risen 2.4%. The increases are largely due to hopes that U.S.-China trade tensions may ease.
The overall Mood remains cautious as the economic outlook worsens and tariffs hurt company earnings. The benchmark index remains below levels prior to the April 2 announcement, and is over 10% off its February record close.
Source: LSEG
The US dollar was set for its first weekly gain since mid-March on Friday, influenced by mixed signals about U.S.-China relations improving. It rose 0.82% against the yen to 143.775 and 0.42% against the Swiss franc to 0.82985. Meanwhile, the euro dropped 0.24% to $1.1363, and the pound fell 0.12% to $1.332, despite unexpectedly strong UK retail sales.
On the commodities front, Gold has struggled as safe-haven flows have slowed down this week. The early week flurry, which sent Gold to $3500/oz, has disappeared as hopes of a trade deal escalate.
Gold is trading down 1.6% for the week and on course to print a massive shooting star candlestick close on the weekly timeframe. This does not bode well for bulls, especially if any trade deals are struck or announced over the weekend or early next week.
For now, a return to the weekly high at $3500/oz may require an escalation in trade tensions once more, otherwise the level may remain out of reach in the short term.
Bitcoin has been a big beneficiary this past week with the world’s largest crypto benefiting from the improved sentiment. At the time of writing, Bitcoin is up around 10% for the week.
Oil prices dropped on Friday and were on track for a weekly loss of over 2%, as markets expected an oversupply. Fears around oversupply were exacerbated when some OPEC+ members proposed increasing oil production again in June, according to a report earlier this week.
The Week Ahead: Shortened Trading Week Brings a Host of Data Releases
The upcoming week will be a busy one with a barrage of high-impact data releases scheduled. There are also lingering concerns around tariffs which are unlikely to dissipate soon.
President Trump said on Friday that he expects trade deals in the next three to four weeks which leaves the door open for further twists and turns in the saga.
Asia Pacific Markets
It will be a busy week for the Asia Pacific region with high-impact data from Japan, China and Australia all on the agenda.
In Japan, the Bank of Japan (BoJ) is expected to keep interest rates unchanged for now, despite high inflation and uncertainty about U.S. trade policies. However, it is likely to indicate plans for rate hikes in the coming months.
It’s a busy week in China as a potential trade deal with the US comes into focus. Beyond that markets are eagerly watching for the first PMI data since tariff conflicts worsened. On Sunday, China will release industrial profits data, which will show if profits turned positive after falling 0.3% year-on-year in the first two months. On Wednesday, China’s official and Caixin PMIs will reveal how tariffs have affected the manufacturing sector.
In the Pacific region we have some inflation data for Q1 being released in Australia. The RBA prefers the quarterly data as it provides a more stable view of inflationary trends. Markets expect CPI to rise due to higher food and electricity costs, even though service prices have slightly decreased.
Europe + UK + US
In developed markets, it will be a huge week for US data. Next (LON:NXT) week’s U.S. data could raise recession fears. Consumer confidence is expected to drop as households worry about rising prices from tariffs, job losses, and potential government benefit cuts. Falling investments and wealth are making people spend less
A weak first-quarter GDP report is likely. A surge in imports earlier this year, driven by fears of tariffs, may have hurt growth. Consumer spending and investments in March likely kept the economy growing, but future quarters may be worse.
April’s jobs report will show slower hiring due to economic uncertainty. Layoffs remain rare, but slower job growth could slightly increase unemployment as more people look for jobs than the market can absorb.
Canada’s election has taken an unexpected turn after Donald Trump suggested making Canada the 51st U.S. state. The Conservative Party has lost support, while the Liberal Party has gained momentum under its new leader, Mark Carney, former head of the Bank of Canada and the Bank of England. The winner will have to tackle the economic impact of a trade war, as 75% of Canada’s exports go to the U.S.
Europe also has a busy week ahead with a host of high-impact data releases. Euro GDP preliminary numbers for Q1 will be released on Wednesday 09:00am GMT time.
The week will come to a close on Friday with Eurozone CPI preliminary numbers. Markets are expecting a slight uptick on the YoY print to 2.5% from a previous print of 2.4%.
Chart of the Week - US Dollar Index (DXY)
This week’s focus remains on the US Dollar Index.
This week’s focus remains on the US Dollar Index.
The index is on course for its first weekly gain since mid-March but the index looks set to close below a key level of 99.57.
Without a break above the 100.00 key psychological level the DXY remains vulnerable to further downside.
Immediate resistance rests at 100.00, 100.61 and 101.18.
Looking at key areas of support and we have the 99.00 handle, 98.30 and of course the 97.70.
US Dollar Index (DXY) Daily Chart - March 28, 2025
Source: TradingView.Com