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The sell-off provoked by retaliatory tariffs shows no signs of slowing down, and U.S. indices have dropped to levels not seen since the mini-crash of August 2024. The S&P500 has experienced its worst two-day run since March 2020 (-5.4%), while the Nasdaq (-5%), DJIA (-4.3%), and Russell 2000 (-5.7%) have also lost ground.
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European markets are also ending the week deep in the red. The German DAX has dropped by -4.95%, the French CAC40 by -4.25%, and the British FTSE 100 by -4.95%.
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China, without attempting negotiations, announced retaliatory tariffs of 34% on all U.S. products, effective April 10. According to Trump, "The Chinese played it wrong, they panicked."
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The escalation of the trade war between China and the U.S. has worsened the declines in technology stocks (NVDA.US: -7%, TSLA.US: -9%, AAPL.US: -5.6%) and major financial institutions (JPM.US: -6.9%, GS.US: -6.7%, BAC.US: -7.5%).
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The consequences of the tariffs will be greater than previously expected, raising the risk of higher inflation and weaker economic growth, as signaled by Jerome Powell during a press conference in Virginia. However, Powell emphasized that changes in monetary policy require more clarity from economic data, and the Fed will continue with 'wait and see' approach.
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Donald Trump extended the period for negotiating the potential sale of TikTok to U.S. entities by 75 days. The U.S. president previously suggested that the sale could be used as a bargaining chip for tariff reductions with China.
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The change in non-farm payrolls (NFP) in March exceeded expectations (228k, forecast: 140k). However, the data carries mixed implications due to a large revision of the previous reading downward (from 151k to 117k). Unemployment rose as expected from 6.6% to 6.7%.
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On the forex market, the dollar (USDIDX) is recovering from its recent selloff, strengthening by 1% against the G10 currency basket. The most depreciated currencies are those from the Antipodes (AUDUSD: -4.7%, NZDUSD: -3.64%) and the Norwegian krone (USDNOK: +4.11%). The Swiss franc (USDCHF: +0.05%) resists the declines the most, while USDJPY and USDCAD lose around 0.8%. The euro has depreciated 0.9% against the dollar (EURUSD: 1.095).
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The broad commodity market is also retreating. Gold has lost 2.9% to $3,023 per ounce, silver is down 7.2% to $29.60 per ounce. Brent and WTI crude oil have dropped another 6.4% and 7.3%, respectively, and NATGAS contracts are trading 7% lower.
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Key cryptocurrencies are experiencing small rebounds. Bitcoin has gained 2.65% to $84,500, and Ethereum has increased by 1.3% to $1,822.
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