Multi-Asset Weekly Newsletter

Global Developments & Global Equities

RISK SENTIMENT RECOVERED AFTER THE US ANNOUNCED A 90-DAY PAUSE FOR ITS TRADE PARTNERS TO NEGOTIATE. 

The markets heaved a sigh of relief on Wednesday as Trump announced a 90-day pause on tariffs for all countries, except China. The reason for the 90-day pause could have been the turmoil in bond and stock markets. China, however, increased its tariffs on U.S. imports to 125% on Friday, hitting back against President Donald Trump's decision to raise duties on Chinese goods to 145% and increasing the stakes in a trade war that threatens to upend global supply chains. US March CPI came in lower at 2.4% against the expected 2.6% YoY. Core CPI too was lower at 2.8% against the expected 3% YoY. However, Fed members have expressed concerns around the inflationary impact of tariffs. 

NIFTY V/S GLOBAL MARKETS 

Global equities partially recovered from the bloodbath of last week amid risk-on sentiment led by a pause of a 90-days window for tariffs. 

FIXED INCOME: 

U.S. Treasury yields rose as risk sentiment improved after a 90-day pause. The 10-year yield jumped 31bps to 4.49%, and the 2-year rose 20bps to 3.96%. Anticipated tax cuts may add further pressure on long-term yields. Strong 10- and 30-year auctions provided some market stability, though liquidity concerns keep investors cautious. Eurozone and UK 10-year yields edged up 1–6bps. In India, the 10-year yield dipped 2bps to 6.44% after the RBI cut its repo rate for the second time and shifted its stance to accommodative, opening the door to more rate cuts. RBI also trimmed FY26 growth forecast to 6.5% (from 6.7%) and inflation to 4% (from 4.2%). The 1-year OIS fell 15bps to 5.77%, and the 5-year slipped 2bps to 5.71%. 

FOREIGN EXCHANGE: 

The US Dollar has continued to weaken against all G10 currencies this week. CHF(+5.6%) was the best performing currency amongst G10, followed by AUD (+4.1%), EUR (3.6%), JPY (2.3%), and GBP(1.6%). Asian currencies were a mixed bag. Amongst Asian currencies, CNH weakened to its all-time low of 7.43 in offshore markets on the back of escalation trade wars between the US & China. However, after China retaliated with counter tariffs to the tune of 125% on imports from US, CNH strengthened back to 7.28 levels. KRW(+2.9%) and THB (+2.1%) were the best-performing currencies within Asia, while IDR(-1.4%) and INR (-1%) were the underperformers. Tracking CNH, Rupee also weakened from 85.50 to 86.72 during the week, but it ended the week at 86.05in onshore markets. Next week is going to be truncated week for INR with trading holiday on Monday & Friday. Forwards were received with 1y forward yield down by 10bps to 2.26%. 

COMMODITIES: 

Brent was down another 10% during the week as the intensifying trade war between the US and China triggered worries over demand for Oil. Later it recovered to close with a marginal loss of 1.2%. Gold was up 2% at $3,236.67, after hitting a record high of $3,243.82 earlier in the session. Gold is up over 6% this week while Silver is up 9% for the week.