There is confusion in the markets due to Trump’s tariff changes. The tension between the US and China increased demand for safe haven assets. While gold broke records, the Japanese yen and Swiss franc continued to rise. However, a mixed performance was notable in the stock and cryptocurrency markets.

The frequent changes in US President Donald Trump’s customs tariff policies have made it difficult for investors to make decisions. Concerns that tensions between the US and China will escalate have kept risk perception high. The tariff duel between the world’s two biggest economies is deepening uncertainties about where the standoff will lead. Actions by the US administration regarding tariffs and their possible impact on the economy continue to be the biggest source of uncertainty in the markets. US-CHINA TARIFF TENSION ESCALATES The White House announced that the tariff rate on China reached 145% when those based on fentanyl crisis concerns are included. President Donald Trump alleged that China has benefited more from customs tariffs for a long time and stated, “We’ll see what happens with China, we would really like to be able to make a deal with them.”

In response, China increased the tariff rate on US products to 125%, as announced by the Ministry of Finance. INFLATION TAKES A BACKSEAT The tariff dispute between the two major economies overshadowed the US decision to postpone for 90 days and the better-than-expected inflation data. Consumer prices in the US came in below expectations with an annual inflation rate of 2.4% in March. Monthly inflation in the country decreased for the first time since May 2020. Despite the slowdown in inflation in the US, analysts indicated that the effects of tariffs might be seen later, emphasizing expectations of accelerated inflation in April. SAFE HAVEN DEMAND ON THE RISE While tariffs suppress global growth and increase recession concerns, investors are turning to safe havens. Price movements in the money markets strengthened the predictions that the Fed might make its first interest rate cut of the year in June. It is priced that the Bank will make a total of 4 interest rate cuts throughout the year. As a result, the 10-year bond yield in the US rose to 4.44%, while there was a decline in 2-year and 5-year bond yields. DOLLAR AT A 2-YEAR LOW Concerns about growth in the US and worries that inflation will rise again recently have reduced confidence in the US economy and caused a decline in the dollar index, favoring the Japanese Yen and Swiss Franc. The dollar/yen pair dropped to its lowest level since September 2024 with a 1% decline to 143.1. The Swiss Franc reached its highest level against the dollar since 2011. The dollar index tested below 100 for the first time since July 2023 and is currently at 100.1 with a 0.3% decrease. The euro/dollar pair surpassed 1.11, reaching its highest level since September 2024. GOLD BREAKS RECORD With increasing global risks, the safe haven nature of gold is reinforced, and its ounce price continues to trade at record levels. After reaching $3,220 per ounce in the past 3 business days, the price of gold oz balanced at $3,213. Meanwhile, Brent crude oil’s barrel price stands at $62.9 with a 0.6% decrease. MIXED MOVEMENTS IN THE STOCK MARKETS Yesterday, the S&P 500 index lost 3.46%, Nasdaq index fell 4.31%, and Dow Jones index lost 2.50% on the New York Stock Exchange. Index futures in the US started the new day with a positive trend. In Europe, the DAX 40 in Germany gained 4.53%, CAC 40 in France gained 3.83%, FTSE 100 in the UK increased by 3.04%, and FTSE MIB 30 in Italy rose by 4.72% yesterday. Index futures in Europe started the new day with a positive trend. While the Nikkei 225 index in Japan fell by 4.3%, the Kospi index in South Korea decreased by 1%. On the other hand, the Hang Seng index in Hong Kong rose by 0.9%, and the Shanghai Composite index in China increased by 0.3%. CRYPTOCURRENCIES FLUCTUATED The effort to recover continues in the cryptocurrency markets. Bitcoin, which rose to $83,000 yesterday, is currently trading around $81,000. Ethereum is changing hands above $1,500, with a 2% increase.