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Market wrap: A week of cautious optimism amid shifting global sentiments

Market wrap: A week of cautious optimism amid shifting global sentiments

The past week in global financial markets has been a fascinating blend of cautious optimism, policy-driven volatility, and renewed enthusiasm in certain asset classes. President Donald Trump and Treasury Secretary Scott Bessent’s more conciliatory tone in recent days has played a significant role in easing market tensions, particularly surrounding the US-China trade war. This shift in rhetoric has helped improve global risk sentiment, allowing equity markets to notch gains and safe-haven assets like gold to retreat.

Meanwhile, economic data, such as the University of Michigan Consumer Sentiment survey for April, paints a more complex picture, with rising inflation expectations signalling potential challenges ahead. The cryptocurrency market, particularly Bitcoin, has also captured attention, with a sharp rebound and record-breaking inflows into Bitcoin exchange-traded funds (ETFs).

As we look forward to a data-heavy week and the Federal Open Market Committee (FOMC) meeting on May 7, 2025, markets are poised for potential volatility, driven by earnings reports, economic indicators, and evolving geopolitical dynamics.

A softer tone from Washington sparks market relief

The improvement in global risk sentiment can be largely attributed to a de-escalation in US-China trade tensions. President Trump’s remarks that tariffs on China would be reduced “substantially”, though “not to zero,” coupled with Treasury Secretary Scott Bessent’s assertion that high tariffs are unsustainable, have provided markets with much-needed reassurance.

Bessent’s comments at a private investor summit hosted by JPMorgan Chase, where he described negotiations with Beijing as a “slog” but emphasised a desire for a “big, beautiful rebalancing” of trade, have fuelled hopes of a less confrontational approach.

This softer rhetoric marks a departure from earlier threats of 125 per cent tariffs on Chinese goods, which had triggered significant market sell-offs and wiped nearly US$19 trillion off global equity markets since February. The suggestion that Beijing is considering exempting some US imports from its retaliatory tariffs further bolstered investor confidence, contributing to a relief rally across global equities.

On Friday, major US equity indices reflected this improved sentiment. The S&P 500 gained 0.74 per cent, the Nasdaq climbed 1.26 per cent, and the Dow eked out a modest 0.05 per cent increase. The MSCI Asia ex-Japan index also ended the day up by 0.4 per cent, signalling a broader recovery in risk appetite.

Asian markets continued this trend into Monday morning, with indices trading higher, though US equity futures suggested a softer opening, hinting at potential consolidation after last week’s gains. The market’s reaction underscores the sensitivity to policy signals from the Trump administration, particularly as investors grapple with the uncertainty of on-again, off-again tariff threats.

Consumer sentiment and inflation fears cast a shadow

While markets have responded positively to the prospect of easing trade tensions, economic data reveals underlying concerns. The final University of Michigan Consumer Sentiment survey for April showed a slight improvement, rising to 52.2 from a preliminary reading of 50.8.

However, this figure remains near historic lows, reflecting deep-seated pessimism among American consumers. The survey highlighted a sharp deterioration in inflation expectations, with one-year inflation forecasts jumping to 6.5 per cent—the highest since 1981—from 5.0 per cent in March. This surge in inflation fears is largely tied to President Trump’s tariff policies, which consumers and economists alike worry could drive up prices and erode purchasing power.

The University of Michigan survey noted that the decline in sentiment was “pervasive and unanimous” across age, income, education, geographic region, and political affiliation, underscoring the widespread unease. Consumers cited “frequent gyrations in economic policies” as a key factor, making it difficult to plan for the future. This sentiment echoes broader business surveys, which have flagged uncertainty as a major hurdle for investment and growth.

The rise in inflation expectations poses a particular challenge for the Federal Reserve, which has already cut rates by 100 basis points since September 2024, bringing the benchmark rate to a range of 4.25 per cent–4.50 per cent. With the FOMC meeting scheduled for May 7, 2025, and Fed officials entering their communications blackout period, markets are bracing for clues on how the central bank will navigate this delicate balance between growth and inflation.

Bond yields and currency markets reflect cautious stability

The bond and currency markets have also reacted to the shifting landscape. Yields on US Treasuries eased on Friday, with the 10-year yield falling 5 basis points to 4.25 per cent and the 2-year yield dropping 3 basis points to 3.76 per cent. This decline suggests a reduction in investor fears about the inflationary impact of tariffs, as well as a partial unwind of earlier concerns about the creditworthiness of US debt.

