The Stoxx 600 tanked 1.5% yesterday, the S&P500 gapped lower though the index rebounded from the March 13th low to close the session some 0.55% higher while Nasdaq 100 fell to the lowest levels since September before closing near flat. As such, both the S&P500 and Nasdaq 100 posted their worst quarterly performance in about two years: the high valuations – especially the high tech valuations – came down and capital flew toward the non-tech, and non-US parts of the market.

Invesco’s S&P Low Volatility index – that includes low volatility names like Coca-Cola and P&G gained 1.36% yesterday and is up by almost 7% since the beginning of the year. The Stoxx 600 on the other hand gained more than 10% at some point this quarter – by the beginning of March – yet shed almost half of the gains as the narrative went from ‘the jump in government spending will boost growth’ to ‘tariffs will hit earnings’.

Note that the index slipped below its major 38.2% Fibonacci retracement on the ytd rally yesterday, into the bearish consolidation zone, hinting that the selloff could continue. In Japan, the Nikkei remains under pressure this morning, as the carmakers there are also skeptical about what the tariff day will bring on the table.

In the UK, the British FTSE 100 index seems weather the tariff selloff better than the major peers – the index actually posted 5% gains in Q1 – that’s its best performance since the end of 2022, but here as well, the index tested the major 38.2% Fibonacci retracement yesterday, pointing that the British blue-chip index is also on the verge of falling into a medium-term bearish consolidation zone.

European futures hint at recovery, but risks prevail.

From here, there are many possible scenarios – obviously – but the most likely two are 1. US tariffs sound more reasonable than many fear and global indices rebound on relief until the next tantrum. Or 2. The tariffs are unreasonable – like the 200% levies that Trump threatened the European alcoholic beverage makers with – and the world is pushed into a deeper chaos. The majority of investors appear to be hedging against the second scenario: gold prices continue their journey to the north with little hesitation, the price of an ounce of gold is trading above $3140 this morning and the USDCHF resists into the 0.8850 level.

Elsewhere, the US dollar’s tentative to recover losses yesterday remained weak as the index posted a fifth session of lower lows and lower highs – confirming that sentiment remains comfortably bearish into Liberation Day. The EURUSD was bid below the 1.08 level. The Italian CPI update came in higher than expected while inflationary pressures in Germany eased in March.

The eurozone aggregate data is due later this morning and is expected to have eased in March toward the European Central Bank’s (ECB) 2% target. The lower the inflation print, the stronger the ECB policy support, the stronger the ECB’s policy support, the stronger the euro. Across the Channel, Cable is waiting in ambush below the 1.30 level, any further retreat in the US dollar would push the pair above the critical 1.30 resistance.

In Japan, the USDJPY is back below the 150 mark. The pair couldn’t clear the critical 151/151.50 resistance zone, including the 50-DMA and the major 38.2% Fibonacci retracement on ytd retreat. Even though the Bank of Japan (BoJ) expectations softened due to tariff uncertainty, policymakers’ willingness to support economic growth and the dollar’s broad-based weakness keeps the outlook in favour of  the yen.

While we are in Asia, the latest Caixin manufacturing PMI hinted that manufacturing in China grew faster than expected in March, pointing that the government’s efforts to boost production may be paying off. The CSI 300 index is offered into the 50-DMA but the Hang Seng is up by around 0.56% at the time of writing, as the tech giants including Alibaba and Tencent are better bid after an ugly Monday.

In Australia, the Reserve Bank of Australia (RBA) kept its cash rate unchanged as broadly expected. The RBA decision combined with good news from China and a broad-based USD weakness gives support to the AUDUSD this morning. But the gloomy global growth outlook will likely keep the upside limited.

Speaking of global growth... Crude oil bulls shrugged off concerns about slowing global growth, instead focusing on potential supply disruptions from Russia and Iran. Prices surged nearly 3.5% yesterday, clearing the key $70 per barrel mark and the 50-DMA, reinforcing bullish momentum. U.S. crude is now testing the critical 38.2% Fibonacci retracement level—typically a gateway to a medium-term uptrend. However, despite the technical setup, a sustained bullish reversal remains hard to justify given the broader headwinds in global trade.