Trump Caves, Stocks Soar
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Why did US bond markets experience massive sell‑offs amid the US‑China tariff battle?
Well, a roller coaster day on the markets with big bond sell-offs on the tariff battle with China escalating. It really doesn't matter what those tariffs are now between China and the US, because they're just crazy high on both sides. But after some hefty bond selling, whether by accident or design, Donald Trump has relented and said for everyone, a 90-day delay. Well, the 10% tariff still applies, but nothing over that, except for China. The stock market loved that bond market's not sure, even now. It's Thursday, it's the 10th of April 2025. It's the morning call from Dab. Good morning. Well, a couple of hours ago I was thinking of calling today's episode sell baby sell, because that's what was happening, particularly in the US bond markets.
But early in the trade, ten year treasuries were up twenty one basis points, almost up to four point five two percent. They are now down to four point four two percent, which is still ten basis points up on the day. Thirty year yields got up over five percent, five point oh two percent, which is twenty four basis points higher than the end of the previous day. Much of those highs being reached during the Australian Trading Day yesterday. That sell off wasn't confined to the US. Ten year bond yields uh rose eighteen basis points in the UK, up fifteen yesterday in Australia to four point three nine percent, just three basis points higher than the futures now. But look at the share market. Uh it was buy baby buy.
Uh after Donald Trump's announcement, the major indices were up slightly ahead. Of the announcement, but now at the close, the SP is up nine and a half percent. The biggest one-day move since 2008. The Dow is up seven point nine percent, the Nasdaq up twelve point two percent. Uh yes, so sharp rises after Trump's announcement about delaying the imposition of heftier tariffs. Great news, if you were expecting it. In Europe, uh markets have closed before the news, so the Eurostocks fifty closed down. Down three point two percent, two point nine percent off the FTSE one hundred, three percent off the DAX, three point three percent off the Cat Carrand. Massive differences on both sides of the Atlantic. The US dollar hasn't moved a lot though through today's excitement.
It's a bit higher now, but only by naught point one percent on the day to one hundred and three point one on the DXY, but the Aussie up three point three percent, almost to sixty one point six. Uh the yen is down one percent, the pound up naught point four percent, the euro is Flat, the Swiss franc down at naught point nine per cent and oil shooting back up as well, as though the problems were all over.
How did Donald Trump's 90‑day tariff delay trigger a surge in US equity markets?
So we've got a five point one percent lift in WTI, four point six percent for Brent, which is now at sixty five seventy. Earlier in the session though, when seems thing things seemed a lot gloomier, it was down to fifty eight forty. So from bottom to top, that's a twelve and a half percent move up in oil. Uh and uh uh from low to high the S P today, uh almost ten percent. Gold climbed to three thousand one hundred, almost, which is a four percent rise. So uh there's been a lot of moves in the session. And the news in a nutshell, a ninety day delay on imposing anything above ten percent. So every country is going to be tariffed at ten percent with ninety days to negotiate with Donald Trump. Uh so actually no difference for Australia
Australia on that basis. The exception is China, who will now be tariffed at one hundred and twenty five percent, and China has upped their tariffs to eighty four percent from tomorrow. So I do think that all sounds a little bit immature. Donald Trump has also been saying world leaders are kissing his a uh uh for deals. That's growing up, isn't it? Uh so here's Ken Crompton with me today to talk through another volatile day. This is obviously good news, Ken. Uh it's uh always been planned this way, apparently, we're being told, although they did wait until there were serious concerns about bond sell offs just continuing on. Uh and of course we saw a lot of it yesterday in Australia and Asian markets, didn't we?
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Chapters
8 chapters
1
Why did US bond markets experience massive sell‑offs amid the US‑China tariff battle?
0:01–2:24
2
How did Donald Trump's 90‑day tariff delay trigger a surge in US equity markets?
2:24–4:35
3
What drove the sharp rise in oil prices during the session?
4:35–6:59
4
What are the details of the new 90‑day tariff delay and the universal 10% tariff rate?
6:59–9:04
5
Why did indirect bidders dominate the recent Treasury auction?
9:04–11:21
6
How might tariff uncertainty affect the Federal Reserve’s upcoming policy decisions?
11:21–13:33
7
What concerns do Fed officials have about inflation expectations amid trade tensions?
13:33–15:57
8
What is the outlook for New Zealand’s cash rate after the recent RBN decision?
15:57–18:56