Citadel’s Kenneth Griffin recently warned that the Trump administration’s policies could undermine confidence in US Treasuries, a sentiment that had driven yields higher earlier in the month. The recent pullback in yields indicates that markets are, for now, taking the administration’s softer tone at face value.

The US Dollar Index (DXY) remained largely unchanged at 99.47, reflecting a stabilisation after earlier volatility. The dollar had surged earlier in the week as risk sentiment improved, but safe-haven currencies like the euro, Swiss franc, and Japanese yen weakened slightly.

Gold prices, which had hit record highs above US$3,500 per ounce amid trade war fears, fell two per cent on Friday to around US$3,343 per ounce, as reduced demand for safe-haven assets and potential profit-taking weighed on the precious metal. These movements highlight the market’s attempt to find equilibrium amid competing forces of optimism and caution.

Bitcoin’s resurgence steals the spotlight

While traditional markets grappled with trade and inflation concerns, the cryptocurrency market has been electrified by Bitcoin’s rebound above US$90,000, reaching a 24-hour high of US$94,535. This 12.48 per cent surge in just three days has reignited enthusiasm among investors, with Bitcoin ETFs playing a pivotal role in driving the rally.

BlackRock’s IBIT and Fidelity’s FBTC have seen combined inflows of over US$2.3 billion in the past two weeks, with IBIT now holding more than 280,000 BTC and FBTC posting its strongest weekly inflows since its January 2025 launch. Total Bitcoin ETF assets under management have surpassed US$70 billion, underscoring the growing institutional adoption of cryptocurrencies.

The surge in Bitcoin ETF inflows has absorbed newly mined supply at an unprecedented rate, fuelling speculation of a major price breakout in the coming months. Bitcoin open interest has also jumped 20 per cent over the past 20 days, reachingAscend to US$26 billion, signalling aggressive positioning by traders.

However, this leverage-driven rally carries risks, as high leverage can amplify both gains and losses. Analysts warn that while sentiment is bullish, the market remains vulnerable to volatility, particularly if macroeconomic conditions shift or regulatory developments, such as the SEC’s approval of ProShares’ XRP futures ETFs on April 30, 2025, introduce new dynamics.

Grayscale’s push for SEC approval of Ethereum ETF staking adds another layer of intrigue to the crypto landscape. The firm argues that staking could unlock US$61 million in rewards, strengthen Ethereum’s network, and enhance US competitiveness in the global crypto market. These developments highlight the growing mainstream acceptance of digital assets, even as regulatory hurdles persist.

Looking ahead: A data-heavy week and earnings season

The week ahead promises to be pivotal for markets, with a packed US economic calendar and earnings reports from 41 per cent of S&P 500 market cap. Key data releases, including employment figures, retail sales, and industrial production, will provide critical insights into the health of the US economy amid tariff uncertainty.

The FOMC’s May 7 meeting looms large, with markets anticipating that the Fed will hold rates steady but scrutinising any hints about future policy in light of rising inflation expectations. Corporate earnings, particularly from tech giants like Alphabet, will also shape market sentiment, with 73 per cent of S&P 500 companies reporting first-quarter results beating consensus expectations so far.

In conclusion, the past week has been a microcosm of the broader market environment: a delicate dance between optimism and uncertainty. President Trump and Treasury Secretary Bessent’s softer tone has provided a reprieve, but consumer sentiment and inflation fears remind us of the challenges ahead.

Bitcoin’s resurgence and the crypto market’s institutional embrace add a layer of excitement, but leverage risks loom. As we navigate a data-heavy week and the FOMC’s next moves, investors must remain vigilant, balancing hope with the reality of a complex and evolving global landscape.

 

Source: https://e27.co/market-wrap-a-week-of-cautious-optimism-amid-shifting-global-sentiments-20250428/

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

Market wrap: A week of retreat and reflection

Market wrap: A week of retreat and reflection

The numbers tell a story of retreat: major US equity indices took a beating on Thursday, with the S&P 500 sliding 1.5 per cent and the Nasdaq plunging 2.8 per cent. Nvidia, a darling of the tech world, stumbled 8.4 per cent despite exceeding earnings expectations—a sign that even stellar results can’t always appease jittery investors.

Meanwhile, the bond market stirred, with the 10-year Treasury yield ticking up 3 basis points to 4.28 per cent and the 2-year yield edging to 4.07 per cent. The US Dollar Index surged 0.8 per cent, its biggest one-day leap in two months, fuelled by tariff headlines that have markets on edge as the March 4 deadline looms for Canada and Mexico, alongside whispers of a 10 per cent hike for China.

