Markets:
S&P 500 up 9%, Nasdaq up 11.5% - SPX gain is the most since 2008Gold up $114 to $3098 -- largest one-day gain in five yearsWTI crude oil up $3.22 to $62.80US 10-year yields up 10 bps to 4.35%AUD leads, CHF lagsWhat a day.
Coming into the day, there were some intense fears about the bond market after yields jumped in Asia in a move that was pointing to heavy financial stress and disorderly unwinds in trades. US 30-year yields briefly rose above 5% from 4.32% at the start of the week in a move that started to look like the one that led to the downfall of Liz Truss.
With that, stock futures were beaten up again and there were real fears of a crash.
That sentiment appeared to get Trump's attention. His comments later in the day suggest he saw the bond market and comments from Jamie Dimon about a recession. He said people were scared and 'yippie' so he decided to pause tariffs for 90-days, save for a 10% baseline. China wasn't so lucky as their rate was upped to 125% but even with that he later said there would be negotiations with China, highlighting that this could also be temporary.
Trump himself hinted at an easing earlier in the day saying to 'be cool' and that stock markets would rise. He made the announcement about the tariffs on Truth Social and that set off a huge reversal in markets and enormous stock market gains. USD/JPY rose 300 pips in a near-straight line and AUD/USD rose 150 pips.
Aside from versus the yen and Swiss franc, the US dollar sold off as global growth concerns abated.
All that said, this is just one chapter and 10% tariffs on the world and 125% on China is certainly worse than what was expected a few weeks ago. Big questions remain on whether the 10% level is now the floor and on how the US intends to complete negotiations with +70 countries within 90 days. There are plenty of indications that they're making it all up as they go along; and that we're all along for the ride.
For now though, the bulls get to score a major victory.
This article was written by Adam Button at www.forexlive.com. Read More Details
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