Much has happened since the ‘Liberation Day’ of the United States on April 2. Tariffs have been introduced, just to be partially suspended. Negotiations have begun, although apparently without many chances of success. And new rates are already planning. Of course, all this has not left the unharmed markets. The Nasdaq has dropped around 5% since April 2. Meanwhile, the performance of the US Treasury bonds has increased by around 20 basic points during the same period, while BUNS yield with the same expiration has decreased by around 20 basic points, says FX analyst from Commerzbank, Volkmar Baur.
The market seems to be rationally reacting to ‘Liberation Day’
“Most exchange rate movements can be explained relatively easily by global developments. The main winners have been the safe shelters of the Swiss Franco and Japanese yen, as could be expected in times of greater uncertainty. Francs has increased significantly more because Japan depends more on the economy of the United States.”
“The next is the euro, which benefits from the fact that German government bonds offer an alternative to the United States Treasury Bonds when investors seek safe government bonds and, of course, of the significant fall in oil prices that benefit their external balance.
“In general, the market seems to be rationally differentiating. Therefore, it would be a mistake to talk about panic, at least when observed the last 14 days as a whole. However, this should not hide the fact that the changes shown below are significant for a period of only 2 weeks. And this US administration is certainly in more surprises.”
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