 While US investors managed to stay relatively composed through most of last week, the calm cracked heading into the weekend. Stocks saw extended selloffs, Treasury yields dropped, and Gold surged to yet another record high — all classic signs of a decisive flight to safety. With risk appetite now clearly under pressure, traders are no longer waiting to see what happens next. They’ve begun positioning defensively ahead of April 2, dubbed “Liberation Day,” when the US is expected to announce sweeping reciprocal tariffs. That looming event, along with inevitable retaliatory measures from trading partners, has injected a fresh wave of uncertainty into the outlook. Risk-off sentiment is likely to dominate US markets in the near term, at least until the full scale of the tariff fallout becomes clear — including possible re-retaliations. A big question is whether European markets, which showed notable resilience through March, can continue to defy the global jitters. Stocks in Germany and the UK have largely outperformed US peers, and Euro has led major currencies higher for the month. But the divergence might be tested soon, especially if the trade conflict spills into sectors crucial to the Eurozone's export-heavy economy. Meanwhile, forex markets have remained relatively stable, with most major pairs stuck inside the prior week's ranges. Kiwi was the lone exception. However, late-week price action across several currency pairs — particularly EUR/USD — suggests that breakouts may be imminent. The common currency is showing signs of bullish potential, with traders watching closely to see whether March strength can evolve into something even more meaningful. Ultimately, April could be a make-or-break month for the Euro. Either it confirms a genuine bullish turn, reversing the multi-decade downtrend, or it becomes just another short-lived bounce in a longer-term bearish cycle. Otherwise, the March rally risks being remembered as another false dawn in the common currency’s struggle to reverse its long-term decline..... |
