Crude Oil Markets Retreat as Economic Concerns Outweigh Trump’s Tariff Threats

Economic

Summary:

Crude oil prices climbed on Monday amid US President Donald Trump’s threats to impose 25% to 50% tariffs on Russia’s oil.

Crude oil futures prices opened higher during Monday’s Asian session following Trump’s threats to impose tariffs on Russia’s oil exports. The US president also said there would be “bombing” and “secondary tariff” on Iran if the country failed to make a nuclear deal.

The West Texas Intermediate (WTI) and Brent futures both jumped 0.6% at the market open but later retreated as risk-off sentiment prevailed. Concerns over a global economic downturn intensified ahead of Trump’s auto and reciprocal tariffs, which are set to take effect on Wednesday.

Geopolitical tensions drive oil prices higher

Oil prices have climbed approximately 5% since mid-March after the US struck Houthis militants, an Iran-backed military group in Yemen. Houthis group had launched attacks on commercial shipping vessels in the Red Sea following Israel’s retaliation against Hamas in Gaza.

Last week, Trump also threatened to impose 25% tariffs on countries purchasing Venezuela’s oil, expected to take effect on 2 April. His latest comments over the weekend have added further upside pressure on crude prices.

“If Russia and I are unable to make a deal on stopping the bloodshed in Ukraine, and if I think it was Russia’s fault — which it might not be — but if I think it was Russia’s fault, I am going to put secondary tariffs on oil, on all oil coming out of Russia,” said Trump during a phone interview with NBC News on Sunday, “That would be that if you buy oil from Russia, you can’t do business in the United States…There will be a 25% tariff on all oil, a 25 to 50 point tariff on all oil.”

In a separate interview on Saturday, Trump threatened “secondary tariffs” and “bombing” on Iran if the country refuses to stop nuclear weapons development. “There will be bombing. It will be bombing the likes of which they have never seen before.”

“It's totally geopolitical risk. Both actions would impact supply and open up second order effects that could also drive prices higher,” said Kyle Rodda, a senior market analyst at Capital.com Australia.

OPEC to hike production

The Organisation of the Petroleum Exporting Countries (OPEC) and allies are set to begin unwinding its voluntary oil production cuts of 2.2 million barrels per day in April. However, Trump’s tariff threats against key OPEC+ members, including Russia, Iran, and Venezuela, may reduce their supplies, effectively offsetting the planned increase in output.

The OPEC+ is scheduled to hold a meeting on 5 April to discuss future joint output plans. According to Reuters, the group is expected to extend its production hike, raising output by 135,000 barrels per day in May. Meanwhile, some members will be required to reduce supplies to compensate for overproduction compared to their output targets, totalling 4.2 million barrels per day. This suggests that if members fully comply with the plan, the net effect could be an overall reduction in supply rather than an increase. However, analysts at BNP Paribas expect low compliance with the compensation cuts.

Recession fears weigh on oil demand

Despite heightened geopolitical risks, economic concerns may overshadow supply-side factors. Trump’s tariff threats on Russia and Iran have raised fears of higher inflation and weaker economic growth, potentially leading to stagflation or even recession, which could dampen oil demand.

During Monday’s Asian session, equity markets across the region fell as Trump’s auto and reciprocal tariffs are set to take effect this week. Gold prices continued their rally, with both spot and futures prices reaching new highs in early trading. The typical haven currency, the Japanese yen, also strengthened significantly.

Source: Euronews

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Warren Takunda

Economic

The British Pound has recorded three consecutive weekly advances against the Euro, although upside momentum is soft and prone to mean reversion.

We saw a good example of such mean reverting tendencies on Friday, when a rally in the Pound-to-Euro exchange rate suddenly turned tail at 1.2025, resulting in a 0.35% daily close.

So, there is a decent amount of random volatility to watch out for here, even if the general drift of the past couple of weeks has been higher.

Pound Sterling is well supported against the Euro and we would look for buying support to come in at 1.1943, which is last Wednesday's low.

