The first quarter of 2023 has been marked by significant market fluctuations, with US tech giants taking a hit due to the trade war and geopolitical shifts dominated by President Donald Trump’s return to power. Despite overall global stocks remaining flat, the US dollar has experienced its worst start to a year since the 2008 global financial crisis.
Gold prices have seen their best quarter since 1986, while the benchmark US Treasury yield is set to end Q1 with a respectable 2.7% return. However, German Bund yields have surged over 40 basis points due to Berlin’s plan to release its self-imposed debt brake and allow for higher defense spending.
The dollar has dropped by 4%, giving emerging market currencies a rare chance to shine. Russian President Vladimir Putin’s re-engagement with Trump has helped the rouble surge, while other currencies such as Poland’s zloty, Czech crown, and Mexico’s peso are also in positive territory.
The “Magnificent Seven” US tech giants have shed nearly $2 trillion due to Chinese rivals and European defense firms. Bitcoin has been volatile, while oil prices have yo-yoed due to supply-and-demand issues and Middle East ceasefires.
With Trump set to unveil his grand global tariff plan dubbed ‘liberation day’ in Q2, investors are concerned about the potential for triggering recessions. Experts predict that effective trade-weighted tariffs could rise from 2.5% to 10% or more, leading to a bruising world downturn. As a result, some forecast a significant risk-off period, while others expect a rebound.
Source: https://www.reuters.com/markets/us/global-markets-q1-analysis-pix-2025-03-30