Testing the limits
In Short
US President Trump continues to test the limits of markets and the economy. The Liberation Day' and the escalation of the trade war against China sent equity markets into a tailspin (S&P500 -14% between end-March and 8 April). Liquidity needs and concerns about the USD status contributed to a simultaneous Treasury sell-off, leading Trump to trigger a 90-day pause on 'reciprocal' tariffs, giving way to a market relief rally. The US trade war with China escalated regardless. And just as the markets had stabilised somewhat, Trump lashed out at Fed Chair Powell on 20 April, triggering another setback for equities, the dollar and Treasuries - only to backtrack again.