To be sure, we are close to this level on Monday amidst soft global equity market conditions that betray a sense of investor uncertainty regarding Wednesday's U.S. tariff announcements.

Generally, market selloffs weigh on the Pound-Euro exchange rate, which speaks of downside risks heading into Wednesday's tariff event.

Pound-to-Euro Week Ahead: Two-way Risks into 'Liberation Day'_1

Above: GBPEUR at daily intervals with annotations.

Nervousness about the scale and timeline of Trump's proposed tariffs will keep direction relatively random, confirming a distinct lack of conviction as to how the currency market should react to the announcements.

This will keep GBP/EUR churning around the nine-day exponential moving average (EMA), located at 1.1957.

The Week Ahead Forecast model looks for the area between 1.1943 and 1.1980 to account for the majority of price action in the first half of the week.

What happens beyond Wednesday is harder to discern as we have noted the Pound to be something of a hedge to tariff news. Because the UK is perceived to be relatively at little risk to U.S. tariffs, the British Pound has at times found itself well supported around tariff announcements.

If this is the case this week, then a rally to 1.2025 and even higher would be possible into the weekened.

But what if markets show some relief on Trump's midweek announcements? For instance, if the announcements aren't as severe as suspected, the Euro could be one of the bigger winners.

"Sell the rumour, buy the fact" price action is highly likely.

In this instance, the Euro ends the week stronger, pushing Pound-Euro to 1.1860.

"One could argue that given the elevated focus on tariffs, anything short of immediate implementation could drive some relief," says Goldman Sachs in a weekly FX briefing.

Heading into the midweek announcement GBP/EUR momentum is flat with the Relative Strength Index (RSI) at 50, which confirms neither the Euro nor the Pound has the upper hand at present.

Although we would be inclined to say the first half of the week will see flat trade ahead of Wednesday's announcement, beware of any leaks from the White House.

The Pound has proven resilient to tariff headlines as the UK is considered relatively immune to tariffs owing to a broadly balanced goods trade.

Last week's suggestions that VAT tax would not be in scope for reciprocal tariffs also helped the UK currency, as this was a potential weak spot for the UK.

Downing Street sources have meanwhile said UK negotiators were approaching last-ditch talks to secure a carve-out for Britain with "cool, calm heads", but were prepared to deploy "sharp teeth" if a response were needed.

Prime Minister Keir Starmer spoke directly to Trump on Sunday.

Trump is planning to introduce sweeping tariffs on goods from all countries on April 2, which he has called "Liberation Day" for the U.S.

At the weekend, he confirmed tariffs "on all countries" were proceeding, and commentators said this is why global equity markets are under pressure on Monday.

However, Trump's comments offer us absolutely no new information, and the market selloff looks to be a positioning adjustment ahead of Wednesday, which makes a post-announcement relief rally all the more likely (GBP/EUR weakness).

How other countries respond will be important, as this will determine the extent to which the issue evolves into a true trade war.

The EU will be particularly important in this regard. The EU should "not back down in the face of the USA. Strength and self-confidence are required," said Germany's acting Economy Minister Robert Habeck.

"The only solution for the European Union will be to raise tariffs on American products in response," French Finance Minister Eric Lombard said.

Source: Poundsterlinglive

To stay updated on all economic events of today, please check out our Economic calendar

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Warren Takunda

Stocks

Asian shares tumbled Monday, with benchmarks in Tokyo and Taiwan falling more than 4%, while the price of gold hit a record high at nearly $3,150 an ounce.

Investors have pulled back and sought traditional safe havens like gold as worries build over a potentially toxic mix of worsening inflation and a U.S. economy slowing because households are afraid to spend due to the deepening trade war that has escalated under U.S. President Donald Trump.

U.S. futures and oil prices were lower.

Thailand’s SET lost 1.5% after a powerful earthquake centered in Myanmar rattled the region, causing widespread destruction in the country, also known as Burma, and less damage in places like Bangkok.

Shares in Italian Thai Development, developer of a partially built 30-story high-rise office building under construction that collapsed, tumbled 27%. Bangkok’s governor said authorities would investigate the cause of the disaster, which left dozens of construction workers missing.

