Liberation Day or Obliteration Day? (Trade Cautiously)

US equity markets suffered a sharp selloff last week, with the $E-mini S&P 500 Futures(JUN5) (ESmain.US)$ and $E-mini NASDAQ 100 Futures(JUN5) (NQmain.US)$ tumbling 8.58% and 9.22% respectively. The meltdown was triggered by Trump's announcement of sweeping reciprocal tariffs on Liberation Day, on many countries who he claimed have huge trade deficits with the US. Additionally, there was a baseline of 10% tariff on all foreign imports. Tensions escalated further on Friday when China struck back with a 34% tariff on all US imports, sparking a second wave of heavy losses. Fed Chair Jerome Powell warned of mounting inflationary pressures and slowing economic growth stemming from the deepening trade war, exacerbating investor concerns. Among the Magnificent 7, $Apple (AAPL.US)$ and $Meta Platforms (META.US)$ bore the brunt of the selloff, plunging 13.19% and 10.43%, respectively. Traders can look towards the FOMC meeting minutes, CPI, PPI, initial jobless claims, inflation expectations and consumer sentiment.

Similarly, Asian markets ended the week red, tracking US losses. Japan's $OSE Nikkei 225 Futures(JUN5) (NK225main.JP)$ dropped by 12.64% as Trump's tariffs sent investors scrambling to JPY, a traditional safe-haven asset, this added further pressure on Japanese stocks. BOJ Governor Kazuo Ueda said the bank will assess the impact of tariffs when setting policy, warning the levies could hurt both global and domestic growth. Traders can look out for Japan's household confidence and PPI this week. The $HSI Futures(APR5) (HSImain.HK)$ declined by 2.79%, weighed down by deteriorating investor sentiment following the announcement of an additional 34% tariff on Chinese imports, on top of the existing 20%. However, losses were partially cushioned by optimism that Beijing may roll out further stimulus measures to support consumption and soften the blow from rising trade tensions. Traders can take note of China's CPI and PPI data on Thursday. The $FTSE Singapore Straits Time Index (.STI.SG)$ fell by 3.16% following global markets sell-off. Trump imposed a 10% baseline tariff on Singapore and Trade Minister Gan Kim Yong said Singapore will seek dialogue with the US but noted talks may be difficult without clarity on the US specific concerns. Retail sales also declined 3.6% in February YoY, reversing January's growth of 4.7%.

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