Relief rally: Markets up, Dollar down

Asian Markets

Investor sentiment across Asian markets kicked off the week on a high note after Washington announced a scaled-back tariff on imported electronics. Consumer devices such as laptops and smartphones will now face a reduced 20% tariff, a sharp contrast to the previous 125% rate that applied to Chinese imports.

Former PBOC advisor Yu Yongding hinted at a potential monetary policy pivot in China, suggesting the central bank may cut rates to buffer the domestic economy against trade-related pressure.

European Markets

Swiss Producer Price Index (PPI) data underwhelmed, coming in slightly below expectations:

• MoM: +0.1% (vs. forecast +0.2%)
  
• YoY: -0.1% (unchanged from prior)
  

The Swiss franc firmed modestly on the back of the data, while USD/CHF drifted lower, continuing its broader downtrend. The subdued inflation read reinforces the franc’s appeal as a deflation-resilient safe haven, especially as the dollar softens globally.

Currencies

The US Dollar continued its descent, as traders reduce exposure ahead of this week’s Fed appearances. Despite improved risk appetite, the greenback failed to find support, even against lower-yielding currencies like the euro and franc.

The EUR/USD pair is holding steady just under the 1.1400 mark, buoyed by optimistic trade headlines but lacking clear bullish momentum.

Commodities

• Gold: Pulls back slightly after posting a fresh record high in Asia, with bulls pausing amid overbought conditions.
  
• Oil (WTI): Fails to extend Friday’s momentum, with prices hovering near $61.60, pressured by demand concerns and a stronger franc.

Key Events Ahead

• US: NY Fed 1-Year Inflation Expectations (Mar) – previous 3.1%
  
• Fed Speakers: Waller, Harker, and Bostic expected later in the day
  
• UK: BRC Retail Sales Monitor (Mar) – forecast +0.7% YoY