Globally, the trade war is the abiding focus. Many of the countries that run trade surpluses with the U.S. and depend heavily on export manufacturing are in Asia, Stephen Innes of SPI Asset Management said in a commentary.

“Asia is ground zero. Of the 21 countries under USTR (U.S. Trade Representative) scrutiny, nine are in Asia,” he noted.

Tokyo’s benchmark fell 4.1% to 35,617.56, while the Hang Seng in Hong Kong lost 1.2% to 23,135.01.

The Shanghai Composite index declined 0.5% to 3,335.67.

In South Korea, the Kospi fell 3% to 2,481.12, while Australia’s S&P/ASX 200 sank 1.7%, closing at 7,843.40.

Taiwan’s Taiex lost 4.2%.

On Friday, the S&P 500 dropped 2% to 5,580.94, for one of its worst days in the last two years. It was its fifth losing week in the last six.

The Dow Jones Industrial Average sank 715 points, or 1.7%, to 41,583.90, and the Nasdaq composite fell 2.7% to 17,322.99.

Lululemon Athletica led the market lower with a drop of 14.2%, even though the seller of athletic apparel reported a stronger profit for the latest quarter than analysts expected.

Oxford Industries, the company behind the Tommy Bahama and Lilly Pulitzer brands, likewise reported stronger results for the latest quarter than expected but still saw its stock fall 5.7%.

One of the main worries hitting Wall Street is that President Donald Trump’s escalating tariffs may cause U.S. households and businesses to freeze their spending. Even if the tariffs end up being less painful than feared, all the uncertainty may filter into changed behaviors that hurt the economy.

A report on Friday showed all types of U.S. consumers are getting more pessimistic about their future finances. Two out of three expect unemployment to worsen in the year ahead, according to a survey by the University of Michigan. That’s the highest reading since 2009, and it raises worries about a job market that’s been a linchpin keeping the U.S. economy solid.

A separate report also raised concerns after it showed a widely followed, underlying measure of inflation was a touch worse last month than economists expected.

The Fed could return to cutting interest rates, like it was doing late last year, in order to give the economy and financial markets a boost. But such cuts would also push upward on inflation, which has been sticking above the Fed’s 2% target.

The economy and job market have been holding up so far, but if they were to weaken while inflation stays high, it would produce a worst-case scenario called “stagflation.” Policy makers in Washington have few good tools to fix it.

Stock markets worldwide appear shaky as a Wednesday deadline approaches for more tariffs. Trump has dubbed it “Liberation Day,” when he will roll out tariffs tailored to each of the United States’ trading partners.

In other dealings early Monday, U.S. benchmark crude oil lost 4 cents to $69.32 per barrel. Brent crude oil fell 2 cents to $72.74 per barrel.

The U.S. dollar fell to 149.02 Japanese yen from 149.84 yen. The euro rose to $1.0839 from $1.0803.

Source: Sharecast

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Warren Takunda

Stocks

London stocks fell sharply in early trade on Monday as Donald Trump threatened to impose reciprocal tariffs on "all countries".

At 0845 BST, the FTSE 100 was down 0.8% at 8,587.16.

Speaking to reporters on board Air Force One on Sunday, the US President said that his tariff announcement on 2 April would "start with all countries".

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The last day of March is spring-loaded with uncertainty on financial markets. Unease about the effect of Trump’s tariffs has been amplified, causing sharp moves at the start of the week.

"London-listed stocks will not be immune to the tariff fall out, with the FTSE 100 set for a difficult start to the week as investors brace for the debilitating effect of widespread tariffs.

"There have been steep falls on indices in Asia as hopes for a more targeted set of fresh duties have evaporated. The President’s comments over the weekend appeared to indicate that blanket new tariffs would be unleashed on Wednesday, a day he’s dubbed ‘Liberation’ day but one which is likely to ensnare many more countries in his punishing trade policies.

"While the implications of his comments are still far from clear, he appears determined to target countries which are competitive in a whole range of sectors, to try spark a revival of home-grown industries.

