📅 The Week Ahead: Liberation Day or Market Meltdown? | by NordFX | Coinmonks | Mar, 2025

With just one trading day left in Q1, risk sentiment has collapsed across Asia and Europe. 📉
🇯🇵 Nikkei fell 4%, European indices are all red, and over 550 EuroStoxx 600 stocks are down. Investors are bracing for President Trump’s tariff announcement on Wednesday.

📈 Gold surged by $36 and is now above $3,122/oz, as markets flee to safe havens.
🇺🇸 Meanwhile, US futures point to a sharp drop in the S&P 500 — not exactly a celebration for Liberation Day.

🎢 Q1 Recap:
Markets have been shaken by Trump’s tariff agenda.
📊 Winners:

• EuroStoxx 50: +9%
• DAX: +12%
• FTSE 100: +6%

📉 Losers:

• S&P 500: -5%
• Nasdaq: -10% (officially in correction territory)

Even the DAX, which had led early gains, lost steam in March. Carmakers and luxury stocks were hit hardest.

💥 US Consumer Stocks Hit Hard
Pain is spreading beyond tech:

• Delta: -27%
• United Airlines: -25%
• Ralph Lauren: -20%
• Lululemon: -19%

👉 This shows tariffs are squeezing US consumers — and it may backfire on Trump politically.

🔮 What’s Next?

1️⃣ Trump’s Tariff Plan (2 April)
💣 A major risk to global markets. Tariffs could:

• Push US inflation up by 1%
• Cut GDP by 0.8%
• Drive the dollar even lower (USD is G10’s worst performer in 2025)
• Boost safe havens like 🪙 gold and 🪙 ruble (top FX performer so far this year!)

⚠️ The market sees Trump’s policies as weakening the US globally — hurting consumers, raising costs, and risking a longer downturn.

But… analysts are still bullish on the S&P 500
🧠 FactSet expects a +21% gain over the next year, led by tech and consumer discretionary stocks.
Earnings season will tell us whether this optimism is justified.

If tariffs exceed 15%, US GDP could shrink by over 1%. That would be a big red flag 🚩 for stocks.

💡 Tariff trade so far:

• 🔻 US stocks
• 🔻 USD
• 🔼 Gold
• 🔼 US bonds

2️⃣ US Jobs Report (Friday)
📌 Forecast:

• +138k nonfarm payrolls
• Unemployment: 4.1%
• Wages: +4% YoY

🌪️ There’s potential for a big upside surprise due to:

• Rebound after weather disruptions
• Reversals of gov’t grant freezes
• Front-loading of hiring ahead of tariffs

👀 Watch for market reaction — especially if consumer sentiment picks up.

3️⃣ EU Inflation (CPI)
🇪🇺 EUR/USD is holding below 1.0830, but inflation data could shake things up.

• Headline CPI expected at 2.2% (down from 2.3%)
• Core CPI at 2.5% (down from 2.6%)

📉 If inflation surprises to the downside, ECB may act sooner. Rate cut odds:

👉 Lower CPI = weaker euro, especially if dollar stabilises after tariff announcement.

📊 Key Themes This Week:

• Tariffs = 🔥 short-term volatility
• Jobs = 📈 signs of resilience
• Inflation = 🏦 central bank decisions ahead