The financial markets are experiencing significant turbulence as the European trading session began on Friday (April 4, 2025). The reciprocal policies instituted by U.S. President Donald Trump were met swiftly with retaliation from China. The Chinese Finance Minister recently announced a hike in import tariffs on all American products by 34%, effective from April 10.
This decision came just one day after President Trump revealed his reciprocal measures that increased tariffs on products imported from China by 34%, set to take effect on April 9. With these new tariffs, the total U.S. tariffs on Chinese imports now stand at 54%.
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China’s response signals a potential escalation of the trade war, especially since Trump has extended these reciprocal tariffs to approximately 60 nations.
Moreover, the release of U.S. labor data this evening is also expected to induce significant market movements. Here is the data from Trading Central:
- Non-farm payrolls for the U.S. (March) at 19:30 WIB; forecast 100K vs previous 151K
- U.S. unemployment rate (March) at 19:30 WIB; forecast 4.2% vs previous 4.1%
- Average hourly earnings in the U.S. (March/year-on-year) at 19:30 WIB; forecast 4% vs previous 4%
GOLD
Gold (XAUUSD) prices rebounded to US$3,136 per troy ounce at the start of European trading. Earlier, gold dropped to US$3,078.30 per troy ounce due to profit-taking.
The increasing risk of a trade war along with a slowdown in the global economy continues to enhance gold’s appeal as a safe haven. Consequently, there remains a positive sentiment surrounding gold, which could strengthen further if the non-farm payrolls (NFP) data comes in lower than expected and the unemployment rate exceeds forecasts.
OIL
Oil prices (CLS10) took a sharp downturn, plummeting by US$4.51 to US$62.10 per barrel, marking the lowest level since August 2021. The global economic slowdown due to the widening trade war poses a risk of declining oil demand, leading to this price crash.
This negative sentiment is likely to persist in the oil market through tonight’s trading session.
EURUSD
The EURUSD currency pair is exhibiting high volatility within the range of 1.09646 – 1.11077 as European trading begins. Data from Germany indicated that factory orders in February recorded a 0% growth month-on-month (MoM), falling short of the Trading Central forecast of 4.5% MoM.
This release initially caused the EURUSD to dip before it rebounded. Observing these movements, if the U.S. labor market data comes in worse than anticipated, it presents the potential for EURUSD to regain positive sentiment.
GBPUSD
The GBPUSD currency pair fell to 1.29621 at the start of the European trading session. Compared to Thursday’s close, GBPUSD dropped by 1.385 or (138.5 pips). The decrease was prompted by profit-taking following a sharp increase the previous day.
Should the labor market data from the U.S. reveal poorer results than forecasted, GBPUSD could receive a positive sentiment. A weakening labor market would signal a softening economy, potentially paving the way for the Fed to cut interest rates more rapidly.
USDJPY
The USDJPY pair reversed sharply to 145.034 at the onset of European trading after previously climbing to 146.549. The decline in USDJPY followed China’s retaliatory tariff increases against the U.S.
The pressure on USDJPY could mount further if the U.S. labor figures tonight fall short of forecasts.
Nasdaq
The Nasdaq index plummeted by over 600 points to 18,030 at the beginning of the European trading session, hitting a 9-month low. China’s response to Trump indicates a potential escalation of the trade war. This is particularly concerning given Trump’s reciprocal tariffs affecting around 60 nations.
The prevailing negative sentiment is expected to continue impacting the Nasdaq’s movements during tonight’s trading.
