The global stock market rout continues to deepen today, with no clear signs of easing. Investor focus remains firmly on how the world is responding to the U.S.’s sweeping reciprocal tariffs. While equity markets crumble under the weight of growing uncertainty, developments out of Europe hint at a more constructive path—at least for now.
A cautiously optimistic signal came from Europe, where leaders appear intent on prioritizing negotiations over immediate retaliation. In Luxembourg, EU ministers convened to assess their next steps, while European Commission President Ursula von der Leyen emphasized that “Europe is always ready for a good deal.” She noted that the EU has offered “zero-for-zero tariffs” on industrial goods in its ongoing attempts to preserve open trade.
Despite this diplomatic posture, preparations for countermeasures are clearly underway. French Trade Minister Laurent Saint-Martin signaled that nothing is off the table, referencing the EU’s Anti-Coercion Instrument as a possible response. This mechanism would empower the bloc to restrict US service access or exclude American firms from public procurement within the EU—an unmistakable sign that Europe is readying its arsenal if negotiations break down.
On the other hand, the tone from the US remains uncompromising. White House trade adviser Peter Navarro told CNBC that Vietnam’s offer of zero tariffs is “meaningless” without addressing non-tariff barriers, such as intellectual property theft and value-added tax disparities. “That’s a small first start,” Navarro later added, making it clear that tariff elimination alone won’t satisfy the Trump administration’s trade goals.
This hardened stance suggests bilateral negotiations with the US will likely be prolonged and complex, especially with dozens of countries seeking exemptions or deals. The realization that tariff disputes are not simply about levies but about deeper structural trade practices is pushing expectations for a swift resolution further into the distance.
In the currency markets, movement is relatively more measured compared to equities. Sterling is the weakest performer so far today, followed by Loonie and Kiwi. On the stronger end, Swiss Franc leads, followed by Aussie and Yen. Dollar and Euro are positioning in the middle. For now, FX traders may be waiting for further clarity before taking decisive positions, especially as trade negotiations unfold and market volatility remains elevated.
Technically, Bitcoin is resuming the fall from 109571 today, and immediate focus is now on 73812 cluster support (38.2% retracement of 15452 to 109571 at 73617). Decisive break there will open up deeper correction to 61.8% retracement at 51405 in the medium term. That would be another drag on overall sentiment if realized.
In Europe, at the time of writing, FTSE is down -4.52%. DAX is down -4.67%. CAC is down -5.02%. UK 10-year yield is up 0.092 at 4.545. Germany 10-year yield is down -0.014 at 2.566. Earlier in Asia, Nikkei fell -7.83%. Hong Kong HSI fell -13.22%. China Shanghai SSE fell -7.34%. Singapore Strait Times fell -7.46%. Japan 10-year JGB yield fell -0.04 to 1.116.
Eurozone Sentix falls to -19.5, expectations collapse to -15.8 on trade war
Investor sentiment in the Eurozone suffered a dramatic collapse in April, as the Sentix Investor Confidence Index plunged from -2.9 to -19.5, far below expectations of -8.7 and marking the lowest reading since October 2023. Current Situation Index dipped slightly from -21.7 to -23.3.
The sharpest shock came from the Expectations Index, which nosedived from 18.0 to -15.8—its lowest level in 18 months and a staggering drop of -33.8 points, the second steepest fall ever recorded in Sentix history.
Sentix directly attributed the deterioration to US President Donald Trump’s sweeping new tariff measures, stating that last month’s optimism across Germany and the broader EU had “evaporated.”
The group warned that the early indicators point to a “massive problem,” with global economic stability seriously threatened. With Trump showing no signs of reversing course, Sentix cautioned that the tariff war is likely to “drag on longer than many assume,” fueling deeper disruptions.
Eurozone retail sales rise 0.3% mom in Feb, EU up 0.2% mom
Eurozone retail sales volumes rose by 0.3% mom in February, falling short of the expected 0.5% mom increase. The breakdown showed modest improvements across key segments: food, drinks, and tobacco sales were up 0.3% mom; non-food products excluding automotive fuel also rose 0.3% mom; while automotive fuel sales edged up 0.2% mom.
Retail sales across the broader EU climbed just 0.2% mom, with notable divergence among member states. Cyprus led with a 4.7% gain, followed by Estonia (+2.2%) and Lithuania (+1.7%). Meanwhile, retail trade volumes declined in Bulgaria (-1.7%), the Netherlands (-1.4%), and Poland (-1.2%).
ECB’s Stournaras: US Tariffs definitely deflationary, growth hit could reach 1%
Greek ECB Governing Council member Yannis Stournaras warned that the US reciprocal tariffs were “worse than expected” and a source of “unprecedented” global policy uncertainty.
In an interview with the Financial Times, he characterized the tariffs as “definitely a deflationary measure” for the Eurozone.
“A notable adverse impact on growth could lead to activity being much weaker than expected, dragging inflation below our targets,” he added.
While conceding it’s difficult to quantify the exact fallout, Stournaras projected a potential hit of between 0.5 to 1 percentage points to Eurozone growth.
He refrained from speculating on whether the threat justifies a 50bps rate cut but underscored the seriousness of the downside risks.
Japan’s real wages fall again despite nominal pay boost from bonuses
Japan’s nominal wages rose 3.1% yoy in February, a notable jump from downwardly revised 1.8%yoy in January, matching expectations.
However, this strong print was largely driven by a surge in special payments, which skyrocketed 77.4% yoy. Regular pay, considered a more stable indicator of wage trends, actually slowed to 1.6% yoy from the prior month’s 2.1% yoy, signaling only moderate momentum in base salary growth.
Despite the upbeat headline figure, real wages—which adjust for inflation—fell for the second consecutive month, down -1.2% yoy. This came as consumer inflation, as calculated by the labor ministry, remained elevated at 4.3% yoy, down slightly from January’s 4.7% yoy.
EUR/USD Mid-Day Outlook
Daily Pivots: (S1) 1.0889; (P) 1.0999; (R1) 1.1072; More…
EUR/USD is extending consolidations below 1.1145 and intraday bias remains neutral. Downside of retreat should be contained by 38.2% retracement of 1.0176 to 1.1145 at 1.0775 to bring rebound. On the upside, above 1.1145 will resume the rally from 1.0176 to 1.1213/74 key resistance zone next.
In the bigger picture, fall from 1.1274 (2024 high) has completed as a three wave correction to 1.0176. Rise from 0.9534 ready to resume. Decisive break of 1.1274 will target 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. Also, that will send EUR/USD through the multi-decade channel resistance will carries larger bullish implication. This will now be the favored case as long as 1.0731 support holds.