Gold, often a safe haven, didn’t escape the pressure, dropping 1.1 per cent to its lowest in over two weeks, while Brent crude bucked the trend, climbing 2.1 per cent amid supply worries tied to Trump’s revocation of a US oil major’s license in Venezuela. Across the Pacific, the MSCI Asia ex-Japan index fell 0.88 per cent, poised for its first weekly loss in seven weeks, with Asian equities mostly lower in early Friday trading.

The cryptocurrency space mirrored this gloom. Bitcoin cratered below US$80,000 on February 28, hitting US$79,666—its weakest since November 11, 2024—shedding over 5 per cent in a single day and 25 per cent since its mid-December peak above US$105,000. Ethereum fared even worse, tumbling to a 14-month low of US$2,150, down 20 per cent in a week, hammered by risk aversion and institutional selling.

BlackRock, the world’s largest asset manager, offloaded 30,280 ETH across four transactions to Coinbase Prime, while its iShares Ethereum Trust dumped US$70 million worth of ETH. Other heavyweights like Fidelity, Grayscale, and Bitwise pulled US$24.5 million from their Ethereum accounts, amplifying the sell-off. The Crypto Fear and Greed Index plunged to 10, signalling “extreme fear” not seen since 2022’s market crash.

Yet, amid this chaos, Ethereum’s derivatives market offers a glimmer of resilience: 30-day ETH futures trade at a 7 per cent premium over spot prices, up from 6 per cent two days ago, and options skew at -2 per cent suggests whales aren’t panicking—echoing a recovery pattern from a 38 per cent drop on February 3.

My take: Navigating the storm

This week feels like a wake-up call—a reminder that markets, for all their sophistication, are still tethered to human sentiment and political whims. Let’s unpack it. The retreat in global risk sentiment isn’t a bolt from the blue; it’s been brewing in a cauldron of events that sparked profit-taking. Consumer confidence dipped below expectations on Tuesday, a red flag for an economy that thrives on spending.

Then came Nvidia’s earnings—objectively strong, yet not dazzling enough to halt the sell-off in the AI complex. Investors seem to be recalibrating, perhaps realising that the semiconductor boom (phase 1 of the AI story) might be giving way to infrastructure hyperscalers (phase 2) and software applications (phase 3). Add to that a softening labor market—possibly a ripple from the Trump administration’s Department of Government Efficiency culling—and the stage was set for Thursday’s tumble.

The tariff saga is the elephant in the room. With Trump pushing ahead on Canada, Mexico, and China, markets are grappling with uncertainty. Tariffs could jolt supply chains, inflate costs, and squeeze corporate margins—hardly a recipe for bullishness.

The US Dollar’s jump reflects this tension, pressuring risk assets like equities and crypto. Gold’s decline surprises me less; it’s a crowded trade, and profit-taking was overdue. Brent crude’s rise, though, underscores how geopolitical moves—like Trump’s Venezuela decision—can override broader risk-off vibes in specific sectors.

Crypto’s woes deserve a closer look. Bitcoin’s drop below US$80,000 feels like a gut punch to the bulls who saw it as a Trump-era golden child. Hopes of US support for digital currencies are fading, overshadowed by tariff uncertainties and a US$1.5 billion Ether hack that’s spooked the market.

Ethereum’s plunge to US$2,150 is uglier still, driven by institutional exits that signal distribution, not just panic. BlackRock’s moves are telling—when the biggest player starts unloading, others follow. Yet, the derivatives data intrigues me. That 7 per cent futures premium and neutral options skew suggest a core of confidence among big players, hinting at a potential floor. History backs this up: Ethereum’s 38 per cent drop on February 3 was a prelude to a swift rebound. Could we see that again? It’s possible, but not guaranteed.

So, where does this leave us? I see a few paths forward. First, fixed income is shining as a stabiliser. With the 10-year yield at 4.28 per cent, bonds are outpacing the S&P 500 year-to-date—a rare feat that underscores their role in turbulent times. I’ve long felt US stocks were pricey; the S&P 500’s consolidation feels healthy, a chance to buy the dip if you’re nimble.

The Mag7’s 9 per cent year-to-date loss stings, but the Other 493 stocks holding a 3 per cent gain show resilience outside the tech bubble. Timing matters—today’s PCE inflation data could tip the scales. A hotter-than-expected read might fuel more selling as February closes, so brace for volatility.

