Global financial markets are entering the second week of April 2025 in a state of heightened anxiety after one of the most turbulent trading weeks in recent memory. The catalyst: a dramatic policy shift from US President Donald Trump, who ignited global concern by introducing sweeping tariffs on imported goods. The move was marketed domestically as “Liberation Day,” but the market reaction was anything but celebratory.
Wall Street recorded its steepest decline since the height of the pandemic nearly five years ago. The selloff intensified on Friday following a robust US employment report and firm remarks from Federal Reserve Chair Jerome Powell, who emphasized that the central bank would not be pressured into cutting interest rates anytime soon. This has fueled fears of stagflation or even recession, setting a grim tone for the week ahead.
While the economic calendar for the upcoming days is relatively sparse in terms of volume, the importance of individual data releases—particularly from the United States—cannot be overstated. Most investors will be keeping their eyes on key inflation data and awaiting further developments on the tariff front, which are expected to remain the dominant driver of sentiment.
🌍Key Market Themes and Developments to Watch This Week:
President Trump’s Tariff Policy Fallout:
- Markets continue to reel from the announcement made on April 2, in which a blanket 10% import tariff was imposed on all goods entering the US.
- A secondary, harsher wave of levies affecting approximately 60 countries is expected to be enforced starting April 9.
- Global equities plunged last week, with the US Dollar falling sharply and the VIX Index soaring past the 45 mark—a level not seen since August 2024.
- Commodities were also caught in the crossfire: Gold dropped from its all-time high by 1.5%, while oil plummeted nearly 10%.
Resilient US Labor Market Adds Complexity to Fed’s Dilemma:
- The US economy added 228,000 jobs in March, well above expectations despite ongoing federal layoffs.
- The unemployment rate inched up to 4.2%, while wage growth remained stable.
- President Trump heralded the jobs data as validation for his trade strategy, but markets were too preoccupied with broader economic risks to respond positively.
📅 Monday, April 7
- Market Sentiment:
With no major economic reports scheduled in any of the major trading sessions (Asia, Europe, or North America), investors will begin the week digesting last Friday’s market carnage.
➤ Sentiment is expected to remain fragile after Wall Street’s sharp losses.
➤ Expect a defensive tone across equities and potential safe-haven buying (USD/JPY, gold, U.S. Treasuries).
📅 Tuesday, April 8
- Asian Session Highlights:
➤ Australia & Japan: Sentiment indicators released, though market impact is expected to be minimal.
➤ Risk appetite remains subdued as investors weigh the fallout from tariffs. - North American Focus:
➤ Canada: Ivey PMI data due during the New York session, which may offer insights into the Canadian economic outlook.
➤ U.S.: Remarks from Fed’s Mary Daly could provide clues on central bank thinking amid geopolitical tensions.
➤ Despite these events, geopolitical and tariff-related headlines are likely to dominate trading decisions.
📅 Wednesday, April 9
- Central Bank Watch:
A pivotal day for monetary policy watchers, with key updates from the Asia-Pacific region and the United States.
➤ New Zealand:
▪ Reserve Bank of New Zealand (RBNZ) expected to cut interest rates from 3.75% to 3.50%.
▪ Markets will be watching the post-decision commentary for clues on further easing.
➤ Japan:
▪ Bank of Japan Governor Kazuo Ueda delivers a scheduled speech in Tokyo.
▪ Any hints on the timing of policy normalization will be closely scrutinized.
➤ United States:
▪ The Fed’s Meeting Minutes from March will be released late in the U.S. session.
▪ Traders will seek clarity on inflation outlook, balance sheet policy, and the odds of multiple rate cuts this year.
▪ Key points may include revised GDP and PCE inflation projections, along with the Fed’s internal debate on quantitative tightening.
📅 Thursday, April 10
- Global Inflation Spotlight:
This is the most data-heavy day of the week, with inflation readings from the world’s two largest economies.
➤ China (Asia Session):
▪ CPI and PPI data expected to reveal the impact of weak demand and global trade tensions.
▪ Watch for disinflationary trends that may prompt further PBOC stimulus.
➤ United States (New York Open):
▪ March CPI Report expected to show:
– Headline CPI: +2.6% YoY (down from 2.8%)
– Core CPI: +3.0% YoY (down from 3.1%)
– Monthly headline inflation: +0.1%
– Monthly core inflation: +0.3%
▪ A softer-than-expected report could revive hopes for Fed easing; stronger data may squash rate cut expectations.
▪ Weekly jobless claims data will also be released alongside CPI.
➤ Central Bank Commentary:
▪ Several central bank speakers lined up, including:
– RBA Governor Michele Bullock
– Bank of England’s Sarah Breedon
– Fed members Logan, Harker, Goolsbee, and Bowman
📅 Friday, April 11
- UK in Focus (European Open):
➤ GDP Data: Monthly UK GDP figures are expected to shed light on the economy’s Q1 performance.
➤ PPI Inflation: Additional UK inflation data may influence expectations for future BoE policy. - U.S. Session:
➤ University of Michigan Sentiment Survey:
▪ Preliminary data for April may show a further decline in consumer confidence.
▪ Forecast: 54.9 (vs. 57.0 in March)
▪ This survey includes responses from the days following Trump’s tariff announcement, offering insight into early consumer reactions.
➤ Fed Speakers:
▪ Additional remarks expected from FOMC members Musalem, Williams, and Greene.
▪ Markets will be looking for consistency or divergence from Powell’s message on Friday.
🔍 Technical Analysis Snapshot
- US Dollar Outlook:
- The greenback ended last week down 1.4% as investors sought safety in alternative currencies.
- Traders will be watching for signs of stabilization, particularly in response to CPI data and Fed commentary midweek.
- Gold and Oil:
- Gold remains vulnerable to liquidation despite ongoing global uncertainty. Short-term support is expected around US$2,942.
- Oil markets face growing downside risks after breaking through multi-year support zones. Attention will be on whether prices attempt to recover or slide toward US$52 levels in the weeks ahead.
- US Equities:
- The S&P 500 remains under pressure, with no firm technical support until around the 4,900 region.
- Elevated volatility, as seen in the VIX, suggests further downside remains possible before any meaningful recovery attempts.
🧭Summary
This week presents a complex environment for global markets. While the number of scheduled economic releases is relatively light compared to recent weeks, the weight of geopolitical developments—chiefly the far-reaching consequences of US tariffs—will likely drive investor sentiment.
The US inflation print on Thursday is the marquee event of the week, carrying implications not only for the Fed’s policy path but also for broader financial market dynamics. Traders, analysts, and policymakers alike will be closely watching how markets digest the double punch of trade disruption and economic data, with volatility likely to remain elevated in the days ahead.
