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Treasury yields up, Ethereum down: Tariffs hit traditional and crypto

Treasury yields up, Ethereum down: Tariffs hit traditional and crypto

Looking at the evolving narrative around Trump’s tariff policies and their ripple effects across markets, currencies, commodities, and cryptocurrencies. The question at hand offers a rich tapestry of data points—ranging from US economic indicators to equity market movements, Treasury yields, and the intriguing interplay between Trump’s America-First agenda and the crypto sphere.

A blend of optimism for market resilience and a healthy scepticism about the long-term implications of protectionist policies shapes my perspective. Let’s dive into this multifaceted story, unpacking the facts, analysing the trends, and offering a grounded take on what it all means.

The weekend headlines suggesting that Trump’s reciprocal tariffs, slated for April 2, might be more targeted and flexible than feared have undeniably lifted global risk sentiment. This shift in tone is a breath of fresh air for investors who’ve been bracing for a blunt, across-the-board trade war that could throttle growth and stoke inflation. The idea that the administration might tailor these tariffs—perhaps sparing certain sectors or negotiating carve-outs—hints at a pragmatic streak beneath the bombastic rhetoric.

It’s a signal that Trump, now in his second term, may be tempering his approach with an eye on economic stability rather than just political theatre. Markets responded swiftly, with the S&P 500 climbing 1.8 per cent, the Dow Jones gaining 1.4 per cent, and the Nasdaq surging 2.3 per cent, driven by a 3.4 per cent rally in the “Magnificent Seven” megacaps—think Apple, Amazon, and Nvidia. This buoyancy reflects a collective sigh of relief, a belief that the tariff storm might not be as destructive as anticipated.

On the data front, the US March PMIs paint a nuanced picture. The uptick in the Services PMI is a welcome surprise, easing fears of a sharp economic slowdown and suggesting that the consumer-driven backbone of the US economy remains intact. Services, after all, account for over two-thirds of US GDP, so any sign of resilience here is a bulwark against recession chatter.

But the manufacturing PMI slipping back into contraction territory—below the 50 threshold—raises a red flag. The culprit? A tariff-related spike in materials costs. Manufacturers are already feeling the pinch of uncertainty, with supply chains recalibrating and input prices ticking up.

This divergence between services and manufacturing underscores a bifurcated economy: one part humming along, the other creaking under trade policy pressures. It’s a reminder that tariffs, even if targeted, don’t operate in a vacuum—they ripple through production networks, hitting some sectors harder than others.

The bond market’s reaction reinforces this cautious optimism tinged with concern. US Treasuries fell on Monday, pushing yields up across the curve. The 2-year yield rose 8.6 basis points to 4.035 per cent, while the 10-year yield climbed 8.8 basis points to 4.335 per cent. This uptick reflects a dialling back of expectations for Federal Reserve rate cuts, as investors digest the possibility that tariffs could keep inflation stubbornly above the Fed’s two per cent target.

Atlanta Fed President Raphael Bostic’s comments amplify this shift: he’s now projecting just one rate cut in 2025, down from two, and doesn’t see inflation hitting two per cent until early 2027. That’s a significant recalibration, signaling that the Fed might stay hawkish longer than hoped, especially if tariff-induced price pressures persist. The Fed’s reticence to push back on this market repricing suggests they’re in wait-and-see mode, letting the data—and Trump’s policy moves—dictate the pace.

The US Dollar Index, up 0.2 per cent to 104.30, its highest since early March, is another piece of the puzzle. A stronger dollar aligns with the narrative of a US economy holding its own amid global uncertainty, bolstered by higher yields and a perception of relative safety. But it’s a double-edged sword—while it boosts purchasing power for American consumers, it squeezes exporters and multinational corporations, potentially denting S&P 500 earnings down the line.

Commodities, meanwhile, tell a split story: gold dipped 0.4 per cent, perhaps as risk-on sentiment reduced its safe-haven appeal, while Brent crude rose 1.2 per cent to US$69.11 per barrel, buoyed by supply-side optimism or perhaps a flicker of demand recovery in Asia.

Speaking of Asia, the MSCI Asia ex-Japan index snapping a three-day losing streak with a 0.46 per cent gain is a subtle but telling sign. India’s SENSEX 30, up 1.40 per cent, has clawed back nearly all its year-to-date losses, showcasing the resilience of an economy less exposed to US trade whims.

