The escalating trade tensions between the United States and China intensified as the 20% tariff on all Chinese goods, up from 10%, was retaliated against after China introduced tariffs of 10% to 15% on various U.S. imports, including agricultural products such as soybeans and wheat, and added 15 U.S. entities to an export control list and 10 firms, like Illumina Inc., to an unreliable entities list. The U.S. also levied 25% tariffs on Canada and Mexico, calling for more efforts over border security and fentanyl smuggling, with no retaliation from Mexico but a reciprocal 25% from Canada on more than $20 billion worth of U.S. imports. Analysts predict these measures could lead to a recession in Mexico, higher U.S. inflation, and lower U.S. growth. Within the tensions, speculation has arisen about a potential "Mar-a-Lago Accord" to devalue the dollar and rework trade deals, though this remains unconfirmed.

EQUITY

U.S. stocks dip thanks to 25% tariffs on Canadian and Mexican imports that took effect immediately, while China's tariff doubled to 20%. The S&P 500, Dow, and Nasdaq all took a hit, with tech stocks leading losses while real estate and defence fared better. $1.5 trillion of market cap were erased from equity, most from Nvidia falling almost 9%. Manufacturing data revealed contracting new orders and accelerating price pressures, though some analysts speculated the downturn might be temporary.

GOLD

The gold market opened the new month on a positive note from the smitten dollar caused by aggressive tariffs that are expected to receive either similar or worse retaliatory measures. Price held steady at $2890 an ounce at the area of the broken support level with continued selling pressures to be expected. Demand outlooks are not great either, with India's imports on track for a 20-year low while Hong Kong exports to China are down 44% on the month, according to Kitco.

OIL

WTI and Brent crude oil prices fell to three-month lows after OPEC+ decided to proceed with a planned production increase of 138,000 barrels per day starting in April. The shock was intensified by tariffs taking effect, which are expected to slow economic growth and reduce oil demand. Trump's pause on aid to Ukraine has been taken as a possibility for a sanctions relief on Russian oil.

CURRENCY

The dollar shrank against the euro and sterling, which gained on hopes for a Ukraine peace deal and retaliatory concerns against the U.S. economy, while it strengthened against the Mexican peso and Canadian dollar following tariffs on these countries. China's yuan held steady even with the tariff increase, supported by the central bank's firmer midpoint fixings. Investors now awaited key events such as the U.S. jobs report, the European Central Bank meeting, and China's Two Sessions for further insights.