Market Quick Take – 31 March 2025

Market drivers and catalysts

• Equities: US futures down; tariffs looming; inflation worries; Europe/Asia stocks sharply lower
• Volatility: VIX jumps significantly; high anxiety before Trump tariffs and major data releases
• Digital Assets: Cryptos slightly down; XRP notably weaker; cautious investor sentiment; accumulation trends emerging
• Currencies: With global yields in a fresh plunge, the JPY coming out on top.
• Fixed Income: Global yield plunge on weak risk appetite ahead of Trump tariff announcements
• Commodities: Gold rally extends above USD 3100, Grain traders await key planting report
• Macro events: Germany Flash Mar. CPI, US Mar. Chicago PMI

The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.

Macro data and headlines

• President Trump said he plans to start his reciprocal tariff push with all major trading partners, thereby reducing speculation the recent market turmoil would limit the initial scope of tariffs set to be unveiled on Wednesday, 2 April.
• The University of Michigan’s final March reading of consumer sentiment fell to 57.0 due to economic concerns. Inflation expectations rose, with year-ahead expectations at 5.0% and long-run expectations at 4.1%. Consumer anxiety remains high amid tariff uncertainty, worsening labor-market outlooks, with future expectations falling to a 2022 low at 52.6.
• US consumer spending in February was weaker than expected while the Fed’s preferred inflation metric rose 0.4% from January, with the core PCE price index rising 2.8% YoY, versus 2.7% expected.
• China’s manufacturing activity expanded in March, with the official PMI index at 50.5, while the construction and services sectors rose to 50.8, higher than the forecast of 50.6.
• Goldman Sachs forecast the Fed and ECB will cut interest rates three more times this year due to Trump's tariffs weighing on economic growth. They predict the Fed will cut rates in July, September, and November, and the ECB will cut rates in April, June, and July.

Macro calendar highlights (times in GMT)

0600 – Germany Feb Import Prices & Retail Sales
0830 – UK Feb Mortgage Approvals
1200 – Germany Flash Mar CPI
1345 – MNI Chicago PMI
1600 – USDA Prospective Planting and Quarterly Stocks
2330 – Japan Feb. Jobless Rate
2350 – Japan Q1 Tankan Manufacturing and Services Surveys

Earnings events

• Thursday: Constellation Brands, Conagra Brands, Lamb Weston Holdings 

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• US: US futures fell Monday, extending last week's sharp losses as markets braced for President Trump's 'Liberation Day' on April 2, when a 25% tariff on imported cars and reciprocal trade duties will take effect. The S&P 500 closed -1.97% at 5,580.94 on Friday, marking its largest one-day decline since March 10. Inflation concerns persist as core PCE prices rose above expectations (+2.8%), and consumer inflation expectations hit multi-year highs. Major tech stocks, notably Amazon (-4.3%) and Microsoft (-3.0%), dragged markets lower. Earnings from PVH, Restoration Hardware, and Constellation Brands are in focus this week.
• Europe: European markets are set to start sharply lower Monday amid increasing trade tensions ahead of Trump's tariffs. FTSE 100 expected -41 pts, DAX -141 pts, CAC 40 -54 pts, and FTSE MIB -371 pts. On Friday, DAX closed -0.96%, pressured by weak German labor market data. CAC 40 closed -0.93%, dragged by auto stocks (Stellantis -3.79%, Renault -3.75%). Inflation data from Spain and France softened slightly, but tariff fears continue to dominate investor sentiment across Europe.
• Asia: Asian markets saw steep declines on Monday amid escalating US-China trade tensions and fears of broader tariffs. Japan’s Nikkei 225 plunged -3.9%, South Korea's KOSPI -2.6%, and Australia’s ASX 200 fell -1.6%. Hong Kong’s Hang Seng slid -1.75%, despite strong Chinese PMI data. Tech and auto stocks suffered heavily, extending last week's losses. China's CSI300 and Shanghai Composite each dropped around -1%, weighed by persistent concerns about Trump's anticipated reciprocal tariffs.

Volatility

Market volatility surged, with VIX jumping nearly 16% on Friday to close at 21.65, driven by heightened anxiety over Trump's tariff announcement and stubborn inflation data. VIX futures (VX1!) rose sharply (+5.81% at 22.20), signaling further anticipated turbulence ahead of a data-heavy week and Trump's 'Liberation Day'. Elevated short-term volatility indicators (VIX1D +49%, VIX9D +13.28%) underscore strong investor caution.

Digital Assets

Cryptocurrency markets weakened as traders remain cautious ahead of Trump's tariffs. Bitcoin fell slightly to $82,102 (-0.3%), Ethereum slipped to $1,805 (-0.1%), and XRP dropped notably by -2.14%. Crypto-related stocks also suffered, with Coinbase down -7.8%, Marathon Digital -8.58%, and MicroStrategy -10.8%. Analysts noted seasoned market participants shifting from selling to accumulation, signaling medium-term bullish sentiment despite short-term headwinds.

Fixed Income

US Treasury yields plunged all along the yield curve on Friday despite the stronger than expected core PCE data for February as a powerful bout of risk aversion settled over markets. Yields dropped further in the Asian session to start the week as the market fears the impact of the Trump tariff announcements later this week. The 2-year US Treasury benchmark trades near the lows since last October at 3.85% this morning after trading above 4.0% midweek last week as the market prices more Fed easing this year and the 10-year US Treasury benchmark has plunged some 20 basis points from the multi week high of last Thursday, trading 4.20% this morning.

Japanese bond yields fell sharply overnight, with the 10-year JGB benchmark falling some 4.5 basis points to near 1-month lows around 1.50% after falling sharply on Friday as well. Japan’s growth outlook is also under pressure from Trump’s threatened tariffs.

Commodities

• Crude trades lower despite Trump threatening “secondary tariffs” on buyers of Russian oil if Putin refuses a ceasefire with Ukraine, with the focus instead on the potential damaging impact on demand from a global trade war.
• Gold’s continued rally highlights an ongoing worry across global financial markets, and overnight bullion broke above USD 3,100 as Treasury yields plunged (see above), thereby recording a year-to-date rally of 18%. Gold miners offering operational leverage to gold price upside have been strong outperformers in 2025, with an ETF tracking the major miners showing a year-to-date return of 35%.
• Silver’s year-to-date performance remains on par with gold, as the white metal continues to be seen as the alternative, despite some weakness emerging across industrial metals—notably copper, which has reversed sharply lower after the dash to ship the metal to the US ahead of possible tariffs ended.
• Grain and soybean traders await today’s Prospective Plantings and Quarterly Stocks reports from the USDA. Corn fell to a three-month low on Friday on expectations of increased acreage allocation, while wheat slumped to a nearly eight-month low on sluggish demand.

Currencies

• With collapsing bond yields around the world on Friday and to kick off this week today, it is no surprise to see the low-yielding Japanese yen coming out on top, as USDJPY has retreated all the way to 149.00 after briefly trading solidly below that level overnight. This after Friday’s intraday high of 151.21, but still far from the low posted in March at 146.54.
• The US dollar has also turned lower versus the euro since last Thursday’s 1.0733 low, as EURUSD rose to close last week at 1.0828 and rising slightly more in the Asian session overnight.
• Weak risk sentiment is seeing weakness in many of the pro-cyclical currencies, from the commodity dollars CAD, AUD and NZD, to a currency like the Mexican peso, which is eyeing the impact of coming Trump tariffs.