Markets Rattled by Renewed Trade Tensions

• U.S. markets sold off as President Trump resumed his verbal attacks on Fed Chair Powell, criticizing the Fed’s policy stance and escalating tensions over interest rate decisions. U.S. 10-year yields jumped 8.8bps to 4.41%.
• Trade risks re-escalated after China warned countries against deals that harm its interests, responding to U.S. efforts to isolate Beijing through bilateral agreements.
• The ECB cut rates by 25bps to 2.25% at the end of last week, citing weaker growth and rising global uncertainty. Dropping the term “restrictive” confirmed a dovish tilt, with a terminal rate now seen near 1.75%.
• With most European markets closed over Easter and U.S. volatility elevated, the domestic market is expected to be quieter this week, with the ANZAC Day holiday on Friday likely impacting liquidity and trading volumes.