"But building new manufacturing bases will take years, and much higher costs in the meantime, look set to raise prices and depress economic activity. Concerns about the depth of the tariff plan and the knock-on effects of a potential recession in the world’s largest economy is sparking this fresh round of nervousness, following Friday’s losses on Wall Street."

In equity markets, heavily-weighted miners were under the cosh, with Glencore, Anglo American, Antofagasta and Rio Tinto among the worst performers.

Associated British Foods was the biggest faller on the FTSE 100, however, as it said that Paul Marchant has resigned as Primark chief executive with immediate effect after a woman made a complaint about his behaviour "in a social environment".

Group finance director Eoin Tonge will act as Primark CEO on an interim basis. Marchant's departure follows an investigation, initiated by ABF and carried out by external lawyers. It was not clear whether the complaint was made by a staff member or third party.

Pets at Home tumbled as it said profits were set to fall next year as an uncertain economic backdrop and increased costs take their toll.

In an update for the year to 27 March, the company said group underlying pre-tax profit is expected to be £133m, in line with previous guidance. For FY26, however, underlying pre-tax profit is expected to decline to between £115m and £125m. Broker Shore Capital said consensus expectations were for growth to £142m.

Wood Group tanked after saying it was likely to suspend trading of its shares from the end of April as it needs more time to get its results out. The company said a review identified "material weaknesses and failures" in its "financial culture within the projects business unit and engagement between group finance and projects".

It also said it expects "material" prior year P&L and balance sheet adjustments for FY22, FY23 and HY24.

On the upside, defensive stocks rallied, with utilities such as Severn Trent, United Utilities and National Grid all higher, and tobacco firms Imperial Brands and British American Tobacco also in the black.

Aston Martin surged to the top of the FTSE 250 as the luxury car maker said that chairman Lawrence Stroll's Yew Tree Consortium would plough another £52.5m into the company, lifting its stake to around 33%.

Source: Sharecast

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Alice Winters

Cryptocurrency

Bitcoin fell to a near two-week low on Monday, extending recent declines as fears of more severe trade tariffs under U.S. President Donald Trump eroded demand for risk-driven, speculative assets.

Broader risk appetite was also pressured by increasing fears of a U.S. recession, especially after Goldman Sachs said it saw a greater possibility of a slowdown in 2025.

Bitcoin traders in particular were also spooked by on-chain data showing about 4000 Bitcoins, worth about $332 million, were transferred onto crypto exchange Kraken. Movement of tokens onto an exchange usually heralds a potential sale.

Bitcoin fell 1% to $82,045.2 by 01:36 ET (05:36 GMT), briefly hitting a low of $81,300.

Trump tariffs, recession fears weigh

Bitcoin and broader crypto assets were dented by persistent risk-aversion, especially after a Wall Street Journal report over the weekend showed that Trump was considering higher tariffs against a broader set of countries.

Trump is set to unveil his plans for reciprocal trade tariffs on major U.S. trading partners on April 2, and is also set to impose tariffs on key market sectors.

The WSJ report said Trump’s tariffs could target up to 25 countries and impose tariffs of 20% against individual countries- a move that stands to destabilize global trade and draw retaliation from major economies.

Trump’s tariffs and their potential economic impact have been a key point of uncertainty for markets, having largely offset some positive cues from Trump’s establishment of a Bitcoin reserve.

Speculative assets such as crypto tend to underperform in times of economic uncertainty. Recent losses in Bitcoin saw the crypto wipe out nearly 40% of its value from record highs around the time of Trump’s January inauguration.

Fears of a U.S. recession also further undermined crypto prices, with Goldman Sachs raising its probability of a U.S. recession to 35% from 20% in the next 12 months. The investment bank cited uncertainty over Trump’s tariffs, sticky inflation, and signs of deteriorating consumer and business sentiment in the U.S.

Crypto markets were also reeling from a strong U.S. inflation reading on Friday.

Crypto price today: Altcoins fall with Bitcoin, nurse March losses

Broader crypto prices fell in tandem with Bitcoin, and were also nursing steep losses for March.

