“Potential Market Turmoil Ahead: Dollar Unsteady, Futures Up Amid Tariff Uncertainty”
Written by Tom Westbrook
Financial markets started off with mixed signals on Monday, as U.S. stock futures saw a rise while the dollar remained uncertain. This comes ahead of a week that is set to be driven by various factors such as data releases, Chinese earnings reports, and the looming threat of significant U.S. tariff increases.
S&P 500 futures were up by approximately 0.6% in Asian trading, with Nasdaq 100 futures also showing a rise of 0.8%. The Nikkei in Japan and the Hang Seng in Hong Kong both climbed around 0.2%.
The euro, which experienced a slight drop last week, saw an increase of about 0.2% to $1.0835 in early trading. In emerging markets, Turkey’s lira remained unstable following the imprisonment of President Tayyip Erdogan’s main political opponent, causing unease among investors.
Shares of Australian fiber-cement maker James Hardie fell by 12% after announcing the acquisition of U.S. outdoor building products company AZEK Company for $8.8 billion in cash and stock.
The upcoming week will feature important events like global purchasing managers index releases, the U.S. Federal Reserve’s preferred inflation indicator, inflation data from Australia and Japan, a budget update in the UK, and major earnings reports from China.
However, market analysts anticipate that updates on U.S. President Donald Trump’s plans for implementing reciprocal tariffs on April 2 will be the primary driver for market movements. Following a volatile period for stocks, bonds, and currencies, analysts are finding it challenging to predict the market’s direction.
“It’s very difficult to come up with a solid plan,” stated Chris Weston, head of research at Pepperstone. “Understanding consumer behavior is crucial, as fears of an economic slowdown in the world’s largest economy have led to a sell-off in dollars and stocks, and a surge in Treasuries.”
Trump has stated his intentions to implement a complex array of tariffs next week, although specific details are unclear. The tariffs are expected to consider the impact of foreign tariffs as well as foreign value-added taxes on imports.
While the S&P 500 saw a slight increase on Friday following hints of flexibility from Trump, traders remain cautious amid uncertainties surrounding trade negotiations. U.S. Treasury yields have dropped significantly since mid-February, with investors diversifying away from U.S. stocks towards markets in Hong Kong and Europe.
Earnings reports from companies such as BYD, Kuaishou, Chinese banks, and property developers will be closely watched. In the U.S., Dollar Tree and Lululemon are among the companies scheduled to report their earnings.
Gold prices are near last week’s record high at $3,021 per ounce, while bitcoin remains stable at $85,860.
Bob Savage, head of markets macro strategy at BNY, highlighted the importance of cash
Economic uncertainty remains a concern. (Written by Tom Westbrook; Edited by Christopher Cushing)
