This Week: Markets rattle as tariff war fears escalate

• Trump tariffs spark historic market sell-off
• USD posts steepest drop in over 2 years
• EU response to tariffs may shake USDInd
• US CPI data could revive or crush NAS100
• Bank outlooks may drive US500 into bear zone

The first few days of April has been historic in many ways.

After US President Donald Trump hiked US tariffs by the most in over a century, US stock indices posted their biggest one-day declines since the pandemic, while the US dollar index (USDInd) posted its largest single-day drop in over 2 years!

Make no mistake, markets fears are running high that the Trump-led global trade war could lead the US economy, and the world at large into either a stagflation, or worse, a recession.

Though firm conclusions are unlikely anytime soon, we highlight 3 major scheduled events in the week ahead that could rock US assets (US dollar, NAS100, US500), likely rocking markets worldwide in tandem.

Events Watchlist:

Monday, April 7th: EU’s response to Trump tariffs?

At a meeting in Luxembourg, EU trade ministers are set to discuss the bloc’s response to US tariffs. An aggressive response, a la China’s retaliatory tariffs announced on April 4th, could further undermine the US economic outlook. If so, USDInd (US Dollar index) could sink below the 101 level for the first time since September 2024. A positive approach to negotiations could restore USDInd towards 103.20 support-turned-resistance level.

Thursday, April 10th: US March consumer price index (CPI)

Economists predict a slight cooling in the CPI figures, except for a slight uptick in the core CPI month-on-month print, up to 0.3%. Given raging US stagflation fears (still high inflation amid sluggish economic growth), a lower-than-expected set of inflation data that eases stagflation fears may allow the NAS100 to recover back above 18,400 – creating a larger gap away from a “bear market”. Otherwise, the 17k level beckons down south.

Friday, April 11th: Wall Street banks kick off US earnings season

Markets are set to pay less attention to these banks’ Q1 earnings. Instead, the limelight will shine on how these banking titans view the US economic outlook, given President Trump’s tariff shocker. Still, the financial sector accounts for 14.6% of the S&P 500 – the benchmark stock index tracked by our US500. More alarms being sounded about US stagflation/recession risks could send US500 below 5k and flirting with a bear market.

Here’s a comprehensive list of other key economic data and events due this week:

Monday, April 7

• XAU: China foreign reserves
• GER40 index: Germany February industrial production, external trade
• EUR: EU trade ministers to discuss reaction to Trump tariffs; Eurozone February retail sales
• USDInd: Speech by Dallas Fed President Lorie Logan

Tuesday, April 8

• AUD: Australia April consumer confidence; March business confidence
• TWN index: Taiwan March CPI, PPI 
• USDInd: Speech by San Franscisco Fed President Mary Daly

Wednesday, April 9

• NZD: RBNZ rate decision
• MXN: Mexico March CPI
• USDInd: FOMC meeting minutes; speech by Richmond Fed President Tom Barkin
• US “reciprocal” tariffs go into effect

Thursday, April 10

• China's retaliatory tariffs against the US  
• JP225 index: Japan March PPI
• CN50 index: China March CPI, PPI
• TWN index: Taiwan March trade balance
• US500 index: US March CPI
• RUS2000 index: US initial weekly jobless claims; speeches by Chicago Fed President Austan Goolsbee, Philadelphia Fed President Patrick Harker, Dallas Fed President Lorie Logan

Friday, April 11

• NZD: New Zealand March manufacturing PMI
• GBP: UK February GDP, industrial production, trade balance
• US400 index: US April consumer sentiment; March PPI
• USDInd: Speeches by New York Fed President John Williams, St. Louis Fed President Alberto Musalem
• US30 index: US earnings season kicks off with JPMorgan Chase, Morgan Stanley, Wells Fargo etc.