World no.2 crypto Ether fell 1.5% to $1,809.93, and was trading down 19.2% in March. The crypto also hit a 16-month low.

XRP fell 3.5% to $2.1022, having largely wiped out any gains made after the Securities and Exchange Commission, under Trump’s watch, dropped its long-running case against issuer Ripple. XRP was trading down 2% for March.

Solana was flat, while Cardano fell 3.4%.

Among meme tokens, Dogecoin fell 2.7% to $0.166263, while $TRUMP fell 1.1% and was close to record lows.

Source: Investing

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Patrick Turner

Commodity

The tariff talk remains on the headlines as the Liberation Day approaches. Risk appetite is nowhere to be found, the US dollar is weak, gold continues to extend gains into uncharted territories and oil bulls remain unreactive to the news that Trump is pissed off with Putin for unveiling plans for the next Ukrainian leadership.

Last week’s US GDP update showed a slightly better reading on Thursday but growth in US GDP fell from above 3% to 2.4% in Q4 and is expected to contract by nearly 3% in Q1 according to the latest update from Atlanta Fed’s GDP Now forecast.

The core PCE, on the other hand, advanced to 2.8% instead of a steady 2.7% read expected by analysts. And the University of Michigan’s inflation expectations keep rising while sentiment keeps dropping. In summary, the US data hints at slowing economy and rising inflationary pressures. That’s the worst possible combination for risk sentiment.

Good news is that the Federal Reserve (Fed) doves are not going away with higher inflation numbers as the rapid fall in growth figures look more concerning than the inflation pick up. Therefore the Fed is expected to cut the rates in June – despite unideal trend in inflationary pressures – with more than 80% probability. The pricing in the bond markets tell the same story. The US 2-year yield – that best captures the Fed rate expectations – dropped below 4% last week and has settled near 3.85% this morning. Alas, even the falling yields and the rising dovish Fed expectations are unable to give a smile to investors. The S&P500 lost nearly 2% yesterday and is set to end the month with more than 6% losses – while seasonally speaking, March could’ve been a good month. Nasdaq 100 was hit by a 2.60% selloff. CoreWeave – the Nvidia-backed cloud computing company specialized in AI – had quite a disappointing debut on Nasdaq. The Dow Jones, small and mid-cap indices all traded down between 1.5 and 2% as well. Stocks in Europe returned to the lowest levels in two weeks, as gold continued to advance towards fresh high, the price of an ounce is trading above the $3110 mark this morning as the selloff continues in Asia with Nikkei down 1.5% on Monday despite data pointing at a 2.5% jump in industrial production in February and the CSI 300 is down 1% at the time of writing despite a set of better than expected PMI numbers.

Oil, on the other hand, is down this morning despite Donald Trump being ‘pissed off with Putin’ for suggesting ways to install new leadership in Ukraine by sidelining President Zelensky – a situation that could lead to ‘secondary tariffs’ on Russian oil. Alas, oil bulls are unable to rebound on the news this morning. Last week’s failure to clear the $70pb resistance is now leading to a toppish sentiment, and the latter is reinforced by gloomy growth expectations and OPEC+ plans to start restoring production from next month.

In the FX, the US dollar reversed an attempt to rebound from the March dip and is down for the third session on mediocre growth expectations for the US economy. The EURUSD found support near its 200-DMA last week. Released last Friday, the French and Spanish early inflation figures for March came in softer than expected, providing more room for the European Central Bank (ECB) to stay accommodative to support growth. The euro’s appreciation and the weakening energy prices are also supportive of European growth.

Speaking of growth, the British GDP update surprised to the upside on Friday giving Cable an additional reason to stay strong against the US dollar, though sterling remains offered against the euro.

In summary, the euro is looking stronger than sterling and the dollar, while the US dollar has become the weakest link among the three.

This week, investors will continue to watch the Eurozone inflation numbers and the US jobs data. The expectations are weak. If the Liberation Day doesn’t lead to a relief rebound in the US dollar, the euro could make an attempt above the 1.10 mark against the dollar, and Cable could break the back of the 1.30 offers.

