Markets Stuck in Limbo as Trade Tensions Return June Risk Builds

While the 90-day tariff truce technically remains in place, its credibility is fading as Trump revived threats – this time against the EU – just as courts rejected his earlier tariffs. He quickly vowed alternative approaches, keeping markets on edge.

Investor confidence remains fragile. Equity markets globally are showing signs of fatigue: the mid-April rally has faded, and major indices now look vulnerable to deeper pullbacks. The familiar “Sell in May” may evolve into “Sell in June” as caution grows in the absence of progress on key trade fronts, particularly between the US and China and the EU.

Currency moves were broadly subdued, reflecting the market’s wait-and-see mood. The US Dollar managed a modest gain, with the DXY index up 0.3% to 99.443, oscillating on tariff rhetoric. Euro and Pound were flat amid a quiet data week.

Commodity currencies retreated as oil weakened: AUD and NOK lost 1%, NZD fell 0.4% after an expected 25bps RBNZ cut, and CAD was flat.

JPY and MXN dropped 1%, while CHF edged slightly lower.

Gold firmed but didn’t fully capitalize on risk-off flows, while oil remained under pressure. WTI fell 1.6% to $60.68, failing to reclaim broken support and pointing to further downside risk if sentiment continues to sour.

The week ahead we have ECB, BoC, NFP in Focus

ECB & BoC rate decisions (both expected to cut 25bps),

A wide range of global PMI releases,

And US Nonfarm Payrolls to close the week.

Washington’s tariff still control the agenda, until there’s clarity on US-China and US-EU negotiations