Chinese stocks, too, caught a bid—Hang Seng up 0.91 per cent, CSI 300 up 0.51 per cent — possibly reflecting hopes that targeted tariffs might spare Beijing the worst. Yet early trading today showed mixed results across Asian indices, hinting that the relief rally might be fragile, contingent on further clarity from Washington.

Now, let’s pivot to crypto, where Trump’s influence is weaving an unexpected thread. Bitcoin spot ETFs saw a net inflow of US$84.17 million yesterday, marking seven straight days of gains. Fidelity’s FBTC led the pack with US$82.85 million, pushing its historical total to US$11.47 billion, while Bitwise’s BITB added US$19.23 million. Even with Ark Invest’s ARKB shedding $40.97 million, the broader trend is clear: institutional appetite for Bitcoin remains robust.

This resilience stands in contrast to Ethereum, which is grappling with its own challenges. ETH tested resistance at US$2,069 on Monday, buoyed by transaction fees hitting an all-time low—a double-edged sword. Lower fees might attract users, but they also signal waning network activity, a bearish undercurrent for a blockchain whose valuation hinges on usage. Grayscale’s research team nailed it: Ethereum’s price weakness—down 35 per cent in two months—ties directly to this fee slump and a broader crypto downturn sparked by Trump’s tariff threats.

The correlation between crypto and macroeconomics is tightening, and Trump’s policies are a big driver. US spot Ethereum ETFs have bled nearly US$390 million over 13 consecutive days of outflows, per Farside data, while on-chain metrics like transaction counts echo pre-election lows. Validators and token burners, who rely on fees, are feeling the pinch, undermining ETH’s value proposition.

Yet here’s where it gets fascinating: Trump Media and Technology Group (TMTG) is diving headfirst into this space, partnering with Crypto.com to launch “America-First Investment Funds” under the Truth.fi brand. These ETFs and SMAs, backed by a US$250 million TMTG investment and custodied by Charles Schwab, will span cryptocurrencies and “Made in America” securities—think energy and manufacturing. Trademarks like Truth.Fi Bitcoin Plus ETF and Truth.Fi US Energy Independence ETF scream Trump’s playbook: blending nationalism with financial innovation.

This move is a masterstroke of branding and ambition. By tying crypto to an America-First ethos, Trump’s team is betting on a narrative that could galvanise retail and institutional investors alike. It’s a counterpoint to Ethereum’s struggles—Bitcoin, with its ETF inflows, is riding a wave of momentum, while ETH languishes. The tariff flexibility hinted at over the weekend might bolster this venture further; if energy and manufacturing sectors get a pass, those “Made in America” funds could thrive, drawing capital away from more volatile altcoins like Ether.

Let me sum up. The US economy’s resilience, as seen in the Services PMI and equity gains, is real, but manufacturing’s woes and sticky inflation (thanks, tariffs) temper my optimism. The Fed’s hawkish tilt and a stronger dollar could cap upside, especially if global growth falters. In Asia, selective strength—India and China holding firm—suggests diversification might shield some markets, but the jury’s out on sustainability.

Crypto’s split fate—Bitcoin soaring, Ethereum stumbling—mirrors this dichotomy, with Trump’s Truth.fi gambit potentially reshaping the landscape. I’m cautiously bullish on equities and Bitcoin, skeptical of ETH’s near-term prospects, and watchful of how Trump’s tariff chess game unfolds. It’s a high-stakes story, and we’re only in the opening chapter.

 

Source: https://e27.co/treasury-yields-up-ethereum-down-tariffs-hit-traditional-and-crypto-20250325/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Global economic shake-up: Bitcoin hits US$90K, German bonds slide

Global economic shake-up: Bitcoin hits US$90K, German bonds slide

Same thing. I’ve been closely following the whirlwind of events that unfolded on Wednesday, March 6, 2025.

The global risk sentiment has undeniably taken a turn for the better, and the epicentre of this shift is Europe—specifically Germany—where an audacious fiscal proposal has sent shockwaves through the markets. German bunds, typically seen as the bedrock of stability in European fixed-income markets, are on track for their worst sell-off since 1990.

This isn’t just a blip; it’s a seismic event driven by Chancellor Friedrich Merz’s bold pledge to channel hundreds of billions of euros into defense and infrastructure, with a “whatever it takes” stance that echoes Mario Draghi’s famous 2012 vow to save the euro. The sheer scale of this proposal has caught market participants off guard, and the upside surprise has fueled a mix of optimism and unease.

