Financial Markets Daily Report
10 April 2025
US President Trump announced a 90-day pause on the so-called “reciprocal" tariffs for all targeted countries, but still maintained the 10% general tariff rate and raised the tariff rate for China to 125% after both countries’ authorities escalated the tension. US stocks rallied and the S&P had its largest intraday gain in over 17 years (+9.5%).
- Elsewhere, US sovereign bond yields had a volatile session to ultimately close the day higher, as tight financial conditions forced some sales. The Fed minutes from its last meeting showed some members are concerned that the US could experience persistent higher inflation caused by the combined effect of enacted tariffs and retaliation by other nations.
- In the euro area, sovereign bond yields were almost flat, with German yields falling, as ECB policymakers said they will preserve financial stability amidst the trade war. However, this did not prevent euro are equities from experiencing losses. In currency markets, the EUR/USD was unchanged, and in commodities, Brent oil prices rose supported by the tariffs pause.
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