China’s an outlier worth watching. The February 17 Symposium, chaired by President Xi, has sparked optimism about private enterprise, driving a sharp rally. But technicals scream overheating—RSI and MACD indicators are flashing red. I’d approach this via derivatives—options or futures—to cushion downside risk. The move’s been too fast to dive in blind.

On the AI front, I’m not writing it off. The Nvidia slump doesn’t kill the story; it shifts it. Semiconductors are cooling, but infrastructure (think cloud giants) and software (AI apps) are heating up. Rotation, not collapse, is my read. Crypto’s trickier—Bitcoin and Ethereum are battered, but the derivatives hint at a bottoming process. I wouldn’t bet the farm yet; “extreme fear” can linger. Still, if you’re a contrarian, nibbling at these levels could pay off if March brings clarity on tariffs and policy.

The Bigger Picture

Zooming out, this week encapsulates 2025’s volatility. Trump’s tariff plans, economic softening, and sector rotations are rewriting the playbook. Investors face a choice: hunker down in bonds and wait, chase China’s momentum with caution, or hunt for bargains in beaten-down tech and crypto.

I lean toward a balanced approach—some fixed income for safety, selective equity dips (O493 over Mag7 for now), and a watchful eye on crypto derivatives for signs of life. The PCE data today could be a pivot point; a benign number might steady nerves, while a spike could deepen the rut.

Either way, this isn’t a crisis—it’s a correction with opportunities for those who can stomach the ride.

 

Source: https://e27.co/market-wrap-a-week-of-retreat-and-reflection-20250228/

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

Markets on edge as jobs data, currency shifts, and crypto milestones shape the week

Markets on edge as jobs data, currency shifts, and crypto milestones shape the week

7 February 2025 marks a pivotal moment for global markets as investors grapple with a confluence of critical economic indicators, shifting currency dynamics, and transformative developments in the cryptocurrency space. Wall Street traders are on edge, awaiting the release of US non-farm payroll data that could illuminate the Federal Reserve’s next move on interest rates, while the Japanese yen surges to its highest level since early December, buoyed by hawkish comments from a Bank of Japan official.

Meanwhile, Amazon’s disappointing profit projections send ripples through after-hours trading, and the cryptocurrency market sees increased institutional engagement alongside significant regulatory milestones. As a journalist deeply attuned to the pulse of global finance, I believe this week underscores the intricate balance between risk and opportunity, with profound implications for investors, policymakers, and the broader economy.

Let’s begin with the US jobs data, which has become the focal point for Wall Street traders. The non-farm payroll report is more than just a snapshot of employment trends; it is a critical barometer for the Federal Reserve’s monetary policy trajectory. A weak print could reignite expectations for further interest rate cuts, providing a much-needed boost to risk assets and potentially alleviating some of the pressure on equity markets.

Conversely, a stronger-than-expected report might temper hopes for additional easing, reinforcing the Fed’s cautious stance on inflation. The stakes are high, particularly as Wall Street also anticipates a revision to previous job growth figures—a development that could further complicate the Fed’s decision-making process.

The interplay between these data points highlights the fragility of the current economic recovery, with markets hanging on every decimal point. From my perspective, the Fed faces an unenviable task: balancing the need to support growth while guarding against inflationary pressures. A misstep here could have profound consequences, not just for the US economy but for global financial stability.

The new norm: Stabilising global risk sentiment in a volatile market

Beyond the jobs data, the broader US market landscape offers mixed signals. The MSCI US index edged higher by 0.4 per cent, with the Consumer Staples sector outperforming at 0.9 per cent. This resilience in defensive sectors suggests that investors are hedging their bets, seeking safety amid uncertainty.

At the same time, US Treasury yields ticked upward, with the 10-year yield rising by 1.6 basis points to 4.43 per cent and the 2-year yield climbing by 2.5 basis points to 4.21 per cent. These modest increases reflect a market grappling with the potential for higher interest rates, even as the US Dollar Index consolidated its recent losses with a slight 0.1 per cent uptick.

Gold, often seen as a safe-haven asset, saw its upward momentum persist, albeit with a slight 0.4 per cent pullback, as it continued its march toward the US$2,900 per ounce mark. These movements paint a picture of a market in flux, with investors seeking refuge in traditional safe havens while cautiously navigating the shifting sands of monetary policy.