Let’s unpack what’s happening in Europe first. The German bund sell-off reflects a dramatic repricing of risk. Yields on 10-year bunds spiked to 2.69 per cent, a level that signals investors are demanding higher returns to hold German debt amid this unprecedented fiscal expansion. The debt brake—Germany’s constitutional limit on borrowing—seems to have been tossed out the window, a move that’s both a departure from Berlin’s long-standing fiscal prudence and a gamble on future growth.

Posts on X suggest bond vigilantes, those hawkish investors who punish profligate governments with higher yields, are already circling, sensing fragility rather than strength in this shift. Yet, the equity markets are telling a different story. The MSCI Europe index climbed 0.8 per cent, buoyed by the prospect of massive government spending lifting economic activity.

The euro, too, has flexed its muscles, with EUR/USD soaring to a high of 1.0796 before settling at 1.0790—a robust 1.56 per cent gain. This currency surge reflects confidence in Europe’s economic prospects, at least for now, though the spectre of inflation and debt sustainability looms large.

Across the Atlantic, the US markets are enjoying a reprieve of their own, thanks to President Trump’s decision to delay automotive tariffs on Canada and Mexico by a month. This move, coupled with hints of exemptions for certain agricultural products, has dialed back fears of an all-out trade war that had been simmering since Trump’s re-election.

It’s a pragmatic step—autos and agriculture are deeply integrated across North America, and tariffs would’ve hit US consumers as much as they’d hurt exporters in Canada and Mexico. European carmakers, already reeling from earlier tariff threats, saw their shares stabilise, though the damage from Tuesday’s sell-off lingers. On the data front, the ISM Services Index came in stronger than expected, with a notable uptick in employment growth.

In my opinion, this is a reassuring signal that the US economy isn’t teetering on the edge of recession, though all eyes are now on Friday’s payrolls report for confirmation. The MSCI US index rose 1.1 per cent, with the Materials sector leading the charge at 2.8 per cent, likely reflecting optimism about infrastructure spending and industrial demand.

Bond markets in the US are also stirring. The 10-year Treasury yield climbed 7 basis points to 4.28 per cent, while the 2-year yield ticked up nearly 5 basis points to 4.00 per cent. This steepening yield curve suggests investors are betting on stronger growth and, potentially, stickier inflation down the road.

Commodities, meanwhile, are a mixed bag. Gold eked out a 0.1 per cent gain, propped up by a softer dollar, but Brent crude slid 2.5 per cent for a third straight session. OPEC+’s plan to ramp up output in April is weighing on oil prices, despite the improving risk sentiment elsewhere. It’s a reminder that not every corner of the market is riding the same wave of optimism.

Turning to Asia, China’s National People’s Congress (NPC) has set an ambitious 5 per cent growth target for 2025, a number that’s raised eyebrows and sparked hopes of more stimulus. The Hang Seng Index in Hong Kong surged 2.8 per cent on Wednesday and looks poised for further gains today, Thursday, March 6.

Asian equity indices are mostly in the green, reflecting a broader appetite for risk. China’s policymakers seem determined to turn the tide after years of economic headwinds, and markets are lapping it up—for now. Whether Beijing can deliver remains an open question, but the mood is unmistakably upbeat. US equity index futures, however, are pointing to a softer open, suggesting some profit-taking or caution after Wednesday’s rally.

Then there’s the crypto saga, which is grabbing headlines of its own. Bitcoin staged a remarkable 8 per cent surge, reclaiming the US$90,000 level after dipping below US$80,000 just five days ago. This rollercoaster ride is fuelled by speculation around Trump’s rumoured US crypto reserve plan—a bold idea that’s got the market buzzing. Technical indicators like the Directional Movement Index (DMI) and Ichimoku Cloud are flashing bullish signals, hinting that buyers are firmly in the driver’s seat.

The US$100,000 mark is tantalisingly close, but volatility is Bitcoin’s middle name, and the upcoming White House Crypto Summit could either propel it higher or spark a pullback. Speaking of the summit, Cardano’s Charles Hoskinson found himself snubbed from the invite list, though he’s brushing it off, claiming he’s still a behind-the-scenes player in shaping US crypto policy.

Michael Saylor, meanwhile, is doubling down on Bitcoin as the “only neutral asset” for a US reserve, dismissing XRP as a mere digital token. Ethereum, too, is on the mend, climbing from its US$2,000 support zone and eyeing a break above US$2,350. A rising channel on the hourly chart suggests momentum is building, but resistance at US$2,275 and $2,350 will test its mettle.

