What we witnessed yesterday in the American session was nothing short of historic—a day that will be remembered for a long time. Markets saw an astonishing reversal, not only on indices but across the broader financial landscape in a full-blown risk-on move.
What sparked it all? A single post on Donald Trump’s Truth Social account, where he declared it was a “great time to buy.” We could call it the opposite of insider trading—Trump effectively gave the markets a heads-up. Just hours later, news followed that the U.S. would pause tariffs for 90 days. That alone ignited a bullish rally unlike any we've seen in recent times. Indices surged, climbing as much as 10% depending on the market—a remarkable one-day move.
Today, American indices are showing a small pullback, which is expected after such a sharp run. The question now is whether European markets can catch up with this momentum and continue the upswing.
Looking at currencies, yesterday brought a stellar session for commodity currencies like the Australian dollar, New Zealand dollar, and Canadian dollar. In contrast, safe havens like the Japanese yen weakened sharply, though today we’re seeing a mild recovery in yen strength as the market takes a breath.
Over to commodities—gold had a fascinating ride. Initially, it dipped in the risk-on environment, but later in the session it regained strength and surged alongside equities. Oil, another big winner yesterday, is now in a mild pullback phase, which for now looks like a normal correction following the powerful rally.
In short, markets are riding a roller coaster: a massive drop, an even more massive reversal, and now a calm but cautious correction.
As for today’s macro calendar, data has taken a backseat to political developments, but it’s worth noting that overnight we got inflation data from China, which came in below zero—negative and below expectations. Later today, all eyes will turn to U.S. inflation data, with CPI expected to drop to 2.5% on a yearly basis. That could become the next trigger for the next leg of this wild market ride.
Let’s see what Thursday brings.