On the global stage, the Japanese yen’s appreciation to its highest level since early December is a development worth noting. The currency’s gains were spurred by comments from Bank of Japan (BOJ) board member Naoki Tamura, who made a compelling case for higher interest rates. This hawkish stance contrasts sharply with the BOJ’s historically dovish policies, signaling a potential shift in Japan’s monetary strategy. The yen’s strength is a double-edged sword: while it bolsters the purchasing power of Japanese consumers and importers, it poses challenges for exporters and could dampen economic growth.

From my vantage point, Tamura’s comments are a bold move, reflecting the BOJ’s growing confidence in Japan’s economic recovery. However, the central bank must tread carefully, as premature rate hikes could undermine the fragile progress made in combating deflation. The yen’s appreciation also has broader implications for global currency markets, potentially influencing the relative strength of the US dollar and other major currencies.

Shifting gears to the commodity markets, Brent crude oil hovered just below US$75 per barrel, weighed down by concerns over President Trump’s proposed tariffs on China. These tariffs, if implemented, could reduce global crude demand, particularly from one of the world’s largest oil consumers. At the same time, Trump’s pledge to boost US oil output adds another layer of complexity, potentially offsetting the impact of sanctions on Iran. This delicate balance between supply and demand dynamics underscores the geopolitical risks embedded in the oil market.

As a journalist, I find it striking how political decisions in one corner of the world can ripple through global commodity markets, affecting everything from energy prices to inflation expectations. The mixed performance of Asian equities and the flat outlook for US equity index futures further highlight the uncertainty permeating global markets, as investors grapple with these intersecting forces.

Turning to the cryptocurrency space, this week brought several notable developments that reflect the sector’s growing maturity. JP Morgan’s latest eTrading survey revealed a significant uptick in institutional engagement with cryptocurrencies, with 13 per cent of the 4,200 surveyed institutional traders actively trading digital assets, up from nine per cent in 2024.

This increase aligns with the launch of US Bitcoin ETFs in January 2024 and the remarkable 120 per cent surge in Bitcoin prices over the course of the year. The contrast with 2023, a period marked by the fallout from the FTX collapse, is stark. The recovery and subsequent growth in 2024 underscore the resilience of the crypto market and its ability to attract institutional capital.

However, it’s worth noting that 71 per cent of surveyed traders still have no plans to trade cryptocurrencies, down from 78 per cent the previous year. This cautious stance suggests that while the crypto market is gaining traction, significant barriers to adoption remain, including regulatory uncertainty and concerns about volatility.

What startup should I start based on market trends in 2025?

The survey also highlighted the relative importance of various technologies, with artificial intelligence extending its dominance, followed by APIs. Blockchain, while still a distant third at six per cent (down from seven per cent last year), remains a critical technology for the crypto ecosystem. The decline in blockchain’s perceived importance is intriguing, particularly in light of the SEC’s recent launch of a Crypto Task Force website aimed at clarifying regulations for digital assets.

This initiative, which focuses on token classification and compliance, is a step in the right direction, providing much-needed guidance for market participants. Similarly, Franklin Templeton’s bid to launch a new crypto index ETF signals growing institutional interest in diversified crypto exposure. These developments are emblematic of the broader trend toward mainstream acceptance of digital assets, even as challenges persist.

In my view, the cryptocurrency market is at a pivotal moment. The increased institutional engagement and regulatory clarity are positive signs, but the sector must continue to address concerns about transparency, security, and systemic risk. The lessons of the FTX collapse and other high-profile failures must not be forgotten.

As the crypto ecosystem evolves, it will be crucial for regulators and industry players to work collaboratively to build a framework that fosters innovation while protecting investors. The golden age of crypto, as some have dubbed it, is within reach, but it will require careful navigation of the complex interplay between technology, regulation, and market dynamics.

To conclude, this week’s developments paint a picture of a global financial landscape marked by uncertainty and opportunity. From the anticipation surrounding US jobs data to the yen’s resurgence and the evolving dynamics in the cryptocurrency space, the forces shaping markets are multifaceted and interconnected.

As a journalist, I remain cautiously optimistic about the future, but I am mindful of the risks that lie ahead. The path forward will require vigilance, adaptability, and a commitment to balancing innovation with stability. The global economy stands at a critical juncture, and the decisions made in the coming months will reverberate for years to come.

 

Source: https://e27.co/markets-on-edge-as-jobs-data-currency-shifts-and-crypto-milestones-shape-the-week-20250207/

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