So, what’s my take on all this? I’m struck by the sheer pace of these developments. Europe’s fiscal gambit is a game-changer—Germany’s shift from fiscal hawk to big spender could jolt the continent out of its economic doldrums, but it’s a high-stakes bet. The bund sell-off is a warning shot; if yields keep climbing, borrowing costs could choke off the very growth Merz is chasing.

Yet, the equity rally and euro’s strength suggest markets are willing to give it a chance. In the US, Trump’s tariff delay is a savvy move—it buys time and cools trade tensions, though it’s hardly a resolution. The economy looks resilient, but the payrolls report will be the real tell. Asia’s optimism hinges on China’s ability to follow through, and crypto’s wild ride is a microcosm of the broader risk-on mood.

If I had to pick a standout, it’s Germany’s bold pivot. It’s shaking up Europe in a way we haven’t seen in decades, and the ripple effects—higher yields, a stronger euro, buoyant stocks—could redefine the region’s role in the global economy. But risks abound: inflation, debt overload, and geopolitical uncertainty could derail this fragile recovery. For now, though, the world’s investors are riding the wave, and it’s one heck of a story to watch unfold.

 

 

Source: https://e27.co/global-economic-shake-up-bitcoin-hits-us90k-german-bonds-slide-20250306/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

TradFi feels the chill, crypto heats up: US slowdown meets Asia’s digital surge

TradFi feels the chill, crypto heats up: US slowdown meets Asia’s digital surge

The recent retreat in global risk sentiment, driven by a cocktail of weaker-than-expected US economic data and shifting investor moods. The numbers coming out of the US last week painted a concerning picture: manufacturing growth slowed more than anticipated, services took an unexpected dive into contraction territory, and consumer sentiment, as measured by the University of Michigan, slumped to its lowest level since November 2023.

Add to that the spectre of rising inflation expectations, and it’s no surprise that markets reacted with a collective wince. Major US equity indices ended Friday in the red, with the MSCI US index dropping 1.8 per cent, led by steep declines in Consumer Discretionary (down 2.7 per cent) and Information Technology (down 2.5 per cent). Treasury yields also pulled back, with the 10-year dipping seven basis points to 4.42 per cent and the 2-year falling 6 basis points to 4.20 per cent.

Meanwhile, the US Dollar Index edged up 0.2 per cent, hitting a high of 106.74 before settling at 106.61. Gold, despite a slight 0.1 per cent dip on Friday due to profit-taking, is still on track for an eighth consecutive weekly gain, buoyed by safe-haven demand tied to uncertainty over President Donald Trump’s tariff proposals. Brent crude, however, slid 2.7 per cent, reflecting jitteriness over a potential Ukraine peace deal.

Over in Asia, the mood was a bit more upbeat, with the MSCI Asia ex-Japan index climbing 1.76 per cent to notch a sixth straight week of gains, powered by a rally in Chinese tech stocks—Hang Seng soared 4.0 per cent, CSI 300 rose 1.3 per cent, and TAIEX gained 1.0 per cent. Germany’s election results, announced this morning, aligned with polls, with Friedrich Merz’s conservative bloc taking nearly 29 per cent and the far-right Alternative for Germany doubling its share to over 20 per cent. Asian markets opened mixed today, but US equity futures suggest a rebound might be on the horizon.

Let’s unpack this a bit.

TheUS data from S&P Global was a double whammy—manufacturing PMI for February came in weaker than economists had hoped, signaling a slowdown in one of the economy’s key engines. Even more surprising was the services PMI, which flipped into contraction after months of resilience. This isn’t just a blip; it’s a red flag that the US economy might be losing steam faster than anticipated.

The University of Michigan’s sentiment index dropping to its lowest in over a year only adds fuel to the fire. Consumers are clearly rattled, and the culprit seems to be inflation expectations creeping higher. With Trump’s tariff threats looming large—potentially slapping hefty duties on imports from China and elsewhere—households and businesses alike are bracing for higher costs. That fear is palpable in the equity markets, where riskier sectors like Consumer Discretionary and Info Tech bore the brunt of the sell-off.

Investors appear to be rotating out of growth stocks and into safer bets, as evidenced by the drop in Treasury yields. Lower yields typically signal a flight to safety, though the modest uptick in the US Dollar Index suggests some lingering confidence in the greenback as a haven currency amid global uncertainty.

Gold’s performance is particularly telling. Even with Friday’s slight retreat, its eight-week winning streak underscores how jittery investors are. Trump’s tariff talk isn’t just a domestic issue—it’s a global one. If he follows through, we could see supply chain disruptions, higher input costs, and a ripple effect across commodity markets. Gold thrives in times like these, and its resilience despite profit-taking shows that safe-haven demand isn’t going anywhere.

