Weekend reports revealed a tariff reversal by Trump, reducing the planned 145% hike on Chinese tech goods to 20%. Confusion ensued as contradictory statements emerged, leading to Trump later confirming the reduced rate. Trump indicated an upcoming announcement on semiconductor tariffs. Markets witnessed U.S. equity futures rise early in the week.
China halted rare earth mineral exports, crucial to industries like autos and semiconductors. The USD/JPY dropped following talks between Japan’s Finance Minister and the U.S. Treasury Secretary on FX volatility. China’s March trade data showed export increases, likely due to pre-tariff actions. Reports of potential PBoC policy easing and government support in Chinese equity markets also surfaced.
Singapore Central Bank Policy
Singapore’s central bank eased its policy citing poor global outlooks, adjusting the S$NEER band’s appreciation rate. EUR/USD dipped but later climbed to above 1.14, while the U.S. dollar index hit a three-year low. Gold reached a record high above US$3,243, and oil markets found support from U.S.–Iran discussions.
In geopolitical news, future German Chancellor Friedrich Merz expressed willingness to send Taurus cruise missiles to Ukraine, with potential use against the Crimean Bridge. Geopolitical tensions remain in focus with these developments.
Taken together, the events of the past several days point to heightened directional risk, driven less by steady macroeconomic data and more from abrupt announcements with wide-ranging policy implications.
Trump’s rollback on tariff increases—pairing a previously expected 145% jump with a much smaller actual figure of 20%—caught many off guard, not least because of the rapid back-and-forth in messaging. The initial confusion amplified short-term market volatility, though once confirmation arrived, we saw equity futures in the US ticking higher. What this tells us very plainly is that we’re back in a mode where markets are de-risking instantly on policy surprises, only to reprice swiftly once clarity emerges. And with tariffs on semiconductors still on the horizon, there’s a narrow window to adjust exposures to potential headline shocks.
China Trade And FX Movements
On the China side, reduced exports of rare earth minerals—notably those required for semiconductors and electric vehicles—introduced a secondary, supply-side constraint that could ripple across pricing in related futures. That alone might have justified some defensive FX moves. But this was layered atop an uptick in Chinese exports in March, which suggests that companies pushed shipments ahead of the tariff window. Short-term support in trade numbers should therefore be treated with caution. There’s little reason to believe the pace will hold once front-loaded demand clears.
Meanwhile, developments out of China in both fiscal stimulus and central bank easing indicate a directional bias that’s quite clear: they’re preparing to offset the damage from slowing external demand and reduced capital inflows. Of note was news pointing to upcoming measures within Chinese equities—a factor that ought to be watched less for what’s coming, and more for how quickly prices there begin to reflect government intervention.
Add to this the drop in USD/JPY following high-level talks between Japanese and US officials. Given the centrality of currency stability for Japan—particularly amid yen weakness and broader import-cost pressures—it’s hardly surprising that the Ministry of Finance took a more active stance. FX traders should assume that verbal interventions might now precede further market actions, potentially even coordinated ones. With that possibility in play, directional bets on yen weakness need tighter management.
Elsewhere, the MAS decision in Singapore to reduce the slope of the S$NEER band reflects a worsening external backdrop that could weigh beyond ASEAN alone. Their signal was clear: weaker global demand is feeding into local price pressures. Currency reaction was muted, but the long-term impact of these adjustments on regional competitiveness shouldn’t be underestimated.
Over in Europe, short-lived weakness in EUR/USD gave way to a robust recovery above 1.14. The dollar index itself fell to a three-year low, reducing USD-denominated pressures elsewhere. That also lent further tailwind to gold, which broke to record highs above $3,243. The correlation here isn’t coincidental—when real yields soften and risks grow asymmetric, metals pull in capital. Our view would be that unless the dollar finds a firm floor soon, commodities could extend their run.
Brent and WTI also drew upward reactions, bolstered in part by discussions between Washington and Tehran. Any thaw there introduces potential shifts in supply assumptions and, more importantly, recalibrates risk premiums. There remains a broader uncertainty premium embedded into energy markets, made more acute by US policy direction and Middle East input constraints.
On the geopolitical front, remarks from Merz about arming Ukraine with long-range cruise missiles moved well beyond typical German caution. It’s not merely rhetoric. Should action follow, we could see a recalibration of security risk scores, which are very likely to bleed into European assets and FX correlations. With defence and retaliation discourse expanding, option pricing should adjust accordingly.
With macro, commodities, FX, and rates reacting strongly and asymmetrically to isolated developments, the path forward requires high-frequency reassessment. This is an environment where waiting for confirmation could cost more than it protects.
