Closing Recap 

U.S. stocks finished the week strong with significant weekly gains, primarily driven by a mid-week tariff delay announcement, overcoming ongoing U.S.-China trade friction and notable volatility in currency and bond markets. 

Looking Ahead 

The upcoming week shifts the market’s focus firmly onto central bank actions and crucial economic data releases, following a period of intense volatility driven by trade policy shifts. The European Central Bank’s anticipated rate cut on Thursday and the highly uncertain Bank of Canada decision on Wednesday (heavily influenced by Tuesday’s CPI) will be key events. Inflation reports from the UK (Wednesday) and wage data (Tuesday) will also draw significant attention, potentially altering Bank of England expectations. Furthermore, China’s GDP release on Wednesday offers insight into the impact of the ongoing trade conflict, while US Retail Sales (Wednesday) provide a vital check on the American consumer. Expect markets to remain sensitive to any further trade developments, but the interaction between central bank signaling and incoming economic data will likely be the primary driver of sentiment and potential volatility.

Key Takeaways 

• Major Weekly Rally: Stocks surged after President Trump delayed tariffs on non-China partners for 90 days; S&P 500 (+5.7%), Nasdaq (+7.29%), Dow (+4.95%) posted best weekly gains.
• China Retaliates: Despite the delay elsewhere, China increased retaliatory tariffs on US goods to 125% (from 84%) effective Saturday, though offered minor semiconductor breaks. 
• Dollar Tumbles, Yields Spike: Extreme volatility hit FX and bond markets. The US Dollar Index briefly fell below 100, while the 10-Year Treasury yield saw its biggest weekly jump (+50bps) since 2001. 
• Gold Hits Record: Gold surged to a new record closing high above $3,244/oz, aided by the falling dollar. 
• Inflation Cools Further: Producer Price Index (PPI) data came in below expectations, confirming the cooling inflation trend seen in CPI data earlier in the week. 
• ECB Rate Cut: The European Central Bank (Thu) is widely expected to cut rates by 25bps amid trade concerns, focusing on Lagarde’s tone. 
• BoC Uncertainty: The Bank of Canada decision (Wed) is uncertain (‘coin toss’); traders watch Canadian CPI (Tue) closely for clues. 
• UK Inflation Data: UK CPI (Wed) and Wage Growth data (Tue) are critical inputs for Bank of England policy expectations. 
• China & US Data: China GDP (Wed) released amid trade storm; US Retail Sales (Wed) is the main US data point. 

Market Overview 

U.S. equity markets closed out the week with substantial gains, propelled by a significant rally on Wednesday. The primary catalyst was President Trump’s decision to delay the implementation of additional tariffs on trading partners (excluding China) for 90 days. This reprieve provided a much-needed boost to sentiment, leading to the best weekly performance for major indices like the S&P 500 and Nasdaq since late 2023 and 2022, respectively. However, the underlying trade tensions persisted, as China announced overnight Friday its own retaliatory measure, increasing duties on U.S. goods to 125% starting Saturday, though they indicated no further immediate hikes and provided some relief for certain semiconductors. 

Index	Last Closing Level	Friday’s Change	Friday’s Change (%)	Weekly Change (%)
DJ Industrials	40212	619.05	0.0156	0.0495
S&P 500	5363	95.31	0.0181	0.057
Nasdaq	16724	337.15	0.0206	0.0729
Russell 2000	1860	28.81	0.0157	0.066

While stocks enjoyed a strong bounce, the more dramatic story unfolded in the currency and fixed-income markets. Fears surrounding the economic impact of tariffs and potential recessionary pressures led to a brutal week for the US dollar, which tumbled sharply, dipping below the key 100 level on the DXY index for the first time since July 2023 before a late Friday rebound. Correspondingly, the Euro surged, briefly touching levels not seen since early 2022. Meanwhile, U.S. Treasury yields experienced a historic surge, with the 10-year yield jumping a massive 50 basis points over the week – its largest weekly increase since 2001 – reflecting intense repositioning and inflation/growth concerns.

Economic Data Calendar (Week of April 14-18)

TUE: 

• Canadian CPI (March): Crucial data point ahead of BoC decision; recent upticks challenge easing expectations. 
• UK Employment & Wage Growth (Feb/Mar): Key for BoE outlook; focus on wage persistence. 
• German ZEW Economic Sentiment (April): Gauge of investor confidence in Europe’s largest economy. 
• US Empire State Manufacturing Index (April): Regional manufacturing activity survey. 

WED: 

• Bank of Canada (BoC) Rate Decision: Outcome uncertain (‘coin toss’); market pricing implies ~40% chance of a cut, highly dependent on Tue CPI data. 
• China GDP (Q1), Industrial Production & Retail Sales (March): GDP growth expected to slow to 5.1% y/y. 
• UK CPI (March): Headline rate expected to ease further but watched closely by BoE. 
• Eurozone Final CPI (March): Confirmation of inflation reading for the bloc. 
• US Retail Sales (March): Key US data point, expected to show strong rebound (+1.3% m/m vs +0.2% prior). 
• US Industrial Production (March): Measure of manufacturing, mining, and utility output. 

THU: 

• European Central Bank (ECB) Rate Decision & Press Conference: 25bps cut widely expected (to 2.25% deposit rate). Focus on President Lagarde’s tone regarding future path amidst trade uncertainty. 
• US Building Permits & Housing Starts (March): Indicators of housing market activity. 
• US Philly Fed Manufacturing Index (April): Regional manufacturing activity survey.

Commodities, Currencies, and Treasuries

It was a week of major moves outside of equities. Gold surged over 2%, hitting a new record closing high above $3,244, benefiting significantly from a sharp decline in the US dollar. Copper also posted strong gains. Oil prices (WTI & Brent) rebounded on Friday, lifted partly by comments regarding potential action on Iranian exports, but were still poised for weekly declines of around 3% following the prior week’s rout, as trade war concerns weighed earlier in the week. The currency market saw extreme volatility: the US Dollar Index suffered a major blow, falling over 1.5% at one point Friday and breaching the 100 level before recovering slightly. The Euro capitalized, surging temporarily above $1.13. The US dollar also weakened significantly against the Yen, though pared losses late Friday. The Treasury market experienced a seismic shift, with yields soaring across the curve. The 10-year yield jumped approximately 50bps for the week, marking its largest weekly rise since 2001, indicating a significant reassessment of growth, inflation, and policy outlooks by bond investors.

Asset	Last Level	Friday’s Change	Unit / % Change
WTI Crude	61.5	1.43	USD/bbl
Brent Crude	64.76	1.43	USD/bbl
Gold	3244.6	67.1	USD/oz
EUR/USD	1.1329	0.0132	Rate
USD/JPY	143.54	-0.91	Rate
10-Year Note Yield	0.0448	0.00088	Yield (%)