Brent crude’s decline, on the other hand, reflects a different dynamic. The prospect of a Ukraine peace deal could ease geopolitical tensions and reduce oil supply risks, but the uncertainty is keeping traders on edge. A 2.7 per cent drop isn’t catastrophic, but it’s enough to signal that energy markets are grappling with mixed signals.

Asia’s story offers a glimmer of hope amid the gloom. The MSCI Asia ex-Japan index’s 1.76 per cent bounce on Friday, driven by Chinese tech giants, suggests that some pockets of the global economy are still finding their footing. The Hang Seng’s 4.0 per cent surge was a standout, fueled by optimism around China’s tech sector, which has been clawing back ground after years of regulatory crackdowns.

The CSI 300 and TAIEX followed suit, though gains were more modest at 1.3 per cent and 1.0per cent, respectively. This resilience could be a sign that Asian markets are decoupling—at least temporarily—from US woes. China’s stimulus measures and a weaker yuan might be giving exporters a boost, while tech firms benefit from renewed investor appetite. That said, Monday’s mixed start in Asian equities hints that the rally might not have legs unless US markets stabilise.

Switching gears to Europe, Germany’s election results are worth a closer look. Friedrich Merz’s conservative bloc securing nearly 29 per cent of the vote isn’t a shock—polls had been pointing that way for weeks. What’s more eyebrow-raising is the Alternative for Germany (AfD) doubling its share to over 20 per cent. The far-right’s gains signal a growing populist undercurrent that could complicate Merz’s coalition-building efforts.

A Merz-led government might lean toward fiscal conservatism and tougher trade stances, which could clash with Trump’s tariff agenda and add another layer of uncertainty to global markets. For now, though, the immediate market impact seems muted—Asian equities didn’t flinch much this morning, and US futures are pointing to a higher open, suggesting traders are more focused on domestic data than Berlin’s political shuffle.

Then there’s the crypto angle, which feels like a subplot that’s gaining traction. Deribit’s push into Hong Kong is a fascinating development. The city, alongside Singapore, is racing to become Asia’s crypto hub, and Trump’s pro-crypto rhetoric is fanning the flames. Deribit’s chief commercial officer, Jean-David Péquignot, hit the nail on the head—Hong Kong’s appeal lies in its status as a financial nexus and its growing pool of family offices and asset managers dabbling in digital assets. This isn’t just about retail speculation anymore; institutional interest is picking up, and Hong Kong wants a piece of the pie.

Singapore’s in the game too, with both cities rolling out regulatory frameworks to lure crypto firms. The broader market, however, is showing some cracks—AI Agents like ai16z, Fartcoin, and Turbo tanked over five per cent in the last 24 hours, though AIXBT bucked the trend with a 4.06 per cent gain. Ethereum’s holding steady, up 0.58 per cent, thanks in part to buzz around the Ethereum Ecosystem Conference.

But the real wild card is Ye’s “Swasticoin” stunt. His now-deleted posts teasing a token launch next week—after years of slamming similar projects—reek of provocation. Whether it’s a serious move or just Kanye being Kanye, it’s a reminder of how chaotic and hype-driven the crypto space can be. Investors would be wise to steer clear until the dust settles.

So, what’s my take on all this?

The retreat in global risk sentiment feels like a natural response to a US economy that’s flashing warning signs. Manufacturing and services data don’t lie—growth is slowing, and consumers are spooked. Trump’s tariff threats are amplifying the unease, pushing investors toward gold and away from equities. Asia’s resilience is a bright spot, but it’s fragile—dependent on China’s tech momentum and broader market stability.

Germany’s election adds a political twist, though it’s not the main event yet. And the crypto boom in Hong Kong and Singapore? It’s exciting, but the Ye drama underscores the sector’s volatility. We’re in a choppy phase—markets hate uncertainty, and there’s plenty of it to go around.

My gut says we’ll see more turbulence before any clear trend emerges, but if US futures are right, a short-term bounce could be in the cards. Long term, though, it’s anyone’s guess until we get more clarity on Trump’s policies and the US economic trajectory. Stay sharp—this ride’s far from over. Hope you like my observations for 24 February 2025.

 

Source: https://e27.co/tradfi-feels-the-chill-crypto-heats-up-us-slowdown-meets-asias-digital-surge-20250224/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j