Source: ACTIONFOREX

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FastBull Featured

Daily News

[Quick Facts]

1. Trump presses advisers for tariff escalation.

2. U.S. unveils new mining agreement for Ukraine with stricter demands.

3. Canadian tourists skip trips to U.S. and other countries may follow.

4. Daly: still sees two rate cuts this year.

5. U.S. February PCE inflation surges beyond expectations.

[News Details]

Trump presses advisers for tariff escalation

Four sources told The Washington Post that U.S. President Donald Trump is urging senior advisers to adopt a more aggressive stance on tariffs. Despite pressure from Wall Street and Capitol Hill allies for a softer approach, Trump continues to push for radical measures to transform the U.S. economy fundamentally. Advisers are deeply discussing the scope of import tariffs, which could impact trillions of US dollars in trade.

U.S. unveils new mining agreement for Ukraine with stricter demands

The U.S. has submitted a new draft mining agreement to Ukraine, with demands significantly exceeding the previously revealed agreement. The latest draft also excludes any security guarantees for Ukraine. According to reports from Reuters and other media outlets, the new version mandates that Ukraine transfer revenue from natural resource development by both state-owned and private enterprises into a joint fund managed by the U.S. International Development Finance Corporation. The fund's board of directors consists of five members, three of whom are appointed by the U.S. The agreement stipulates that the U.S. has the "priority right" to purchase Ukraine's resource extraction rights, and proceeds from the fund must first be used to repay all funds provided by the U.S. since 2022, with Ukraine paying an annual interest rate of 4%. Only after debt repayment can Ukraine utilize the fund's earnings for reconstruction and other matters.

Canadian tourists skip trips to the U.S.; other countries may follow

Trump's trade policies, annexation rhetoric, high-profile visa arrests, and lengthy processing times have strained U.S. relations with traditional allies. Data shows Canadian flights back from the U.S. to Canada in February dropped 13% year-over-year, and road trips fell 23%. Germany, the UK, France, Denmark, and Finland have issued travel warnings for U.S. destinations, potentially worsening the U.S. tourism deficit of $50 billion.

Daly: still sees two rate cuts this year

San Francisco Federal Reserve Bank President Mary Daly said on Friday that local business and community leaders expect tariffs to increase their costs and are currently strategizing about how to mitigate these impacts. They also anticipate some tariffs will be relaxed or exceptions will emerge over time.

The labor market's strength, stable economic growth, and declining inflation are reasons policymakers are waiting before cutting rates, to observe how businesses adapt to tariff costs.

Inflation has fallen from its peak, and last year's Fed rate hikes have made previously delayed projects feasible for implementation.

The Fed has no reason to rush judgment because policy is in a good place, and the economy is in a good place. Thus, the Fed needs time to assess the full impact, including the scope, magnitude, and timing of the final tariff packages, as well as their economic effects.

Her interest rate path projection remains unchanged from last year, and with insufficient information for adjustment, two rate cuts this year remain a "reasonable" expectation.

U.S. February PCE inflation surges beyond expectations

Data from the U.S. Commerce Department showed the core PCE price index rose 2.79% YoY (vs. 2.7% expected), a new high since last December, and 0.4% MoM (also above expectations).

Core service costs, excluding housing and energy, grew 0.4% MoM (vs. 0.2% prior), driven by services' highest contribution to PCE growth in a year.

The personal savings rate unexpectedly rose to 4.6% (vs. 4.3% prior), reflecting a "save more, spend less" behavior pattern. This, combined with a 0.4% MoM rebound in real personal consumption expenditures (vs. -0.5% prior), paints a picture of defensive consumer sentiment amid inflationary pressure.

The data confirms the Fed's long-standing concern about the "last-mile" dilemma: as the deflationary benefits from commodity price declines fade, wage-price spirals in the service sector become harder to contain. President Trump's proposed tariffs could further exacerbate price pressures, already strained by his aggressive trade policies that have eroded business and consumer confidence. Growing signs of household financial strain further fuel fears of stagflation or recession.