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Flip-flop market in flip-flop days
Markets remain directionless as hopes for a US-China trade thaw dim following pushback from Washington and Beijing. While the Dollar weakens, steady US jobless data underscores ongoing labor market strength.
Treasury Secretary Bessent rejects claims of unilateral US tariff relief.
BoJ may delay hikes due to rising uncertainty.
US jobless claims edge higher as expected, but ongoing declines in continuing claims confirm labor market resilience.
Markets are struggling for direction on Thursday, with Asian and European sessions showing subdued price action as risk sentiment falters. Despite a modest rebound in US equities overnight, the underlying tone remains fragile, and attempts at recovery have been shallow, reflecting a lack of conviction from investors.
This hesitancy was reinforced by the unraveling of early-week hopes for a breakthrough in US-China tariff talks. Optimism gave way to renewed skepticism after clear rejections from both Washington and Beijing. US Treasury Secretary Scott Bessent firmly denied speculation that the White House had offered China any unilateral tariff relief. “No unilateral offer—none at all,” Bessent said, clarifying that while current tariff levels may be unsustainable long-term, any revisions would require reciprocity from Beijing.
President Trump’s more aggressive tone added fuel to the fire, warning that “reciprocal tariffs could be revisited” if talks don’t proceed as intended. In response, Chinese officials rejected the administration’s narrative, dismissing the President’s statements as “fake news” and reiterating their position that existing tariffs must be removed before negotiations can move forward.
The renewed tensions weighed on the US Dollar, which slipped against major peers. The DXY index fell roughly 0.60% and remains capped below the key 100.00 psychological level. The Yen and Swiss Franc gained ground as traders sought out traditional safe havens amid the uncertainty.
Japan’s resilience was further highlighted by commentary from the IMF’s who suggested that the Bank of Japan may delay further interest rate hikes due to rising global uncertainty and tariff-related risks. She noted that investment sentiment in Japan is deteriorating, as firms delay decisions pending more clarity on trade policy. Choueiri also reaffirmed the Yen’s status as a safe haven, backed by Japan’s economic stability and policy predictability.
Labor market holds strong as jobless claims rise modestly
Amid the broader macro volatility, Thursday’s US labor market data offered a degree of stability. Initial jobless claims rose by 6,000 to 222,000 in the third week of April, right in line with expectations and still close to a two-month low. More notably, continuing claims fell by 37,000 to 1.841 million — a two-month low and well below market expectations.
The data reinforces the message from recent jobs reports: despite mounting macro uncertainty, the US labor market remains historically tight. Federal employee claims, which have come under increased scrutiny following firings by the Department of Government Efficiency (DOGE), rose slightly by 87 to 629. However, reports indicate that many of those terminated received severance packages, temporarily disqualifying them from claiming benefits.
